These posts are to keep you guys updated on my progress and to keep me better aware of my savings rate. The goal is to hit a post-tax 50% saving rate (including extra principal paid toward the mortgage).
So here’s where my money went this month.
I put $300 a month toward the down payment for a new car. I hope that the Civic lasts so long that I’ll have the full cost of a new car saved up, but only time will tell.
This amount counts toward my saving rate.
I put $150 a month into my car insurance fund toward the yearly premium. This is an increased amount to compensate for the accident I had back in December and the fact that I’m divorced (which raises my rate, apparently). I really need to decide whether to drop comprehensive coverage. It would probably save me a noteworthy amount of money, but I’m just not sure I’m ready to take that risk yet.
This is a short-term savings goal, so it doesn’t count toward my saving rate.
I’m putting $100 a month into the vacation fund to save for my trip to London. This is more than a year away, so I’m counting this as a long-term savings goal, which means it counts toward my saving rate.
I fully funded the Roth with my tax refund, so the $500 I set aside for this each month will now go to my SEP-IRA.
I put away $160 a month for all of the expenses I have saved on by doing things like cutting the cord, lowering my Internet speed etc. I saved an additional $77.88 this past month in day-to-day saved savings (including about $30 from my Citi Double Cash card payout).
These amounts are tacked onto my mortgage payment, so they count toward my “saving” rate.
I set aside $40 a day for day-to-day expenses, which includes every expense I incur from medications to drugstore items to groceries to going/eating out. While I do allow for $280/week, most of my financial weeks last longer than seven days. I’m still debating whether to switch to a monthly budget.
The $1,240 doesn’t count toward my saving rate since it (or most of it, anyway) gets spent.
I pay a painful $1,853 between both halves of FICA and regular income tax. Obviously, this doesn’t count toward my saving rate, but like the weekly funds, it’s worth noting as it’s a major expense.
I keep out extra to cover some recurring, auto-debited expenses: life insurance, electric bill (which is $179 all on its own), gas bill and maintenance plan for the HVAC. That comes to just over $313. This also isn’t saved, so it doesn’t count toward my saving rate. But I mention it here because these are yet more noteworthy expenses that explain where, exactly, my money is going.
They were a heinous $1,700 this month. In addition to my $375 health insurance, I had a bunch of mid-size ($100-200ish) charges this month for things like repair bills, getting the car windows’ tint fixed, etc. They added up. Clearly.
Unfortunately, this left just $574 to divvy up among the SEP, savings and emergency fund accounts.
I try to remind myself that I used to be thrilled to have that much money leftover at the end of the month — and that plenty of people would be excited to have that much to play around with at the end of the month. Still, my higher income means it’s not great proportionally speaking. Besides, splitting the money among three accounts (savings, SEP-IRA and emergency fund) does feel like it lessens the impact.
I took $300 out of that $574 and put it into the SEP. This was added to the $500 that would have otherwise gone to the now-maxed-out Roth. I also made some money off the blog this month, so that goes into the SEP as well. All in all, I was able to put $1016.56 into the SEP. Woot!
This is very exciting to me because a) I’m a money nerd and b) I was hoping I’d be able to put $3,000 in the SEP this year, and I’m up to more than double that! This is an amazing (and heartening) development.
The $1016.56 does count toward my saving rate.
After contributing to the SEP, I had $274 left for the savings account. But I round down anything I put into savings to the nearest $100 and put the difference into the emergency fund. As a result, only $200 went into the savings account.
This does count toward my savings rate. It’s kind of in the name, after all.
I put a standard $200 in each month. Then I add anything rounded down from the savings amount. In other words, this month I put in $274.
This also counts toward my savings rate.
So how did I do?
Honestly, I wasn’t expecting great results. Not with credit cards that high (compared to last month’s less-than-$1,000 balance).
Surprisingly, though, I actually didn’t do too badly.
Of course, different people have different ideas of what constitutes a saving rate, so I like to break mine down a few ways:
Pre-tax: I saved 25% of my entire paycheck into various savings and retirement accounts.
Post-tax: I saved 33.2% into the savings and retirement accounts.
Post-tax with mortgage (the rate I go by): 45.4% went into savings/retirement accounts or as additional payment against the principal of my mortgage.
Those numbers are pretty healthy. I’m pleased that almost 1/3 of my post-tax money went into savings/retirement accounts alone. That’s pretty exciting. (I did say I’m a money nerd.)
Meanwhile, I was pleasantly surprised to find my overall “saving” rate relatively close to the 50% I’m aiming for. It’s nice to know that even months with ugly credit card bills can end up looking pretty good.
How did your month go?