After the last couple of months of less than stellar savings rates, it feels good to write an update that comes closer to where we were at the first half of this year. Juuuuust shy of that 50% savings rate goal I set at the beginning of 2018, but it feels better than that because we’re back in an upswing from the lull of the fall.
Our most expensive months in 2017 were also in the latter half of the year, so it looks like I may just need to start planning for that moving forward. A fifty percent savings rate was difficult the first part of the year, but we probably could have edged it up closer to fifty five or sixty by paying as close of attention as I have the last few months, which feels a bit backwards, because we’ve certainly spend more as of late.
Vehicle maintenance, home maintenance, work clothes and boots for the husband, pet expenses, etc. All things that in theory should even out throughout the year have almost all been considerable larger the last four months of the year than the first two thirds. In previous years, we’ve also had to replace our refrigerator and washer and dryer around the holidays as well.
This huge fluctuation in expenses is certainly why so many people talk up the excellence of sinking funds; even so, I don’t see us going that path in the future. Sinking funds and other kinds of budgeting techniques only work well if you use an actual budget, and we don’t.
I guess we could always put aside an extra bit of money each month in the large categories I mentioned above, but we already do have a solid emergency fund in place. For the rest, we are still able to cash flow the difference in the spends months; it just means we send less to savings. At this point at least, I think I prefer to set things up as they are.
If we did put money aside for specific expenditures, I think we might be more inclined to spend more on them as needs came up. For example, if we put money away for home maintenance and had a good amount put aside when our old dishwasher finally dies, we’d be tempted to go out and pick a fancy new one to replace it with. Instead, since that will be an expense we cash flow in a single month, we will be much more judicious about the appliance we pick out and will spend less money for it.
This may not work for everyone, but with most things, personal finance is personal and you need to know what’s likely to work best for you and your family. And for us, that’s taking anything but the biggest expenses as they come.
November Income
November was a standard two paycheck month for us (the next three paycheck month isn’t until March), but we still had more money come in than just our W-2 incomes. To start with, we do get rental income from our roommate every month. We undercharge him compared to the market we’re in by at least fifty percent, but it’s well worth it for a number of reasons. For starters, he’s lived with us for more than six years now and is more or less part of the family at this point.
He also watches our animals when we go out of town, be it for a night or a long vacation, as long as he’s around, which is most of the time. We did knock a bit off his rent for May when we went on our East Coast road trip and were gone for thirteen days, but that would have cost us a good $1500 or so had we needed a house sitter. Plus, the animals get to stay home in their normal routine, which is way less stress on them.
I did also receive my quarterly Ebates check in November (though I didn’t actually deposit it until last week). It was only $30 or so, but I’m counting it here as “income” now that I automatically take the amount deposited and move it into long term savings or investments. Not a big number, and it isn’t enough to even move my savings rate for the month by even a partial percentage point, but every little bit helps. (If you don’t yet use Ebates – here’s a referral link for $10 to get started)
We also received our quarterly real estate investment check, and that’s significantly more than the one from Ebates (and it’s also a perpetual thing that requires nothing from my end). I don’t write too much about that here as it’s a work related investment, but let’s just say it’s somewhat like investing in a REIT, but much smaller, and I know more of the details about the actual projects we’re investing in. I’m currently saving up to invest in another project, and I have to say, I love investing in real estate where I don’t have to be involved in the day to day bits of rental management. I
Index funds are great and all (and we’re slowly growing those as well), but I sure appreciate an investment that has both equity and cash flow. Perhaps one day I’ll read enough posts on All About The Dividends, Tawcan, and Gen Y Money about dividend investing and make that a larger piece of our portfolio as well.
Food Spending
Once again, our food spending is on the high end of what I feel like is an acceptable amount for us to be spending as a family of three. Of course, this does include additional spending for Thanksgiving, but as we weren’t the ones hosting, this wasn’t a big extra.
We also did a day of wine and beer tasting in Woodinville in Black Friday, but I put that under the “miscellaneous” category this month, as it wasn’t exactly a vacation expense but didn’t feel quite right to put it under groceries / restaurant spending either. If you go to a winery or brewery specifically for tastings and not a meal, how do you categorize it? Sometimes I feel like I need additional categories in this spreadsheet, but at the same time, I like keeping things relatively simple.
Otherwise, the other big food expenditure that I feel is out of balance is the “fast food” category, which more or less means my husband’s workday lunches. As you might recall, I used to spend a ton of money on lunches out myself, but I broke that habit over a year ago. For me, the cost wasn’t nearly worth the amount of money I was spending each month.
However, my husband feels the cost is completely worth it for him. He works outside, and especially during the wet and cold winter months, he really appreciates a hearty, hot meal at lunchtime. Of course, he does have access to a microwave, but it’s in a shared office, and he generally likes to eat his meals alone while reading a book to recharge before the rest of the day. For him, the easiest way to do that is to buy lunch and take it back to his truck. It works for him, and even a couple hundred dollars a month really isn’t going to make or break our overarching financial goals.
We do have separate checking accounts as well as our joint accounts, and these lunches are a perfect example as to why. He is spending his money on what he decides has value, whether or not I find that same thing to have value. Of course, that wouldn’t work if suddenly he was dropping thousands of dollars on some fancy bottles of whiskey or caviar at lunch, but as long as it’s reasonable and ultimately comes from his separate account, then we don’t have a problem. I know not everyone agrees with the idea of having even partially separate accounts once you’re married, but it’s worked very well for us so far. And that’s what matters.
