This one is coming later than usual because, well, so did my check. I usually receive my check between the 10th and 12th of the month. So when it still hadn’t come on the 14th, I emailed my boss.
Yeah, he forgot to process and mail contractor checks. Sigh.
To be fair, this is only the second time in 10 years, but it’s also the second time in the last year. Which is a little worrying. Thankfully, I had some padding in my account from the rent money. So I was able to use some of that to cover daily expenses and replace the funds once I (finally) got my check on the 18th.
I don’t understand how freelancers and other contract workers deal with this kind of uncertainty!
Anyway, it’s all fixed now (after some nice, complicated math thanks to “borrowing” rent money). So let’s see how I did.
I currently have a 2012 Honda Civic with about 77,000 miles on it, I believe. I hope to have it for another 50,000 miles minimum — hopefully more like 100,000 miles. But in the meantime, I’m socking away $300 a month toward an eventual replacement.
Since this is a long-term savings goal, it counts toward my saving rate.
Car insurance fund
I put $150 into this fund in anticipation of my annual premium. Since this is a short-term goal (less than one year), I don’t count this in my saving rate.
I put $100 into this account every month. I don’t have any trips planned until 2021, when I’m going to England, so for now I consider this part of my saving rate. If I start planning a trip for this year, I’ll reevaluate.
I’m putting $50 a month into a fund against future vet bills for Josie. Maybe I should increase this to $100? I’ll think about it.
Anyway, hopefully having to spend this money is at least a year off, so it counts toward my saving rate.
I put $500 a month into a Roth IRA to be sure I max it out each year. This is obviously a long-term savings goal, so it count towards my saving rate.
I estimate that I save about $160 a month from having trimmed various expenses: lowering my Internet bill with a deal, cutting the cord, etc.
I also put away any money I save on products with coupons, sales, store rewards, etc. That plus my Citi Double Cash rewards this month came to $76.41.
I put this money against the mortgage, so it only counts toward the saving rate that includes my additional mortgage principal payment.
I get $500 for the rental of my guest house. I put the whole amount into my mortgage payment to help pay down the principal faster.
I put a minimum of $200 a month into my emergency fund. But then I take the amount left over after all the above accounts (and basic bills and credit cards) have been dealt with, and I round that down to the nearest $100. The difference goes into my EF.
This month, that meant that a total of $270.03 went into the EF. This also counts toward my saving rate.
All of this means there was an astonishing $2,400 to be divvied up between the savings and SEP-IRA.
I’m working hard to max out the SEP again this year. Between that and the fact that next month I won’t be able to make any SEP contributions (more on that later in the post), I decided to put just $400 into savings and $2,000 toward the SEP-IRA.
Happily, when combined with last month’s contribution and the yearly bonus I put in, this payment means that I’m now more than 1/3 of the way to maxing out my SEP-IRA this year.
Different people have different ways of calculating saving rates. I couldn’t decide among them, so I choose to do three different ones: savings based on pre-tax income, savings based on post-tax income, and savings including extra mortgage principal (based on post-tax income).
Pre-tax income: 50%
Post-tax income: 61.7%
Post-tax plus mortgage: 63.4%
Yowza! A pretty darn successful month — though that’s partly because my credit card bill last month was artificially low.
That’s because a $280 weekly payment meant for the previous statement got applied to this last one instead. As a result, the statement balance for card that my $393 insurance premium goes on — which also had a $124 guest house repair charge on it — was only $288.44. There are other cards too, but those were also low.
In other words, these aren’t my normal results.
Still, I’m trying to enjoy this month’s success while I can. Because next month will be an entirely different story.
March will be bad
Frankly, I’m already dreading the next update. Because next month’s bill is going to be a nightmare.
Two months in a row now, Medicare has sent out its monthly bill pretty late. And it’s slow to process payments even once they’re received. Which means twice in a row it hadn’t processed my previous payment when the new bill was being sent out.
This resulted in two months of double bills (at $796 a pop), which I just pay in full to avoid any potential issues like coverage disruption. On the bright side, this means I won’t have to pay a premium for the next two months. But in less happy news, both of the $796 charges landed in the current month’s billing cycle.
Plus I had to pay for my business taxes ($480) in this billing cycle. Adding in my Internet connection and a couple other miscellaneous charges, my credit card bill next month will be a minimum of $2,100. Sigh.
And of course this comes in a month when my paycheck is smaller than usual. (February as 20 workdays instead of the normal 22.) Double sigh.
All of this means that I’ll actually have to take a little money out of savings to cover next month’s bills. So expect a much more paltry savings rate next month (and no SEP-IRA contributions).
But for now, let’s focus on the positive. I had a banner month, and April’s and May’s credit card balances will be $393 less than usual. So those might be pretty good months too!
The usual caveat
I know some folks think I’m getting repetitive, but I just want to remind you guys that I have several advantages that let me save this much money.
First of all, I have a high salary. Second, I have no children. While they’re adorable and (I feel certain) completely worth it, those lil suckers are kinda money pits, right?
And without a partner, I don’t even have another adult’s expenses to contend with. Anyone who read the blog when I was married knows that a lot of my available funds were being sucked up by my ex-husband’s needs (and a number of wants too).
Finally, my mortgage is quite low. Just under $600 to be precise. Even with the plethora of repairs that seem to come my way, my housing costs are significantly lower than many, many people’s.
All of this is to say that it’s important to remember that it can be a bad idea to compare financial situations. There are people with much lower incomes, which obviously makes it harder to get to these type of results. There are people with similar incomes but more expenses due to health issues, family size, housing costs or a variety of other potential factors.
And hey, there are people with more expenses who still manage better savings rates (sometimes on less money) because, frankly, I’m not being as frugal as I could be.
So if your results don’t look quite like mine, please don’t judge yourself (or, hopefully, me). Remember that what matters is that we’re all doing the best we can given our circumstances — at least, based on our priorities, values and abilities.
In the end, what matters is that we’re making the best-informed, carefully considered choices when working toward a good savings or debt-paydown rate.
How did your last month go?