This was a banner month thanks to an unprecedently low credit card balance — just over $600, which includes $375 for health insurance and $79 for my business Internet connection.
As a reminder, my goal is to put at least 50% of my post-tax dollars toward retirement, savings and the mortgage. For brevity’s sake, I’m going to refer to this as a “savings rate” but I am differentiating between savings and the mortgage at the end.
Here’s where my money went this month:
I put $50 into the iPhone fund. This does not count toward my overall saving rate.
Car insurance fund
I put $150 a month toward my premium. Since this is also a short-term goal, it also does not count toward my savings rate.
I save approximately $140 a month by avoiding cable, using Ooma and a few other frugal hacks. Though now that I think about it, it should go up to $160 because I recently cut down my Internet bill. But for this month it was $140.
I also saved $103.62 over the course of the month through coupons, free movie/popcorn vouchers, and sales on things I would buy anyway.
Both amounts go toward the mortgage, so they count toward my “savings” rate.
As already mentioned, I put both amounts of saved savings toward the mortgage. Another $225 for a half-month’s rent (the tenants moved out on the 15th) meant that an extra $468.62 went toward the mortgage this month.
The rent also counts toward my “savings” rate.
I put $300 a month into a new car fund for the eventual replacement of the Civic (long may it live!). Since this is a long-term goal, I count it toward my savings rate.
I’m trying to build up my emergency fund to $10,000. I put an automatic $200 into the account every month. Then I round down whatever would go to savings to the nearest hundred (ie $150 would become $100) and put the difference into the EF. In this case, that meant an additional $36.04. So the emergency fund went up by $236.04, which probably obviously counts toward my savings rate.
I normally put $500 into the Roth each month to ensure that I max it out by the end of the year. But last month I put a $1,000 inheritance in, so this month and last month the $500 is being diverted to the SEP-IRA instead.
The blog itself had a banner month, bringing in $310.36 (sadly, this is also unprecedented and likely won’t be repeated) thanks to an AdSense payout, some sales of Frugality for Depressives, and a bunch of affiliate income payouts that coincided with one another. All blog income goes to the SEP-IRA directly, since it’s associated with my S-corp.
Even after accounting for all of the aforementioned accounts, various utilities and some monthly recurring charges like life insurance, I was left with $1,500 (above and beyond the blog income) to split between the SEP and savings.
Like I said, unprecedented.
Normally, I’d keep the amount going to savings to $200 or $300. But the savings account took a hit with some recent upgrades I did to the house. And it’s set to take another hit for June quarterly taxes since I apparently undersaved one month.
So I decided $500 should go to the savings account. And a nice round $1,000 should go to the SEP-IRA.
Between the blog income, the Roth money and the $1,000, I was able to put a startling $1,810.36 into the SEP this month.
Did I mention this is all unprecedented? Alas, it probably also won’t be repeated (certainly not this coming month, which already required more than $800 of charges on the card), but I can enjoy it now.
So where did all this leave me?
There are a whopping four ways to break this down. Since people disagree on what to call savings, and I’m unsure whether to go by pre- or post-tax, let’s just run through them all, shall we?
First, the pre-tax income rate for overall “savings.” I put 41.2% of my pre-tax income into savings/retirement/additional principal on the mortgage.
Post-tax overall “savings” was an incredible 53.6%! So I exceeded my goal this month. Woot!
As for actual savings — that is, money that went into one of my savings account or into retirement — pre-tax was 35.4% and post-tax was 46%. Not bad at all!
I make good money. Not engineer money. But good money nonetheless. You may make less than I do and/or have extenuating circumstances that keep you from saving this much. That’s totally understandable.
I’m single and childless, which means all of my money is my own (minus taxes). A lot of people out there can’t say that. So please don’t expect your results to emulate mine and please please please don’t judge yourself by my numbers.
These posts are to help me keep tabs on my own progress toward getting to where I need to be financially. (Which isn’t financial independence — at least, not the pre-retirement-age kind — but just general financial well-being.) The posts also to help keep me honest because, if my savings rate dips one month, it’ll motivate me to try harder the following month.
How did your last month go?