Savings Rate for August 2014

Build your piggy bank by saving

September is here already! Time for thousands of children to go back to school after two months of glorious vacation, but also time to look at August’s income and expenses report. Let’s whip out my budget spreadsheet and see how I’ve done.

Income
Paycheck € 2,007 As expected
Dividends € 0 First dividend payment is expected in September
Other € 535 Sold some stuff lying around
€ 2542

Income was pretty high this month, mainly because I sold some stuff I wasn’t using anymore. Selling  spare Super Nintendo games does boost your income significantly, like I wrote about in last week’s wrap-up. I tried to sell my SNES games – I’ll miss you Super Mario World – to offset the extra costs of moving and still be able to beat the Dividend Diplomats’ challenge of saving 60%.

Expenses
Rent € 350 As expected
Utilities € 62 As expected
Telecom € 40 High because of installation costs
Appliances € 121 Bought some stuff for my new apartment
Groceries € 142 Pretty happy with this
Restaurant € 89 Took my parents and grandparents to dinner
Healthcare € 16 Haircut among others
Games/PC € 19 Humble Bundle and some random tidbits
Subscriptions € 8 Google Play Music
Entertainment € 20 Beers with friends
Gifts € 15
€ 882

Boom! Only €882! I’m really pleased with this number, even though I had over €130 of unexpected costs and spent almost €70 on two one-off restaurant visits. If my expenses are this low every month from here on out I’ll be an extremely happy camper.

The mathematicians among you probably already figured out that earning over €2,500 and spending only €882 means a savings rate of 65.3%! That’s only 11% less than July when I was still living with my parents. At this rate I’ll be able to live off my savings in about 10 years, which sounds surreal.

Sadly though, I can’t keep selling Super Nintendo games. Let’s hope there aren’t too many unexpected bills on the way so I’ll be able to keep saving at least 60% of my income. Maybe I should adjust my overall goal of 50%  to 60% next year?

Of the money saved in August my bank automatically invested €95 in a tax-optimized pension fund. I used the remaining €1,565 to buy my first dividend growth stocks, an investing strategy I adopted earlier this month. My very first purchase consisted of 20 shares of the French oil company Total.

Even though my main goal is to save 50% of my income on average, I aim to save a whopping 70% for 2014 because I stayed with my parents for the first half of the year. Here are my savings rates thusfar:

  • January: N/A
  • February: N/A
  • March: 87.4%
  • April: 65.3%
  • May: 78.6%
  • June: 72.9%
  • July: 76.7%

Because of an error in my spreadsheet I won’t use the numbers from January and February to calculate my average savings rate for 2014.  From March onwards I’m at an overall savings percentage of 74%, which is slightly down from last month.

Thank you for your continued support. My current savings rate would not have been possible without your encouragement and other personal finance bloggers’ challenges. I hope you guys also did great this month.

Are you happy with your August savings rate?

44 Comments

  1. Wow, great stuff! I’m surprised at how low your rent is! Is that the rent at your new place or your parents? My August expenses were double the usual amount, but most were one time expenses. Keep it up!

    Cheers.

    1. That’s the rent at my new apartment! It’s ridiculously low in my opinion, especially considering how big and well-equiped the entire apartment is. No complaining on my side though! Of course, having a roommate helps.

      I’m going to check out your savings rate immediately! Love reading these kind of posts.

      Thanks for stopping by again,
      NMW

    1. If my roommate ever decides to move out, I’ll give you a call so you can come live with me and enjoy the low rent! 😉

  2. That is pretty impressive! I think I was at around 75% if you only count living expenses but I spent a lot on improving a piece of land which I guess counts as investing.

    1. Hey Pauline,

      75% is awesome! Improving a piece of land you own to increase its future value definitely counts as saving and investing.

      Thanks for visiting! Going to check out your blog now.

      Cheers,
      NMW

  3. Holy moly, 76.7% saving rate? That’s awesome! You’re lucky that the rent is so cheap.

    I don’t see any expenses for waffles, you should have a category for that just for fun. :p 😉

    1. 76.7% was last month when I was still living with my parents! Too bad I won’t be able to hit that target anymore any time soon. Don’t get me wrong though, I’m still super stoked about August’s 65% savings rate!

      Rent is cheap indeed and makes a big difference. Most of my friends spend about 100 to 200 euros a month more in this category.

      Ha, I might just do that next month! 🙂

      Cheers,
      NMW

    1. Thanks, Kassandra! FI still sounds like a far-away dream, but the current progress encouraging comments like yours truly make be believe I’ll be able to reach it.

  4. What an impressive savings rate – again! Your expenses are good too; let’s hope September is just as good to you 🙂

    1. Thank you, Nicola! I’m really happy with the current level of expenditures. Hopefully I can keep it up!

      I still have to check your monthly report. If there’s but one word about baked goods in there I’ll be jealous again!

  5. Congratulations on a solid saving rate! Keep it up!
    Also congrats on getting your first dividend stock. It’s quite a cool feeling to get that first dividend paid out to you.

    I’ve only been doing dividend growth investing for a little over a year, but the results have been great and especially tracking your growth in passive income is fun. It also make more sense to me to track the passive income instead of the net worth. You can track both, but net worth will fluctuate much more.

