Welp, my social life/support network may be crumbling, but hey, at least I’m doing well financially. I guess I can always buy new friends?
Okay but seriously let’s focus on a positive thing in my life — and one that isn’t affected by feelings. Well, unless I indulge in retail therapy.
So here’s where my money went this month:
My 2012 Civic has around 82,500 miles on it, so short of an accident (no whammy no whammy no whammy) it should last me a good long time. Nonetheless, I’d love to have the majority or all of the replacement cost on hand when the time comes.
So each month I put $300 in this account. And pray that like last time I can maybe find a super gently used car (this one was only two years old and had fewer than 20,000 miles on it) so I don’t even have to pay retail.
Since this is a goal that’s more than a year away, I count this in my various saving rates.
As anyone who reads these updates knows, I’m a tad addicted to sinking funds. Why take a huge hit — or even medium-sized hit — in one specific month when you can just prepare throughout the year?
So each month I put $100 into an account to be ready for my yearly premium bill. Since this is a goal of less than one year, I don’t count it in my saving rates.
The main house’s unit is around 10 years old at this point, and they generally last 12 to 15. And they ain’t cheap.
So I’m putting away $145 a month and hoping that my current unit can make it another four or so years.
Since this is a long-term goal, I count it in my saving rates.
I have an iPhone 7, which is still working pretty darn well — especially since I got a new one last year when the previous one inexplicably died — but updates will stop before too long/. And I don’t know how long that will take to affect the apps I use.
So I’m saving up $50 a month toward a replacement. Since this will likely be less than a year away, I don’t count it in my saving rates.
A relative recently came out as transfemale. And those surgeries are pricey.
While I can’t offer the whole cost, I’m saving $50 a month into a fund that I can give her when she’s ready to have the procedure(s). I should have at least $2,400 by that point. A drop in the bucket, but hopefully a useful drop.
Since this money is for someone else, I don’t count it in my saving rates.
I only pay $15 a month (plus taxes/fees of course) for my 4 GB data plan with Mint. Logically, I know that a $200 expense doesn’t throw off my credit card bill too much. But it still annoys me, so — surprise, surprise — I created a sinking fund for this.
Thus I put $16.78 into an account each month, so I’ll have the whole amount saved up next spring.
Since the money will be paid out in less than a year, this doesn’t count toward my saving rates.
Apparently, my house is delicious to termites, so I’m very grateful that I have a termite plan in place. But the $332 addition to my credit card each December sucks. So you guessed it: sinking fund.
I put $27.67 in each month. Like the cell phone bill, this will paid out in under a year, so it doesn’t count in saving rates.
Guest house rent
I rent to a lovely gal and her adorable dog. She’s a great tenant. Actually, last week she alerted me to it having been two years since she moved in and thanked me for giving her a nice and affordable place to live. Awwww.
I charge her $500 including utilities, which is definitely below market rate. But I don’t strictly need the money, and I’d rather have a good tenant and get a little less than a mediocre or bad one who pays more.
I put the $500 as additional principal in my monthly mortgage payments, so this counts toward the third saving rate I calculate, which includes additional principal.
Frugal hacks throughout the years trimmed about $160 off my expenses, so I put those aside and call them saved savings. That’s also what I call the money that I put aside from saings from coupons, sales or store rewards on things I’d buy anyway.
This month there hadn’t been many sales/coupons/etc savings, so the total was only $179.34. As with the guest house rent, this amount gets added as additional mortgage principal, so it counts toward that third saving rate I mentioned.
Obviously, these aren’t savings, but since I’m accounting for where my money goes in a given month, I figure they’re worth noting.
I pay state and federal individual taxes, plus employer and employee FICA taxes for the amount my company pays me as an employee. The total is $1,551.75 that gets set aside for my quarterly payments.
Again, not savings but it accounts for a fair chunk of my paycheck. This month, my main credit card bill was around twice its normal size.
As a result, I had to pay at total of $1,524.50 to pay off all of three statement balances. Ouch!
My friends and I were still making up for lost time and going out a fair amount. Plus I went to a couple of MeetUp events too. So I guess that all added up — along with other expenses obviously: $400 insurance, $65 monthly doctor visit, charitable contributions, etc.
But given everything going on, I guess it’s good I went out with the group so much. My social circle, or just my interactions with the group, may look very different in the future.
This is one of the ways I make things weird and complicated. I don’t know where these ideas for complex systems come from, but I guess don’t argue with success.
In this case, in order to speed up my reaching a fully funded 12-month emergency fund (of my emergency budget) I started padding the $200 I put in each month. Beyond that, I take the amount left over after all expenses/sinking funds have been dealt with and round it down to the nearest hundred. The difference gets thrown into the EF.
In other words, $1,550 would become $1,500 and the $50 would go into the emergency fund account.
This month, that meant an extra $31.69 was thrown in the emergency fund, for a total of $231.69. This counts toward my saving rates.
I realized recently that it’s probably kind of weird to have an emergency fund and a savings account.
But it soothes me to take expenses out of savings and keep my EF untouched. To know that unless the savings account runs dry, I have a year’s worth of my emergency budget — well, almost — if worse came to worst.
So yeah, I have this separate savings account. Since it already has a very healthy balance, I’m not too concerned with growing it in leaps and bounds. Thus I chose to put in just $200 of the remaining funds.
Adding in some business income that I received, this meant I was able to contribute $1,517.91 to my SEP-IRA.
I can contribute up to 25% of my employee salary into the account. And this contribution puts me at 76% of that total. (It’s worth mentioning that 10% of those contributions was thanks to a work bonus. That was definitely a boost.)
Retirement contributions of course count toward my saving rates.
How did I do?
As you may have noticed, I referred to saving rates plural. Since no one can seem to agree on the “right” way to calculate this, I just gave up and do three ways: percentage saved from pre-tax amount, percentage saved from post-tax amount, percentage saved (including additional mortgage principal) from post-tax amount.
Pre-tax income saved: 28.7%
Post-tax income saved: 35.3%
Post tax plus additional mortgage principal: 45.2%
My goal is to hit 50% with that third saving rate, so the high credit card bill really fouled me up there. But I remind myself that this is still pretty darn good progress and a lot more than many people can manage. Which brings me to my monthly reminder…
Apples and oranges
My finances don’t look like yours. I guarantee it. So please do not compare your results to mine — unless you’re doing way better than I am, I suppose — because our situations are likely very different.
First and foremost, my job pays me very well. My boss is very generous and I do at least 16 hours of overtime (so equal to 32 hours’ pay) each month.
Second, my mortgage is ridiculously low. It went up to $612-something this year. There are few people with housing costs that low. Huge advantage there.
Third, for better or worse, I don’t have kids. Adorable lil things, worth every penny I’m sure. But boy oh boy is that a lot of pennies!
Fourth, no car payment! I will drive this sucker into the ground, God willing, so that saves me hundreds every month.
I’m sure there are more advantages I have, but those are the biggies that make it far easier for me to save money than many folks.
While it’s really nice to be able to achieve higher saving rates, I don’t think that these results are possible for many Americans — especially if they don’t want to live only for the future.
So we all need to just concentrate on doing the best we can with the money and priorities we have. If you’re doing that, then you’re doing just fine.
How’s everyone else holding up financially? Anyone know where you buy friends? The Dark Web, I assume.
(Actually one person in the group has already reached out to assure me I haven’t lost them as a friend. So even if the group dynamic proves ruined, it’s nice to know I’ll still them.)