Well, initially I wasn’t going to do one of these.
I thought it might be a little insensitive to all of the people who are struggling financially right now. But a few readers chimed in that they thought it would be fine. That included a Twitter follower who said that, while she herself is struggling with bills, she thinks I should still do the post.
If it wouldn’t upset her, hopefully it won’t upset anyone else. So let’s see where the money went:
Each month, I have a $300 “car payment” that I put into a savings account in anticipation of needing a new car. My 2012 Civic has just over 78,000 miles, so hopefully it’s got plenty of life left. But just in case, probably best to save up for the next down payment — and also to make sure I’m used to budgeting for a car payment.
I put $100 into a vacation fund each month. Clearly, this is a very long-term goal, as we have no idea when travel will be okay again. So this definitely counts toward my saving rates.
I’m going to build up a $1,000 pet fund for any vet bills Josie will need. I was putting $50 in, but I’m boosting that to $100 to hasten things a bit. Hopefully, she won’t get sick in the foreseeable future, so the money counts as long-term savings and therefore is included in my saving rates.
I put $500 into my Roth every month to max out the yearly contribution. I’ll actually max it out a few months early this year, since I put my tax refunds into the account. Once the Roth is maxed out, I’ll shunt the $500 toward my SEP-IRA so that it’s still going into retirement.
In addition, I put aside any money saved from coupons or sales on items I would’ve bought anyway. So this month, the total was $183.53. This goes toward my mortgage, so it counts toward the most inclusive saving rate.
Guest house rent
I charge $500 a month rent for my guest house out back. I put the full amount into my monthly mortgage payment, so this amount also counts toward the most inclusive saving rate.
I always put a minimum of $200 into the EF every month. But it’s a bit more complicated than that.
Over time, I’m trying to grow the fund to six months’ worth of expenses, and $200 a month is kind of slow going. So to boost my efforts, I take the amount left over after all of the above contributions (plus taxes and car insurance) have been accounted for — which just leaves the SEP-IRA and savings account — and round it down to the nearest $100. So if I had $1,250 left for savings/SEP, I’d put $50 into the EF fund and divvy up the remaining $1,200 between the two accounts.
This month, that was a whopping $90.07, so $290.07 went into the emergency fund. Hooray!
I had quite a bit of money left over this month, but I still only put $300 into savings. As much as I want a large savings cushion, the account is already pretty healthy, and I’m trying to make sure I max out my SEP this year. So I chose to put a smaller amount in the savings account.
That said, an additional $260 went into the account this past month too.
Mom sent this to me when she cashed in a CD. She’s slowly sending me money because, since we’ve agreed she’ll live to be 150, she doesn’t feel I should have to wait for my “inheritance.”
I’m glad she’s doing small chunks because I’d prefer she use her money on, ya know, herself. Still, it makes her happy to help me out, and obviously I appreciate it. So I guess it all works out.
So in all, the savings account was boosted by $560. Which is nice since last month I had to take about that much out of savings.
Any income from my blog goes into the SEP-IRA. Thanks to AdSense, Swagbucks referrals and some book sales, plus obviously the money left over after all of the contributions to the aforementioned savings accounts, I was able to put $1,280.22 into my SEP-IRA this month.
I can contribute up to 25% of the salary my S-corp pays me, and this month’s chunk (added to the last three month’s contributions and my yearly bonus) put me at 45% of the way to maxing out the account. Woot!
Now what you actually care about: the saving rates.
As a reminder, I calculate three different saving rates, since no one can seem to agree on whether you should use pre-tax or post-tax income and whether additional mortgage principal should count.
Post-tax plus mortgage: 49.1%
My goal is to hit 50% each month with that last rate. That’s pretty lofty, so I suppose it’s more of an aspirational goal than an actual one. But I came pretty darn close this month, which is great!
The usual caveat
If your saving rate is lower than mine, please remember that our circumstances may be quite different — even if you are still employed.
I have a high-paying job, well above the average income for an American. Also, I have no car payment or expensive health condition. And I have no kids (and no spouse anymore) costing me money.
As such, my results may vary quite a bit from yours. So please try not to compare rates, since everyone’s situation is a little bit different.
I hesitate to even ask, but how did everyone’s month go? Or just tell me how you’re holding up during all of this craziness and isolation.