I did things in inverse order this month where I updated my Net Worth before my savings rates. To me the savings rates is the most important battle, I have even created a new page to track my progress over time. Every dollar I don’t spend can either be invested in the future, used to pay down debt, or help bolster one of the layers of my emergency fund. I may track my income and expenses different than other bloggers, mainly because I use this as a purpose of updating my Net Worth. So any action that will increase my Net Worth, such as paying down the principle on a loan, or savings into a HSA, is savings in my mind as those actions will increase my net worth.
August overall was a grand month with extra paychecks from the daily grind. I had expected to pay $2,500 more for my house due to storm damage in April, however that hasn’t happened as of yet. I guess I will need to double check my paperwork to see where I stand on this, but I am holding those funds aside for now as I plan on paying it at the present time.
Income
- Paychecks: $6,387
- Interest & Dividends: $17
- Credit Card Rewards: $25
- Other: $0
Total Income: $6,429
Expenses
- Health Insurance: $124
- Health costs: $185*
- Mortgage Interest and Escrow: $635
- Car Loan Interest: $23
- Student Loan Interest: $55
- Water & Sewer: $37
- Electric: $35
- Natural Gas: $22
- Internet: $30
- Cell Phone: $0**
- Life Insurance: $44
- Trash: $0 (this is paid every 3 months)
- Dining Out: $35
- Entertainment / Hobbies: $20
- Personal / Household: $40
- Gas: $174
- Clothing: $28 (I declared sock bankruptcy plus my wife got a couple things)
- Meals: $163
- Snacks & Beverages: $21
- Car Repairs and Maintenance: $0
- Home Repairs and Maintenance: $0
- Car Insurance and Registration: $653 (6 month insurance for 2 vehicles)
- Vacation $2***
- Gifts: $36
- Misc: $272****
Total Expenses: $2,634
Savings Rate 59%
This was a very good month, although I didn’t quite reach the 60% challenge put out by the Dividend Diplomats, but I am pretty happy with the 59%. Just $64.29 less spent would have gotten me to the 60%. Which there was one decent sized optional purchase that if it wouldn’t have been made, would have bumped us over the 60% mark.
*Health Costs – This is mostly from a billing back in April that was all applied to a deductible. Medical billing is pretty slow it seems. We were over billed because they they didn’t apply any of the insurance discounts and got those applied before we paid the bill. Fun times, but I wasn’t going to pay an extra $250 or so if I didn’t have to.
**Currently free because of a referral from Dividend Mantra.
***Well I didn’t take a vacation for $2.00. We received a bill for $2.25 in the mail for tolls, apparently that is how they bill in Virginia? Oh well, we drove it, they got a picture, we paid.
****This is all related to the purchase of two bicycles.
Well that wraps up my August, how was yours?
Photo Credit: adamr/freedigitalphotos.net
59% looks good to me. We won’t hit that rate as long as my wife is at home full time. It’s funny you mention a toll-by-mail program. I had never received one, and did last week. Taking my inlaws to the airport last month I noticed one of the toll plazas was shut down, so there was nowhere to pay. I assumed, incorrectly, that there wasn’t a charge because the plaza was closed. WRONG. I received a bill in the mail for $3.80……which inflated the original $1.25 with plenty of admin charges for “running” the toll. These are life’s little annoyances, but they are annoying.
-Bryan
Hey Bryan,
Yea I wasn’t sure how these things worked. My bill was inflated too from $0.75 to $2.25 because of the “administration fee”… but ya know it would cost them probably the same or more to have someone sitting there collecting tolls of $0.75 and then backup traffic… that I don’t see why they are allowed to charge triple the rate? Granted Virginia tolls were MUCH cheaper than tolls in Ohio and Pennsylvania. I am glad my state doesn’t do too much for tolls, sheesh.
Kipp
59% savings rate is super impressive! I spent much less than I was expecting in September, despite going on a road trip, so I’m pretty proud of that. I haven’t calculated my overall saving rate by I expect it’s probably between 50-55% for the month.
Hey Taylor,
50-55% is very impressive especially if you went on a road trip! Can’t complain about that!
Kipp
59% is a great month! I like that you only include the interest on your loans. That’s actually the correct way to do it (in the real accounting world), but I’ve been including my principal payments as expenses, mostly just to show myself how much money is going toward debt. Maybe I’ll calculate it both ways in September, just for fun. Yes, I consider that fun :).
Hey Autumn,
I know it is the correct accounting way, I actually had a good sized debate about it being the correct way with Jason on my very first income and expense report. Although I should also be correctly depreciating my autos in expense, but I am also not counting income in retirement accounts as income. So right now maybe it is a bit understated expense wise, but I hope in the future that the income will be much more overstated than any costs that the vehicles actually incur.
I’m an accountant too so I understand how that is fun ;).
Kipp
Pretty awesome savings rate! Texas does their tolls that way too, although I’ve somehow been able to avoid getting the bill in the mail so far.
Thanks Ben!
Yea, I am not sure how they get everyone for those? Sometimes cars ride people pretty close and I can’t imagine them getting a good shot on the license plate in those situations. Maybe that is why I only got 1 bill and not two?
Kipp
Looks pretty good! And, 59% is great. I’m excited for your new bikes! Photos soon I hope?
