Well, the funds are all transferred and the Excel sheet filled out. So let’s see how I did this month with my saving rates.
Just as a reminder, I refer to saving rates plural because I calculate my rate three different ways: pre-tax, post-tax and post-tax plus mortgage principal. Just to cover all of my bases, I guess.
So how did things go this month?
Well, with more MeetUp events plus Aaron living in Tempe, I’m definitely putting more miles on my 2012 Civic than I’m used to. Still, it’s not even at 83,000 miles yet. So I should have plenty of life left in it.
But since a replacement will eventually be needed, I put $300 a month into a car fund to be sure I have a large down payment or, preferably, the whole cost ready when the time comes.
This is a long-term goal, so it counts toward my saving rates.
One of my numerous sinking funds is for my yearly car insurance premium. I put $100 a month into an account in preparation for paying for my next year of coverage.
Since this money is being saved for less than a year, it does not count in my saving rates.
Obviously, these aren’t savings. But each month I do have to put aside $1,551.75 for FICA taxes and federal and state taxes in preparation for my quarterly tax payments. And since that’s a big chunk of my income, I figured it’s worth noting.
Again, not savings, but where a larger-than-I’d-like amount of my money went this month.
This month had some things like the $300 retainer and other items that goosed up the bill. So I paid a bit over $1,573 to my credit cards this month. Ouch.
Another thing that isn’t savings: video sessions with my personal trainer. I started those as a way to get me back into being active. And they’ve really helped. I’ve bought 30 sessions so far. I think I’m going to buy one more 10-pack, then just pay him occasionally to come up with a workout plan using the free weights/weight machines at the gym.
As such, I kept out $350 to buy the last round of workouts.
I realized I’ve never mentioned a few things I keep out money for. For example, my utilities come to about $220 a month. My life insurance ($52.60) gets auto-deducted. There’s also $30 a month that gets deducted for the protection plans for the HVAC units on the main and guest house. And of course there’s the money I keep out for my day-to-day spending.
The main house’s HVAC unit is about 10 years old now — and they generally last 12 to 15 years. And aren’t cheap.
So I’ve started saving $145 in an account each month in preparation for a replacement. I’m hoping my current one is polite enough to last the full 15 years. But only time will tell.
This is a long-term savings goal (I hope!) so it counts toward my saving rates.
A relative recently came out as transgender female. While I’m not close with her, I can imagine few things worse than being born with the wrong body. Since she’s a teen now and thus has at least four years until she wants any surgeries, I’m putting $50 a month into an account to give her when the time comes. It will be a drop in the bucket, I suspect, but at $2,400 drop. (Or more, depending on when she decides to have any operations.)
This money isn’t for me, so it doesn’t count in my saving rates.
Mint Mobile fund
I get a great deal with Mint Mobile: $15/month (plus taxes) for 3 GB of data and unlimited talk and text. The only catch is that after my three month intro period, I had to start paying for a year at a time to get that rate.
So each month, I’m putting aside $16.78 to cover next year’s bill.
This is a short-term goal, so it doesn’t count toward my saving rates.
Did I mention I have a zillion sinking funds? This one is because I pay Orkin about $330 a year to be on call for any termite activity in my house. Termites seem to love this place, so it’s money well spent. But I don’t love the hit my credit card takes each year.
So I put $27.67 into an account until the next bill comes round.
Since this is also less than a year away, this does not count in my saving rates.
Guest house rent
I have a small guest house out back that I rent to a lovely tenant. She’s quiet and pleasant and wants to stay as long as I’ll have her. And since I don’t really need the money at present, I only charge her $500 a month.
I add this money to my mortgage payment each month to help pay down the loan faster.
This amount counts toward the third saving rates, which includes additional mortgage principal paid.
Throughout the years, I’ve trimmed my expenses here and there, which has lowered my monthly outlays by about $160. I put the money I’m saving into an account called Saved Savings so that those savings don’t disappear into the ether of general spending.
I also use this account for any money I save with coupons, store rewards or just general sales on things I would’ve bought anyway. Plus I deposit any cash back I get from my Citi Double Cash card.
This month, the total for sales/store rewards/coupons/credit card rewards was $141.12. That got added to the $160, and that $302.12 was tacked on to my mortgage payment.
Like the guest house rent, this gets counted in the third saving rate, which includes additional mortgage principal paid.
I’m trying to save up a year’s worth of my emergency budget in this account. Which I will hit in about five more months. Yay!
So with each paycheck, I take $200 and put it in the EF. But since I like to make things complicated, I also take what’s left over after all of the above has been accounted for and round it down to the nearest $100. So $1,550 would become $1,500, and I’d put the $50 into the EF.
This month that was $38.91 extra to the account.
The $238.91 is long-term savings and thus counts toward my saving rates.
After all of that is dealt with, I break up the remainder into Savings and to my SEP-IRA. This month, I decided I didn’t need anything going to savings. The balance is plenty healthy, and I’m keen to max out my SEP as soon as I can. (I can contribute up to 25% of my income as an employee of my company.)
So between the leftover from all that plus some income that came in from the blog, I was able to contribute $1,345.96 to this retirement account. So Thanks to that and past contributions, I’m now only 14.6% away from maxing out the SEP.
After I do that, I’ll start contributing via my solo 401(k).
Obviously, retirement contributions are long-term savings. So they count toward my saving rates.
How did I do?
When figuring out my savings rates, I made to sure include all income from the month: paycheck, blog income and guest house rent. Then it was just a matter of some calculations to figure out the rates, which turned out to be:
Post-tax plus additional principal: 42.1%
Logically, I know these are pretty good numbers. But since I shoot for 50% on that last rate, I’m a little disappointed in this month’s results. I remind myself that I’m lucky to be doing this well — and that I’m making great progress.
But I’m also a type A gal who wants to be the best in everything.
Unfortunately, I’m also a gal who likes takeout and going out. So I don’t think my inner tight-ass is ever going to get quite what she wants. Such is life.
So I’ll just try to focus on how close I am to finished up with my SEP-IRA, and how much money I’ve been able to shovel at my retirement accounts to make up for lost time.
This is just a reminder that no two people’s finances are alike. There are myriad factors that can help or hinder someone’s saving rate. For example, I have a few noteworthy advantages.
First, I make good money. Very good money, even outside of the context of my field of work (customer service). If there’s more money coming in, there’s more money to save. It’s as simple as that.
Second, I don’t have kids. I’m sure I would’ve loved the hell out of any rugrats Tim and I produced, but I also admit some relief to it not having happened. Having only myself to take care of is lovely. And while adorable and rewarding, kids can be nasty little money pits. But like, really cute ones.
Third, my mortgage is very low. Housing is one of the highest expenses for many people. I, on the other hand, have a base payment of $612.59. Some rooms in Phoenix go for more than that. So even taking into account that I have to pay for repairs, I’m generally spending significantly less than most people in this country for a roof over my head.
There are plenty of other factors, I’m sure. But you get the idea. The point is, you shouldn’t compare your rates to mine because we are likely in two very different situations. What matters is that you’re doing your best to save. And that if you can afford it, you’re still allowing yourself a bit of money to enjoy the present as well.
If you’re on that track, you’re doing great.
How did everyone else’s last month go?
May financial update