April was a good month, despite my having to pay $480 for business taxes (ouch!).
Saved savings was $141.56. The biggest boost, of course, was from my Citi Double Cash card. That alone was $53.16!
The rest was dribs and drabs of coupon/sale savings on anything I was going to buy anyway (plus when I used fuel points to lower the cost of gas). I’m just continually surprised by how it adds up.
Saved savings, along with the guest house rent, pads my mortgage payment to help pay down the balance faster.
The car fund got its usual $300. I’m up to just over $8,000. I’m hoping that the Honda lasts several more years (it’s only got 73,000 miles on it, and I’m told they tend to make it up over 150,000) so I’ll definitely have a nice down payment or perhaps even the full cost of the car when the time comes. Which, again, hopefully won’t be for many, many years.
This does count toward my savings rate.
The iPhone fund got its $50, but this doesn’t count toward my overall savings rate.
I’m putting $200 a month into the EF to try to boost it up to at least $10,000.
To help speed up the effort, I’m also rounding any SEP-IRA contributions/savings down to the closest $100 and putting the difference in the emergency fund. (So if $550 were left for savings/the SEP, I’d take put $50 toward the EF and divvy up the remaining $500 between the two accounts.)
This month, that meant that an extra $46 went into the EF. At this rate, I should hit my goal in seven or fewer months. Woot!
The $246 does count toward my savings rate.
The Roth IRA… Well, here’s where it gets complicated. I’m currently contributing $500 a month toward my Roth to ensure I max it out. But I got $1,000 in an inheritance this month. I don’t need it to go to the Roth — that’ll already be maxed out — but I can’t put it into the SEP-IRA since the money doesn’t go in my business account.
So my workaround is this: I put the $1,000 into the Roth account, and for two months I’m holding back an extra $500 in my business account and putting it into the SEP. This way, an extra $1,000 still goes into the SEP. Over the course of two months.
TLDR version: $1,000 went into the Roth and $500 extra went into the SEP. Whether the $1,000 counts toward my savings rate… Well, I debate that one at the conclusion of the post.
After accounting for monthly expenses, the $500 for the SEP-IRA, and paying off the credit cards — which were a little higher this month than usual, thanks to the aforementioned business taxes — I had $846 left over to be split between the SEP-IRA and savings. Of that, $46 went to the emergency fund, as already mentioned.
As for the rest… I was torn. I want to beef up savings a bit — it took a hit when I took out that $1,900 — but I want plenty of emphasis on retirement too. So I divvied it up to be $500 and $300, for the SEP and savings, respectively.
This means that savings went up by $300 this month after a couple of months of barely budging. But the SEP was the real star here.
I had $500 from the would-be Roth money, $500 left over from general funds and $152 from various blog/book income streams. Meaning I put a total of $1,152 into my SEP this month. Happy butt dance time!
Both savings and my SEP count toward my savings rate.
Crunching the numbers
A couple of you bristled at my calling extra mortgage payments “savings.” So from now on I’ll just say this: My goal is to put 50% of my post-tax income either into savings/retirement accounts or as additional principal for my mortgage payment.
This month, whether I did that was a little hazy because of the $1,000 inheritance check I received. Technically, it was income, but it was immediately bankable income as opposed to my paycheck which has to cover expenses.
So without the $1,000 in the picture, I saved/put against the mortgage 44.3% of my income this month. (Of that, 32.4% went into savings/retirement accounts, so I’m definitely not doing too shabbily on that front.)
If you want to consider the $1,000 part of my income, then I actually saved/put against the mortgage 60.5% of my income. Which is pretty fantastic but somehow feels like cheating.
So I’m content with my 44.3% savings/paydown rate. It’s not hitting my goal of 50%, but it’s pretty close. In fact, if I hadn’t paid business taxes this month, I’d have exceeded 50%. So clearly I’m on the right track.
Comparison is the thief of joy
All of this good news is exciting, but I need to temper the numbers a little bit by reminding you guys that I make a high income. Not engineer-salary high, but still very respectable. So if you’re not seeing the same results as me, please don’t beat yourself up. There’s every chance that I’m bringing in more than you are, which obviously makes it a lot easier to save.
Even if we make the same amount of money, it’s important to note that:
- I have a low mortgage. It’s under $600 a month. That’s less than most people pay for rent, let alone a house.
- I also have lower health care costs than a lot of people. My premiums are finally under $400 a month, and I have no deductible (thank god for Medicare).
- Finally and perhaps most importantly, there is no one else in my household costing me money. (Anymore). Most notably, unlike many of you, I don’t have kids. Which is an important distinction because kids, while adorable and eminently fulfilling, can — let’s face it — be quite the lil money pits. (Really adorable ones, though.)
So please remember that no two situations are the same. It’s nearly impossible to fairly compare two people’s savings rates, and that’s not the point of this post. The point is to keep you guys (and myself) updated on my progress.
How did your last month go? Do you think I should have counted the $1,000 in my savings rate?