With the publication of my dividend income a couple of days ago you know a follow-up post containing my savings rate is about to make an appearance soon. You don’t have to wait any longer now that I’ve checked the numbers one final time in my budget tracker. Read on to find out how much I managed to save during a rather eventful February.
While 2015 started out great, February was a bit all over the place. Having pushed myself too far at work and in my personal life, my body finally decided to give in. I don’t often fall sick and I definitely can’t remember the last time I felt so miserable, but it clearly was high time to cut back on work and after-work activities even though I love both of them.
You see, it’s not just peer pressure, irrational savings behaviour, or fear of the stock market that can kill your financial independence dreams. Your own behaviour, financial or otherwise, could very well constitute a roadblock in and of itself. I almost lost sight of that, but honestly, what’s the point of becoming financially free if I’m forgoing good health?
Let’s jump into February’s income and expenses to see if my epiphany had an outspoken effect on my savings rate.
|Paycheck||€ 2,069||As expected|
|Dividends||€ 27||Picking up steam compared to last month|
|Other||€ 231||Side hustlin'|
Sweet! Salary increase! Because February marks my job’s first anniversary, my employer thought it fit to bestowe a higher paycheck upon me. It’s not much, but I’ll take an increase of a little over 3% after taxes any day since it’ll go a long way towards keeping up an average savings rate of 70% for 2015.
I was furthermore pretty happy to find that my dividend portfolio threw off over €27 already, making it the second highest month to date. On top of my 3% paycheck increase, I actually gave myself another 1% increase by saving and investing past salaried income. That’s fresh and immediately available income that I didn’t have to do a thing for apart from being invested in high quality businesses.
|Rent||€ 350||As expected|
|Utilities||€ 70||As expected|
|Telecom||€ 20||As expected|
|Home maintenance||€ 3||Light bulbs|
|Groceries||€ 89||Below my goal of €100|
|Restaurant||€ 14||Date night|
|Doctor's visit||€ 50||Will be reimbursed later|
|Healtcare||€ 22||Drugs and a haircut|
|Clothing||€ 74||Buttoned shirts|
|Subscriptions||€ 8||Google Play Music|
|Entertainment||€ 33||Drinks with friends and a party|
|Charity||€ 25||Donation to cancer research|
February’s outgoing money contains a lot of familiar and recurring items, but also two rather large one time expenses. First, my physician was happy to find me sniffing and coughing in his waiting room twice, which cost me €50. Thankfully that money will flow back to me through health insurance. Second, I bought two new buttoned shirts on sale for €74 as to make sure that my wardrobe remains fully stocked.
As a result, I fell short to make my 70% goal this month with a savings rate of just 67.4%. While that’s too bad, I don’t see this as a failure. Remember that I’m aiming to save 70% on average for the entire year and that there are ten more months to make up the admittedly very small difference of this month. Besides, anybody saving well over 50% of their income is bound to make rapid progress towards financial freedom!
Another reason why I shouldn’t sob is that I still managed to save €1,569 in absolute terms. That’s more than a lot of fully employed people make for an entire month, which says something about how much I make, but even more about how low I manage to keep my expenses. Those savings were immediately deployed on the Swiss stock market to purchase a stake in pharma giant Roche (VTX:ROG) and to prop up my personal pension fund.
The graph below shows how I’ve done over the past few months. As you can see, and this comes as no surprise, February doesn’t differ much from other months. The orange bars show 2015’s savings rates, while the blue bars contain my performance in 2014 for comparison.
Next month I’ll be able to truly start comparing savings rates across years, which should prove interesting. As I slowly increasing my monthly cash flow, my overall savings rate should follow the same upward trend, unless I succumb to lifestyle inflation. For now, though, we’ll have to make due with my average savings rate for 2015, which comes out at 68.5%.
I sincerely hope you enjoyed this post as reading about savings rates is a not-so-secret guilty pleasure of mine. I’ve already devoured some of the income and expenses reports that popped up over the past few days, but I’m looking forward to reading more. So that’s why I’m now off to check out your blogs and see what’s what! If you don’t have a blog, be sure to leave a comment on how you did last month as I’d love to hear about your progress towards financial freedom.
Thank you for reading and for your continued support.