Well, it may only be the middle of the month, but my monthly paycheck is nestled in my bank account, credit cards have been paid and funds have been allocated to the various savings accounts. So it’s time to take a look at how I did this month.
As a reminder, I’m going for a 50% “savings” rate. I use quotation marks because, in addition to regular savings and retirement savings, I’m including additional mortgage principal that I pay down, which some folks don’t think should be included. To satisfy everyone out there, at the end of the post I’ll calculate my savings rate as pre-tax, post-tax and post-tax including additional mortgage principal.
Here’s where my money went this month:
Each month I put $300 into a fund toward a new car. While I hope my Civic will be around for many years to come, I’m preparing for a new car when the time (eventually) comes. If I don’t have enough to pay for the thing outright, at least I’ll be used to having a car payment.
This amount counts toward my savings rate.
I put $150 aside each month for car insurance toward the inevitable bill. This doesn’t count toward my savings rate
I put $100 a month into a vacation fund. Right now, I’m saving for a trip to London. This does count toward my savings rate.
Each month I set aside $160 for amounts saved from cutting cable,* switching to Ooma from Vonage, etc. I add in any money I saved from the previous month with coupons, sales and store rewards on things I was going to buy anyway. That was $66.06 this month, for a total of $226.06.
The money goes toward paying additional principal on my mortgage, so this counts in only one of the ways I calculate my savings rate.
*If you haven’t made the switch yet, now’s a great time. Swagbucks is offering the equivalent of $35 if you sign up for Hulu.
I put aside $500 a month toward my Roth IRA. Thanks to a large tax return, this is going to my SEP-IRA instead. This does count toward my savings rate.
I put $200 into my emergency fund each month. I then round anything left for the SEP-IRA/savings down to the nearest $100 and put the difference into the EF. This means that I put $228.26 into the EF this month.
I had extra overtime this month (I always work one weekend of overtime), so this was a fat check. As a result, even after paying the $1,005 in credit card bills (more than 40% of that was my FinCon flight), I had an astonishing $1,900 left over for the SEP/savings.
I’m trying to make up for lost time with retirement, so I only put $400 of that into savings. I shunted $1,500 into the SEP, where it was joined by the money earmarked for the Roth IRA and some money I made from the blog.
All in all, $2,087.68 went into the SEP, which was shocking to me. I don’t expect to replicate that any time soon (especially since I’m missing some workdays for my DC trip/FinCon) but it’s awfully swell that it happened this month.
In short, my savings rates were:
- 35.2% of my pre-tax income
- 44.5% of my post-tax income
- 54.8% of my post-tax income (including additional mortgage principal paid)
So I hit my 50% goal and then some.
Again, this is an abnormal month, and the next two months are going to be a little lean because I’m missing about $500 worth of work in August and the same again in September because of my DC trip.
And trust me, I know how lucky I am to have that luxury — of forgoing any income (let alone that much) for a vacation.
Speaking of luck and privilege…
Your results may vary
Honestly, part of me was squeamish about publishing this post. The savings numbers are so large that I feel a smidge uncomfortable disclosing them. But I do so to be transparent — and in the hopes that you guys will be happy for me given where I was even just a year ago (when we were spending so much more and saving so much less).
I know that a lot of people can’t replicate these kinds of numbers in their own finances and that’s understandable.
I’m very fortunate to have a high-paying job. I also don’t have the expenses that come with children, a spouse/partner or even many pet expenses. (Josie has been hale and hearty, long may that continue!) So please don’t get discouraged if your savings rates are lower than mine.
I’ve been on disability, envious of others’ ability to save at all. Then moderate income, jealous of high earners. So I know how tempting/easy it is to compare situations. But no two people’s finances look the same. So their numbers probably won’t either.
How did your financial month go?