    In the end to grow that passive income quickly, your saving rate is key – especially early on. Getting to that first 100k as quick as possible has a big impact on the rest of your life as at that point the passive income becomes meaningful. It also sets your mentality and is motivating to keep going.

    Good luck with it!

    1. Thanks, AlphaTarget!

      I’m quite excited for the first dividend payout… There should be some coming up over the course of September.

      Your results are spectacular! Only a year and you’re already at $5,000 projected income for 2014! I like tracking my net worth too, but growing passive income probably keeps my eyes better on the goal.

      Almost halfway on the 100k mark! I’ve read that the first 100k are by far the most difficult, so I’m pretty excited to be making so much progress.

      Thanks for stopping by and for the encouragement,
      NMW

  6. Great job meeting your goal again. I really like how you display your budget, it is simple yet provides all of the key information. You should try to find another way to generate some extra income going forward.

    1. Thank you! I’m pretty happy with my budget too.

      Boosting my income is something I’ve been thinking about, but considering the high tax rate that applies to my salary already I’m not sure it’s quite worth it. When you lose about 50-60% of your extra income to taxes it’s much better to spend your time living frugally rather than trying to earn more. (Check out my post “Reaching Financial Independence When Facing the Highest Income Tax Rate in the Western World” if you want to read more about this.)

      Cheers,
      NMW

  7. That’s an excellent frugal month man 🙂 You’re going to be FI in no time! Hey curious, what’s your favorite SNES game? I really like Donkey Kong Country, and Mario Kart. The JRPGs like Chrono Trigger, and Final Fantasy III had the best stories and sound tracks though 😀

    1. Let’s hope so! 🙂

      So many good SNES games! The three Donkey Kong Country games are definitely at the top of my list. I also really enjoyed Mario Kart, Super Mario World, Donald in Maui Mallard, Star Fox, Zelda: A Link to the Past, and TMNT: Turtles in Time.

      Chrono Trigger was never released in Europe! I only recently played it and enjoyed it immensely. Love me some old school JRPGs. My favourite one is Secret of Mana.

  8. Nicely done. And I’m impressed that it wasn’t all that much lower than when you were living with your parents.

    On a side note regarding the SNES: I recently sold my system and games and it made me so sad. I felt so nostalgic having the system, but I never used it any more. But I was just so impressed I still had one that worked well. And I had some awesome games. Oh well, it’s gone now.

    1. Thanks, Alicia! I’m surprised by that, honestly. I though food and the likes was going to be a lot more expensive, but apparently I was very much mistaken.

      I just felt a great disturbance in the Force… You sold your Super Nintendo!? Even if I tried, I just can’t sell stuff like that, especially if I had it since my childhood. You must really have taken care of your SNES if it still worked after all these years. Fully working SNES consoles are starting to become a rare breed and find!

  9. NMW,

    Another stellar month. You’re still saving a really high percentage of your income even after moving off on your own. Awesome! Nothing like having the extra freedom and autonomy at little extra cost.

    The housing costs are key to all of this. Keeping transportation costs low is also really important, which I believe you’re getting for free through your work. Being FI in 10 years would be phenomenal. 🙂

    Keep up the frugality!

    Best regards.

    1. Stellar month, indeed! By mid-august I was actually quite surprised to find out how well I was doing, so I decided to step it up and go for the Diplomats’ 60%.

      Housing and transportation are two budget killers in Belgium (probably everywhere else too). Luckily my shared apartment is really cheap and for my commute to work I can rely on my employer, like you said. Not having a car also saves me about 2000 euros a year on maintenance, insurance and taxes alone, which makes about 10% of my average savings rate each month.

      FI in ten years still sounds like a far-away dream, even though guys like you show it’s definitely possible!

      Thanks for visiting,
      NMW

    1. FRD,

      Thanks for the encouraging comment, I surely hope so!

      Really enjoyed your mail, that’s what makes blogging so great. I still have to reply to your last mail though, but I’ve been really busy the past few days. Expect an e-mail tonight.

      Cheers,
      NMW

    1. Definitely a good month, Daisy! I’m really happy with it. Your 50% savings rate is pretty awesome too, well done!

      Earning more is quite hard for me though. Don’t get me wrong, it’s possible, but the way our tax system works it doesn’t make any sense time-wise. It’s much easier to save a buck here or there than to earn 20% more for example.

      Thanks for visiting,
      NMW

    1. Thanks, DFG!

      Often I work long hours, but when I’m at home I like to go for a run or a long bike trip. I also enjoy playing video games, which are cheap to pick up after a few months on PC. Because I’m still single, I also invite friends over quite often in the evening for dinner. They provide good fun all evening long without it costing an arm or a leg.

      Cheers,
      NMW

    1. I wish four years was true! Thanks for the generous estimation! It’ll take about ten years before I reach FI at best, depending on how the political and budgetary situation in Belgium evolves over the next couple of years.

    1. 30% is still better than 99% of the population! And it’s all about finding the right balance for yourself. If you’re happy saving 30% and enjoying life to the fullest, then go for it. No need to save more.

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