Vehicle Expenses
After the previous few months, hooray, we had no vehicle expenses to speak of this month! The only spending that fell into the car/transit category for November was $5 for the roundtrip on the Monorail the kiddo and I took the night we went to see the Nutcracker in Seattle. We did also use bus fare, but I only calculate that in when I refill my bus pass versus when that money is actually used for riding the bus. Of course, we’ll always have vehicle maintenance costs, but it’s nice to have a bit of a break between the two vehicles right now.
Pet Expenses
Pet spending was also down this month, again under $300. You know you have an older animal on a lot of medications when a “really cheap” month for pet care still comes in at a couple hundred dollars. Her medications alone cost a good $140 though, so between that and food we’re pretty much always guaranteed to break the $200 mark these days. She also takes taurine pills daily, but those are purchased pretty cheaply on Amazon and in bulk, so that isn’t an every month purchase.
That dog also goes in for a check up every three months or so now, so she and the cat have vet appointments this month, meaning that December won’t be quite as cheap as November was. What you do when you have animals though; when they need care, you take them in.
Vacation Spending
Considering the travel we did this month, our vacation spending is artificially low thanks to prepayment of some of it. I attended Cents Positive the first weekend of November, but since I had already prepaid for the conference and the plane flights, I spent very little money this month on that trip.
Splitting an Airbnb with Emilie, Erin, and Bethany meant that I spent just $66 on lodging for the three nights, and since I spent almost the entire trip at the conference itself, there wasn’t anything else to spend money on. Of course, the cost of the event and the plane tickets added up to about $500, but like I said, that was paid for before November and so not in this month’s update.
(If you’ve never used Airbnb before, here’s a referral link for $40 off your first stay. As you probably noticed by my trip to Cents Positive, Airbnb can sometimes save you A LOT of money over a hotel, plus you often have a place to cook and do laundry.)
While I was gone, my husband, kiddo, and my husband’s godfather went camping for the weekend, but since it was truck camping, it wasn’t an expensive trip. Otherwise, we’ve actually been at home on the weekends since then, though that will be changing again here soon.
Miscellaneous
Once again, the miscellaneous spending category ended up to be a significant number, but as the things we spent money on are all over the place, I really don’t think there’s a better way to categorize going forward without splitting things out into serious detail.
This month, the miscellaneous category encompassed boots and Carhartts for work for my husband, snowshoes and snow boots for the kiddo (seriously discounted though), a drivers license renewal for me, our Christmas tree and a few other holiday purchases like gingerbread decorations, a Goodwill trip for new clothes and snow outfits for the kiddo, and a new outdoor thermometer.
We had an outdoor thermometer connected to our furnace thermostat from when we had the system put in six years ago, but it died recently. We first looked up its replacement, but it would have cost us seventy dollars, so instead we just bought a simple analog thermometer for sixteen dollars that sits outside the window instead of having a pretty digital reading on our thermostat. Not worth an extra fifty-four dollars, especially if it’s likely to break again in another six years. Odds are the one we bought instead will last a lot longer than that.
November 2018 Spending (Excludes mortgage + daycare)
| Jun 2018 | Jul 2018 | Aug 2018 | Sep 2018 | Oct 2018 | Nov 2018 | |
| Groceries | $353.25 | $1,041.77 | $393.91 | $375.58 | $358.12 | $501.61 |
| Restaurants | $529.21 | $329.83 | $422.17 | $562.84 | $508.23 | $418.73 |
| Fast Food | $75.89 | $117.72 | $65.55 | $148.45 | $75.95 | $142.56 |
| Gym | $17.84 | $17.84 | $17.84 | $17.84 | $17.84 | $17.84 |
| Gas | $242.89 | $117.72 | $258.94 | $275.12 | $236.54 | $245.75 |
| Car/Transit | $737.53 | $640.86 | $88.12 | $114.05 | $1,113.27 | $5.00 |
| Utilities | $266.25 | $126.98 | $129.58 | $320.25 | $304.17 | $187.06 |
| Pet Care | $277.56 | $578.63 | $391.38 | $207.77 | $228.09 | $217.64 |
| Vacations | $148.00 | $483.45 | $110.11 | $808.13 | $414.17 | $310.03 |
| Misc | $164.62 | $629.79 | $232.95 | $1,009.10 | $476.83 | $914.22 |
| Total | $2,813.04 | $4,084.59 | $2,110.55 | $3,839.13 | $3,733.21 | $2,960.44 |
| Savings Rate | 44% | 30% | 67% | 31% | 32% | 47% |
| Excluding Mortgage Principal | 38% | 23% | 63% | 25% | 25% | 41% |
An overall savings rate of 47% with just one month left to finish out the year is pretty darn spectacular when you consider our previous years came in at 22-23%. Of course, it means we’re coming in short compared to the big audacious goal I set back in January to hit a 50% savings rate. Still, all things considered, if I think back to last year at this time, I don’t think I would ever had considered we could do as well as we have. Doesn’t mean I’m not a little frustrated that we won’t hit that goal, but I’m doing my best to keep it in perspective. After all, there’s always next year.
(And yes, mom, that positive spin right there is much for you. I know we are doing exceptionally well, but you know better than most anyone that once I set a goal for myself I get darn determined to meet it, whatever it is.)
Speaking of next year, it’s almost time to figure out what I’m going to shoot for in 2019. I know we won’t hit that 50% number this year, but we’ll be so close that just setting the goal for 50% again seems “too easy” in a way. I realize that a goal we fell short of isn’t actually one that can be considered too easy, but I’ll want to stretch us again next year, or we likely won’t hit it then either.
How and when do you set financial goals? Do you have suggestions for me on how to set a big one for next year?