Well, the account transfers have taken place and everything is all settled. Let’s see where the money went, eh?
(As a reminder, I calculate my saving rate three ways — percentage based on pre-tax income, based on post-tax income and based on post-tax income while including additional mortgage principal as savings — so you’ll see reference to rates in the plural.)
My 2012 Honda Civic has fewer than 79,000 miles on it, so it should last a good long time. Still, every month I put $300 into a car fund so that I’ll have a very large down payment (or hopefully the full purchase price) when the time comes.
This is (hopefully) a long-term (more than one year in the future) goal, so it counts toward my saving rates.
Each month I put $150 a month against my semi-yearly premium. I really need to sit down and do the math about getting rid of comprehensive coverage to lower my rate, but I just don’t have the bandwidth right now.
Since this is a short-term goal, it doesn’t count toward my saving rates.
Roth & SEP IRAs
Thanks to tax refunds, I maxed out my Roth IRA a couple of months ago, and I was able to max out my SEP (1/4 of my employee salary) as of last month. So no money went into these funds.
Obviously, this isn’t savings — except in the sense that I put the money aside and pay quarterly. But since a large chunk of my paycheck ($1,853) goes toward FICA/state/federal taxes, I figure it’s worth noting.
Again, not a savings item. But a little over $815 went toward these, so they’re worth mentioning. Almost half of that ($396.60) was for my health insurance premium. So I didn’t actually have that many things outside of my normal spending.
Every month I put $100 into a pet fund for when Josie next has vet bills. I was going to stop at $1,000, which would mean this would be the last month I contribute. But vet bills are often not cheap, so I’m wondering whether I should shoot for $1,500 in this account.
Regardless, this is (hopefully) a long-term savings goal, so it counts toward my saving rates.
Relative’s surgery fund
As I mentioned last month, a relative recently came out as trans. She’s only 14, so she won’t have top surgery for a while yet. And she’s frugal, so I have no doubt she’ll save any money she earns in an account. But she also has to pay for college. So I’d like to help out.
As such, I decided to save $50 a month and donate it when she’s ready for the surgery. I should have a minimum of $2,400 when the time comes.
The caveat is that if I lose my job or otherwise fall on hard financial times, I may not be able to see this through, so my mom and hers are keeping this under wraps until the time comes.
Since this isn’t a savings goal for myself, I’m not counting it in my saving rates.
Over the years I have cut costs in many areas and those save me about $160 a month. Each month I put that amount into a Saved Savings account. Additionally, I add in any money saved with coupons, sales or store rewards. Any rewards card bonuses get put in here as well.
This month, the balance for coupons/sales/etc. was once again high ($261.27) since I still have some credit with the electric company and thus am not being billed my usual $132.52.
I add these amounts to my mortgage payment as additional principal, so the money counts toward my third saving rate, which includes additional principal in the amount saved for the month.
Guest house rent
I have a small guest house out back. Very small. It’s about 412 square feet. So I only charge $500 including utilities. I knew it was a decent deal, but I recently learned that now even a room in a shared house is around $500 (or more) plus utilities.
In fact, two days ago I saw an ad for someone looking for a third roommate in a house. The rent was $700 plus utilities. It was in a slightly more central location than my place, but still… No wonder my tenant is so happy!
I guess I could raise the rent when her lease expires, but I don’t strictly need the money. And she’s a great tenant, even trying to help keep weeds in the back yard under control. So I’m not all that concerned about market rates.
I put the $500 into my mortgage payment, so this counts toward my third saving rate. (I also make sure to include this — and any money the blog makes — in my monthly income total.)
Every month I put at least $200 into my emergency fund. In addition, I take anything left over after all the above expenses/savings have been accounted for and round it down to the nearest hundred, putting the difference into the emergency fund. So $1,550 would become $1,500 and an additional $50 would go into my EF.
This month the difference was pretty low at $17.48. But hey, every bit helps, right? I already have almost 10 months’ worth of my emergency budget saved. I’m going for at least one year’s worth.
Savings & index fund
This left a startling $2,100 to divvy up between my savings account and the index fund I plan to start at Vanguard.
My savings account is pretty healthy, plus it already got a$450ish boost from money leftover at the end of the month. (I don’t count that amount here, since it didn’t come from this paycheck.) So I didn’t feel the need to put too much of the $2,100 into savings and only deposited $300.
The other $1,800 went into the index fund bank account, and I’m going to shoot for getting that opened with Vanguard in the next week or so.
All in all
So how’d I do? As a reminder, I aim for a 50% rate for the third rate.
Pre-tax rate: 32.6%
Post-tax rate: 41.9%
Post-tax (including additional mortgage principal) rate: 53.6%
All in all, a very healthy set of rates, I think.
It’s true that the rate could be higher. I indulge in things like massages and takeout (too much of the latter, lately, actually). But when finances allow, I believe some splurging is good for the soul. I like to balance saving for the future with ensuring some enjoyment in the present — even when there isn’t a pandemic I desperately want to forget about even briefly. So I’m pretty happy with my progress.
As always, a reminder
Some of you are probably sick of me saying this, but I think it’s always important to remind people that everyone’s situation is a little different. If your progress doesn’t look like mine, there are likely some good reasons for it.
First, I have a high income. It’s obviously easier to save more when you earn more.
Second, I have no kids and no longer have an expensive spouse. That saves me a ton.
Third, my mortgage is very low at just under $600. Most people can’t even get a studio apartment for that. Apparently, some people in Phoenix might not even be able to get a room in a house!
Fourth, I have no car or student loan payments. The average payments for those are (on average) $500 and $350ish a month, respectively. Which would obviously greatly affect my saving rates.
Fifth, other than my health insurance premium ($420ish), most months my health care expenses are less than $200. So overall my health care costs are relatively low.
And hey, maybe your progress is far better than mine. In which case, congrats! But if your saving rate is lower and it’s bumming you out, just remember that it’s nearly impossible to compare apples to apples when it comes to people’s finances. Do the best you can, and pat yourself on the back whenever remotely applicable.
How did everyone else’s finances go this month? I know some of you are on unemployment, so I hope you’re surviving for now.