Keeping as much money in your pockets as possible remains the principle on which financial independence is built. That’s why I’ll continue to share a detailed report of my savings every month. By doing so, I hope to keep myself motivated, but also to provide you guys with enough insight to see what it’s like to try and become financially free.
With that said, it isn’t always easy to save a substantial amount. Unexpected things happen. There’s bad months, but also good months. That’s why I’m happy to report that March turned out to be an excellent month. The title of this post might as well have been called “Savings Rate Extravaganza”!
A rather substantial windfall is behind my excellent March savings rate. My insurer offered four times last year’s interest payments to buy out my account accumulating over €18,000 at a 3.15% interest rate. Having all this cash on hand made me wonder if I should hold on to it or immediately invest it into the stock market.
Even though I decided to keep the cash savings because I hope to acquire my own home in the near future, many commenters felt otherwise. This in turn prompted me to also question if I should benchmark my portfolio to an index or maybe even other people’s performance. Tracking our own goals is much more important to many of us, as it turns out.
Because this post helps me do exactly that, we better get to it, right?
|Paycheck||€ 2,080||As expected|
|Dividends||€ 103||Biggest month yet|
|Other||€ 2,457||Side hustlin' and insurance premium|
Boom! Double the usual amount of income. Even though I’m really glad to see such a big insurance premium roll into my account, there’s one other thing I enjoyed this month: dividend income. Cracking the €100 mark for the first time feels really good, let me tell you!
Receiving €103 doesn’t sound like much, but those dividends amount to 5% of my regular paycheck or almost 12% of this month’s expenses already. Those dividends will furthermore start working on their own, increasing my passive income even more in the future.
|Rent||€ 350||As expected|
|Utilities||€ 70||As expected|
|Telecom||€ 20||As expected|
|Home maintenance||€ 4||WD-40|
|Groceries||€ 138||Hosted three parties|
|Public transport||€ 41||Bought a train pass|
|Bicycle||€ 14||New brakes|
|Holidays||€ 51||Two-way ticket to Dublin|
|Games||€ 5||Rayman Legends|
|Sports||€ 96||Renewed dance class|
|Subscriptions||€ 8||Google Play Music|
|Entertainment||€ 55||Drinks with friends and paintball|
|Gifts||€ 15||Birthday gift|
An old saying says that high income begets high expenses – or something similar, I never was good at paying attention in class. Because you can’t build a financial independence or early retirement empire on high expenses, I’m a little sad to see my outgoing money jump up. I’ll definitely have to work on that for the coming months.
Allmost all of the expenses bump comes from one-off items like three parties I organised at home, a new train pass, new bicycle brakes, a plane ride to Dublin and back, and a renewed dance class subscription. All things considered that’s not too bad, but not something that should be repeated every month.
Overall, March’s savings rate comes out at a whopping 81.3%! That’s the second highest savings rate ever recorded. Incidentally, the best savings were achieved in March of last year, but for completely different reasons – remember that I was still living with my parents back then. Because I’m trying to save 70% on average for the entire year, March is going to provide a massive boost to reach that goal.
In absolute numbers I managed to pocket €3,770. That number sounds even better than a percentage-based one! With this much cash on hand I couldn’t wait to finally purchase two stocks I had been eyeing for months. Seven shares of German dividend champion Munich RE (ETR:MUV2) and fifteen shares of Belgian REIT Home Invest Belgium (EBR:HOMI) are now working hard to increase my yearly dividend income by at least €75.
Logging your income and expenses isn’t always fun – although I would beg to differ – but it’s great to have access to detailed statistics and information. From now on we’ll be able to compare year-over-year performance on a monthly basis, which should prove interesting. For 2015 I’m currently sitting at an average savings rate of 74.9%, which is a tad higher than last year. Excellent!
As you can imagine, I’m in high spirits with the progress I’m making, not only on the savings front, but also with my growing dividend income and rapidly ballooning net worth. When I started this blog in July of 2014 my financial independence journey could go a myriad of ways, but thanks to the support of our community it’s been an incredible experience so far. Every time I receive an encouraging comment, I try to do better and push things further.
So once again thank you very much for all your support and motivational messages over the past months!