Well, the money has all been sent to the various accounts, quarterly tax checks written out (ugh) and all other monthly finances otherwise settled.
Let’s see how I did, shall we?
As a reminder, I calculate three different saving rates (pre-tax, post-tax and post-tax plus additional mortgage principal), so you’ll see those references to multiple rates in the post.
Normally, this is one of the categories I list last because it’s usually based on how much is left over for savings/SEP after all of the other accounts have been dealt with.
But this month I was only $160.35 away from my yearly maximum contribution. (Lest you look up the yearly maximum, note that it’s 1/4 of the employee’s pay up to $56,000. So no, I did not put $56,000 into this account in nine months. Or anywhere close to that amount.)
Given that i was so close, I decided the SEP would be the first account I settled for the month.
I set up the transfer and then just sat around feeling very happy.
Obviously, retirement is a long-term goal, this counts toward all my saving rates.
Thanks to substantial tax refunds plus monthly $500 contributions, I maxed this account out two months ago. So $0 went here.
Every month, I put a $300 “car payment” into this savings account. I only have about 79,000 miles on it, so ideally I’ll have the full replacement cost by the time I need a new vehicle. If not, then I’ll already be used to having a car payment. So it’s pretty much win-win.
This is a long-term goal (more than one year away), so this counts toward all of my saving rates.
This of course isn’t savings, but it is where a good chunk of my income goes, so I figure it’s worth noting.
For FICA, state and federal taxes combined, I have to put aside $1,853 a month. Not my favorite, but I do like paved roads, funded schools and Medicare/Social Security. So I try to keep the whining/self-pity to a minimum.
Once again, not savings, but a decent chunk of money this month went to the cards. Specifically $670. Almost $400 of that is my health insurance, so it’s not as though I’m going crazy with extraneous spending. Still, I’d love for it to be lower next month.
Animals get sick, and vet bills can get pricey quickly. So I put $100 a month into a fund for future expenses for Josie. After this month’s contribution, I’m only $100 away from my $1,000 goal. I’ll probably stop contributing after that.
Since this is (hopefully) an expense at least a year in the future, I count it toward all of my saving rates.
Relative’s surgery fund
A family member recently came out as a transgirl. (Normally, I’d say transwoman but she’s only 14. So for now I’m going with “transgirl” and will switch when she’s 18.) This wasn’t a shock to anyone given that she’d been dressing as a girl for as long as I can remember. But we were all happy to hear that she’s finally officially figured out who she is. Or finally felt comfortable proclaiming it. Either way, we’re all happy.
I don’t really have a relationship with this relative, but her mom and I go way back. The mom is a teacher, and while Alaska pays its teachers some of the highest amounts in the country, it’s still not amazing. Especially since she has two kids to feed and house.
Meanwhile, top surgery isn’t going to be cheap when the time comes; and, of course, it isn’t covered by insurance.
I don’t know how much she’ll be able to contribute, and while her daughter is pretty frugal and thus will likely save most of her check, the girl also has to go to college.
All of this is to say that I’m now socking away $50 in a new account. Assuming I’m still working and doing okay financially in four-ish years — or whenever she’s ready for surgery — I’ll send her the $2,400ish to help out.
This is at least a four-year goal, so it counts toward my saving rates for now.
This is a fund where I put any money I save from sales, store rewards, coupons, etc. for things I was going to buy anyway. I also put any credit card rewards in this account.
I put a standard $160 aside each month for ongoing savings from things like cutting the cord. Then any other savings from the prior month get added. This month I once again didn’t have to pay for electric thanks to an surplus from my averaged-out billing, so I was able to add $132.52. Meaning that I had $170.80 to add to the $160.
The combined amount will added as principal to my mortgage and thus count toward the third saving rate, which includes additional mortgage principal.
Each month, I put at least $200 into the emergency fund.
I say “at least” because I round down to the nearest $100 however much is left after all of the other funds (except for savings and, normally, the SEP-IRA) have been allotted. So for example, $1,150 would become $1,100 and $50 would be added to the EF.
This month, it wasn’t much extra: $15.72 for a total of $215.72. But every little bit helps, right? Besides, I’m already at more than nine months of my emergency budget, so there isn’t a desperate need to sock away money.
This is a long-term goal and thus the money counts toward all my saving rates.
Guest house rent
I get $500 a month from renting out my guest house to a lovely lady. She’s nice and quiet, is apologetic when things break (even though it’s never been her fault) and is otherwise a great tenant.
I add this amount to my mortgage each month, so it counts toward that third rate I mentioned.
Now that the SEP is fully funded, I’m ready to open my very first index fund. I feel like such an adult! And it only took til age 42.
After all of the previous accounts were funded, I still had a very nice $1582.02 to divvy up between savings and the index fund.
My savings account is pretty healthy, so I’m only putting $200 in there. The rest will be in an Ally account for the index fund until I decide whether I want to just put the money in now or wait a couple of months to see whether the market will indeed crash.
So how did I do? Pretty well — but normally it would’ve been better.
Thanks to a few factors (including taking my birthday off and there being only 21 workdays in the month instead of 22), my check was around $500 lighter than usual. Which sucks.
But I really enjoyed my birthday off, and my results are still very good. So I’ll try not to pout overly about the “missing” money.
As a reminder, I base my saving rates on my overall income: the check from my employer, the guest house rent and any income I get from the blog.
In addition, it’s worth noting that my goal is a 50% saving rate, including the additional mortgage principal.
Here’s how I did:
Post-tax plus mortgage: 50.5%
So despite the lower income, I still hit my overall goal (if barely). Which is pretty spiffy. And I’m still riding the high from maxing out my SEP. So all in all, a good month of results.
I know some of you are sick of reading this caveat. But there may always be someone new — or someone who just plumb forgets — so I’m going to say this every month: Please don’t feel bad if your results don’t look quite like mine.
It’s important to note that I have several advantages. First, my pay is significantly higher than the median wage in America. Second, my mortgage is very low ($600). And of course, for better or worse, I don’t have kids or a spouse, and those suckers can be expensive!
In other words, no two people’s situations are going to be exactly the same, thus it’s dangerous to compare your results to someone else’s. So I hope — especially in the current economic climate — that these updates don’t make anyone negatively about their own saving progress.
I think we’re all doing the best we can.
How is everyone doing out there financially? I know some of you are living on bare bones unemployment, which can’t be easy.