Yea I should have gotten those pics in this post to be honest, just too busy this week! First payroll of the school year, auditors here, and then other crap going on. That also means I haven’t been getting around the blog-o-sphere much this week :(.
Sounds like you’re doing great things. I like that you track your credit card rewards as income. You were right there at that 60% mark. You’re doing great. Sock bankruptcy…lol, I need to do that, but I hate spending money on clothes. Ever.
I spent $18 on 40 pairs of socks. My usual shopping place had a pretty good deal going on. Buy 1 pack get the 2nd for a $1.00 PLUS 20% off apparel with the store credit card. So really it was buy one pack for 80% get one for $0.80!
That said I haven’t parted with the few remaining socks I have. I just can’t justify throwing out the few pairs I have left, they will eventually wear out and save some wear on my new ones.
Looks like a great month! Our August spending was high but we budgeted for all of the extra stuff. Fortunately, the next few months should be easier on us!
For normal expenses, I should be all set until November when I usually start my Christmas shopping. That and there are two family birthday’s in November, so have to get stuff for those…
I like the Savings Rate page, just a suggestion how about a fun picture to give it some spice. 59% is great, that’s in the 12.5 years to FI range, very nice sir.
Hey Even Steven,
I do need to get something on there, I was thinking a graph at first, but it is percentages so I wasn’t sure if I wanted to do that. I should maybe get a picture of something fancy, like a mansion or a castle
– because I would have no savings with one of those! Unless if it was a lego castle… that could fit in my budget.
Wow 59% savings is pretty good. Currently I’m only saving about 30% but want to bump it to 50%. It’s been hard to do, but nothing good in life comes easy.
Well it looks like you eat some pretty fancy meals from glancing at the pics at your wife’s blog, but maybe that blog well one day help pay for fancy meals!
Savings rate really just accelerates your pace for financial independence, I expect mine to drop to 40% once we have a kid. Daycare will be a killer when that day comes!
Kipp,
Congrats on the great savings rate!
And thanks again for setting up the referral for Aio. Gotta love free mobile phone service.
Best regards.
I am loving those free months, 4 more to go! No problem for the referral, I asked for you, just a bonus we both got it!
59% looks good. Interesting that you don’t break down the car insurance across 6 months. That’s what we do. We pay the insurance in lump sum but it’s broken down across 12 months in our budget.
Hey Tawcan,
I guess I am kind of doing it more cash basis, I will probably do it the same way when the mortgage is eventually paid off as well. In my state the bulk of our property tax is due in August. And by the bulk of it I mean like 95%. They really should just do one billing to lower the administrative costs, with the way they do it now, it doesn’t make sense to have two billings.
Very nice, and impressive income! Is that your wife’s and yours income combined? Keep up the great savings rate, I’m sure you’ll start averaging 60% soon.
Hey Henry,
Yes that is both of our incomes and expenses. We don’t do some crazy split finance thing, we are married and in this together. To me financial independence wouldn’t be a victory if she HAS to work. If she chooses to do something part time after, that is her choice.
Not sure about 60% this month, that was a high income month with extra paychecks!
59% is amazing! And your income is great, too.
I love the idea of sock bankruptcy; I might need to declare it soon myself.
Thanks Cecilia, I am very happy with the savings rate! Yea, I was waiting for a good sale before buying a bunch of socks. Being I normally shop at the same store I have a good feel for what deals normally are, so I can try to time stuff to get the best savings.
Looks great to me! You’re doing a nice job of keeping your spending low. Did you buy the two bikes used? That’s not a bad price. And that is really annoying about the tolls – I’ve only been through ones that are staffed with people. I guess other parts of the country do it differently!
Hi Erin,
No I browsed Craigslist maybe once or twice to see what was on there, they were purchased new. To be honest spending wise it wasn’t a bad month, we went out to the movies a couple times, had dinner out a couple times, got bikes, and had a decent sized bi-annual payment. Nothing really out of the ordinary for us!
Congrats, Kipp! 59% is great and will see you to financial independence before you know it.
Now to get the dividend portfolio kickstarted!
Hey NMW,
I got a secret… I have my portfolio on google spreadsheets and a page created, I just discovered that adding another page on my menu adds another line. That and I want to tweak my spreadsheet maybe a little more as well but you can take a sneak peak: http://franklyfrugalfinance.com/portfolio/
I just put everything i have at the end of the month to my brokerage account and go from there, maybe i should start keeping list of my expenses.
Nice saving!
cheers!
Hey Anha,
Well if you are not maxing out pretax investing, it could be a good way to see how much you can add to your contributions. Not sure on your long term plans if pretax savings is how you want to go or not. I do a little bit of everything, pretax, ROTH, and brokerage.
You did a great job with 59% savings rate! We’ve been trying to achieve higher savings rate each month. We’re not there yet, but hopefully we will be within a couple of months!
Good luck on achieving the higher savings rate! I am going to try to boost mine even higher next year.
Nice income and your savings rate is impressive! August wasn’t as great for me as we had some household expenses to pay for (ie. new fence) but Im hoping to get back on track in September
Doesn’t sound like it was the worse month for you, I hope your September does better! My August income is inflated a bit due to extra paychecks that month, September will be more of the normal income.