Clients

Let's Talk

How to Conduct a Year End Review of Experiences and Spending

Forget Starting on Next Year Goals and First Reflect on This Last Year Instead

I’m often asked how to approach financial goals, especially at the start of a new year. Lisa and I used to love making ambitious New Year’s resolutions around saving more and spending less. But the truth is, the goals we set were often pulled out of thin air and they didn’t stick once the new year started rolling.
 
So now, we do something different: We conduct a Year in Review instead. First, we look back at our experiences over the past year to figure out what we most enjoyed (and didn’t enjoy). Next, we review our spending to uncover which purchases brought us the most joy and which ones we ended up regretting months later. 
 
Only then can we figure out where we should be putting our money for the next year. 
 
So before you set any broad resolutions for the upcoming year, consider doing a Year in Review instead. Here is the step by step process that works for us: 

First, Conduct an Experience Review 

The best way we’ve found to live and spend with intention is to look back at our experiences and emotions. Then, we can move forward with prioritizing the people and experiences that bring us the most satisfaction.  
 
So how do you do this? Go through your calendar month by month and ask yourself the following:
 
  • What were the activities and people that triggered my most positive emotions for that month?
  • How can I experience these more often in the upcoming year?
  • Can I use my money to support this? (For example: more weekend getaways, hiring a personal trainer)
  • What were the activities and people that triggered my most negative emotions for that month?
  • How can I reduce or eliminate these experiences?
  • Can I use my money to support this? (For example: hiring a housecleaner, take a pay cut in order to improve work/life)

Second, Conduct a Spending Review

Next, review your spending from this year. We believe that money equals energy. Every dollar you spend is a tradeoff for the energy you spent to earn it. So if you want to live intentionally, a key component is getting a handle on your spending. 
 
To figure out where your money is going, a budgeting app like Mint or YNAB (link each) can help with pulling and categorizing purchases. Once you’ve got some data, ask yourself the following:
 
  • Where did I spend my money this year (or the last 90 days)?
  • What are the top categories of my spending? Does that match what I value most?
  • What are the top 3 specific purchases that brought the most joy? 
  • What were the top 3 specific purchases that brought the least joy?
  • What are the expenses that aren’t bringing much value to my life that I can reduce or eliminate? 

Put It All Together

When you look ahead to your finances in the year ahead, you want to eliminate the expenses that aren’t bringing much lasting value to your life. But it’s not enough to just cut expenses. 
 
When it comes to spending plans, our motto is: It’s not about minimizing spend, it’s about maximizing joy. 
 
How can you use your money to support your ideal life? Allow yourself to spend money with purpose in those areas that bring a high level of positive emotion and/or most help you avoid negative emotions. It’s a lot easier to stick to a spending plan when you’re excited about where ’re excited about where you’re funneling your money towards.