This was a great month, but one requiring a fair amount of math.
Now that I’ve maxed out my employer contribution side of things, all retirement contributions go to the 401(k), which means every month I have to do math about how much I can hold back from my check. It requires working backwards and then checking/rechecking my math because… I’m me.
But everything is all tallied, and the results are in. Let’s see how I did, eh? (As a reminder I calculate my saving rate three ways: pre-tax, post-tax and post-tax plus additional mortgage interest paid.)
Each month I put $300 into a bank account in anticipation of needing a replacement car at some point. Hopefully, when the time comes I’ll have the whole cost of a new car. But if not, I’ll have a very large down payment and I’ll be used to a monthly car payment. (Though it’s much more fun when the payment goes to me instead of a bank.)
With the cost of both new and used cars going crazy, I’m very glad I started this habit. I have at least half of what a new (or apparently probably used) car would cost if something happens. But hopefully my lil Honda Civic has many more miles left in it, since it’s still under 85,000.
Since this is a long-term goal — that is, (hopefully) the money won’t be paid out within the next year — this is counted in my saving rates.
Fair warning to anyone who’s new here: I’m addicted to sinking funds. This account is to accrue money so I’m ready when the annual premium hits. So every month I put $100 into Ally account.
Since this money is less than a year away, I don’t consider it true savings, so it’s not included as part of the saved money when I calculate my saving rates.
Definitely not savings. But since it’s where a good chunk of my paycheck goes, I figure it bears mentioning here. As an S-corp, each quarter I pay both halves of my FICA tax, plus state and individual income tax. That comes to just under $1,553.
Ouch. But paved roads and funded schools and Social Security are good things to have around, so… meh.
As with the last section, not savings obviously — but the balances add up to a decent amount of money since my $408 insurance gets charged to it each month, plus charitable donations and some other recurring expenses.
This month the total of my cards was a bit over $950.
About a year ago, I was reminded that HVAC units generally last 12 to 15 years — and mine is 10 years old. So I’m putting $`145 a month away in the hopes that I’ll have most or all of the cost covered when the time comes.
Since I won’t be paying this money out for (please please please) more than a year, this does count toward my saving rates.
A relative recently came out as transfemale. Those surgeries aren’t cheap, and I’m pretty financially comfortable right now. So I’m putting $50 a month aside that I’ll give to her when she’s 18 — or whenever she decides to get the procedure(s). It means I’ll have at least $2,400 to give her when the time comes. Nowhere near enough to cover the expense, but hopefully it helps.
Since this isn’t money I’m going to keep, I don’t count it in my saving rates.
Guest house rent
I have a very nice tenant in my guest house. I only charge $500 because I don’t strictly need the money and it ensures I can be very choosy about how I rent to.
Apparently it’s now been two years since the gal moved in, and she’s a great tenant. (She apologizes when things need to be fixed, god love her.) I add this money to my mortgage payment each month, so it counts toward the third of my saving rates.
A relative had a small windfall and was feeling generous. So I got $750 for my birthday. (!) I decided to put it all into retirement. (Which is to say, I held back an extra $750 when I wrote out my paycheck, so the funds could go into the i401(k).
Since this went to the long-term goal of retirement, I’m counting it in my saving rates.
My house seems to be a delicacy because I’ve had multiple instances of termite intrusion. So I have a plan that allows me to call Orkin out any time there’s activity, and they nip it in the bud.
But I got sick of taking a $330 hit each winter when the premium came due, so — surprise, surprise — I started this sinking fund. Each month I put $27.67 into this account so I’ll have the full amount in December.
Since this is a short-term goal, it doesn’t count in my saving rates.
Did I mention I’m addicted to sinking funds? Well, at $15 (plus tax and fees), Mint Mobile is a great deal. But since I have to pay for a year of service to get that rate, I decided to start an account and sock away $16.78.
This is also a short-term goal and thus doesn’t count in my saving rates.
My phone is actually only a year old — the previous one died a couple of weeks before the year warranty expired — but it’s also an iPhone 7, which means that it may not be supported much longer updates-wise. And I don’t know how long it will take for that to interfere with functionality.
Or maybe I’ll just want a newer, cooler phone — especially if it means my clumsy thumbs get more screen space to work in. Either way, I’m hoping to have the full cost of a replacement phone when the time comes. So I’m putting $50 into an account.
I’m not sure when this money will get used, so to be safe, I consider it a short-term goal and don’t include it in my saving rates.
Over the years, I’ve implemented various frugal hacks that keep saving me money, like cutting the cord. In all, they save me about $160 a month.
To make sure that money actually gets saved, I created the Saved Savings account. Whenever I save money — with a sale, store reward, coupon, cash back etc. — on something I was going to buy anyway, I put the amount saved into my Saved Savings account.
In addition the base monthly amount, this month I saved $97.65. Well, about half of that was credit card rewards. But anyway the money was saved.
This amount gets added to my mortgage payment, so it counts in the third rate.
I’m currently trying to get at least one year of my emergency budget saved up in this account. I was already putting $200 a month in, but I decided to boost my savings a bit with a little trick. One that, because I’m me, is needlessly complicated.
Basically, I take my paycheck and deduct all of the above expenses plus a few auto-debited monthly expenses (electricity, life insurance, etc.) and the day-to-day spending money I keep in my main bank account. The amount leftover then gets rounded down to the nearest $100, and the difference goes into the emergency fund.
In other words, if I had $1,050 left after all of that, I would take the $50 and put it into the EF.
Like I said, needlessly complicated, but it has helped.
Anyway, this month it was $84.76. I’m getting closer and closer to my target amount!
Since the emergency fund is (hopefully) a long-term goal, the $284.76 gets counted in my saving rates.
Retirement & Savings
This left $2,100 to divvy up between retirement and savings.
Last month, I had to take out around $420 for new car tires and around $450 to finally get rid of the pigeons at my house. So this month I put a little more than usual into Savings: $500.
The other $1,600 went into my solo 401(k) along with the generous birthday gift. Plus I had around $217 of income from the blog this past month. So that went in too for a total retirement contribution of just over $2,567. Woot!
All this money counts as long-term savings and thus is included in my saving rates.
All in all
So how’d I do? Pretty great!
Post tax plus mortgage principal: 66.5%
While the $750 gift obviously was a big boost, I actually had a pretty great month even without that. The rates without that boon would’ve still been:
Post tax plus mortgage principal: 62.3%
So it was really just generally a good month. But I’ll take $750 anytime it’s offered. In case any of you are so inclined.
As always, a reminder
It’s natural to want to compare your progress to others. I find myself doing it a lot. But it’s important to remind ourselves that most people’s financial situations look very different.
My situation is different from many people’s, and some of those differences make it a lot easier to save.
First of all, I have a high income. It’s just easier to save when there’s more money left over after expenses are accounted for. Pretty obvious, but I think we tend to forget that when we see saving rates different from ours.
Second, no kids. For better or worse, I’m single and have no kids. Kids (and as I know all too well, some partners) can be pricey. I don’t have to keep anyone besides myself housed and clothed. No outgrown shoes, no field trips, no outrageous expenses for a classmate’s birthday — nada.
Third, my mortgage is ridiculously low. I’d pay more than double for an apartment in most cool areas of the Greater Phoenix area. I’d pay about 50% more for the uncool places. So yeah, that gives me a lot more money to play around with.
So if your rates don’t look like mine, remind yourself that it’s rarely apples to apples. As long as you’re putting away something (income permitting, obviously), you’re ahead of the game compared to a lot of people.
How did everyone else’s last financial month go?