I’ve been tracking my income and expenses for a couple of years now and you guys have been able to follow along since I initiated this blog last year. December marks the final month of the first full year I’ve published my savings rate online. To top my already awesome year off, this month’s savings rate was through the roof again!
I enclose my savings rate online for two main reasons. First, I want to show everyone it’s possible to become financially independent on an average worker’s salary. I don’t earn a six-figure income and it’s unlikely I will ever belong to the 1% income group, but that’s not necessary anyway to reach financial freedom. By keeping my expenses low I’ll save as much as I’m able to.
Second, I write these reports as a way to reflect on both my income and expenses of the past period – the entire process is somewhat cathartic. On top of that, it’s a live look for you at my journey, which hopefully motivates you in the same way as it does me to save as much as possible . You’d be surprised how easy it is to cut out non-essential spending when you’ve got over 5,000 people watching your every move online.
So below you can find my income and every expense of the past month as detailed as possible without overloading you with information. If you’re interested in more details you can always ask me about a certain expense in the comments below.
|Paycheck||€ 3,067||Higher than usual due to year-end bonus|
|Tax refund||€ 1,477||Refund on income year 2014|
|Cycling||€ 96||Renumeration for cycling to work|
|Dividends||€ 178||Another good month|
|Other||€ 189||Side hustlin'|
When tallying up December’s income, I count a whopping 5,000 Euros. I still can’t believe I made more than €5,000 in a single month!
That’s the highest number yet, mostly due to a year-end bonus and a massive tax refund on top of my usual paycheck. However, the dividend income this month also upped the ante, to its highest level yet. At the current level, December’s passive income makes up almost 10% of my normal paycheck – awesome.
The additional income is a nice boost to my savings rate so close to the end of 2015. What excites me more though is that I’m able to put all this extra cash through the compounding machine, mostly by investing it in dividend growth stocks and index funds. As a result, my income will be even higher next year.
|Rent||€ 350||As expected|
|Utilities||€ 70||As expected|
|Telecom||€ 18||As expected|
|Appliances||€ 16||HDMI to HDMI + optical audio converter|
|Groceries||€ 177||Lots of beer|
|Restaurant||€ 15||Fries and pizza|
|Public transport||€ 46||Lots of travel by train this month|
|Bike||€ 116||Winter tyres|
|Healthcare||€ 22||Haircut and cleaning product|
|Holidays||€ 56||Plane tickets to Dublin next month|
|Subscriptions||€ 32||Google Play Music and website|
|Entertainment||€ 36||Beers with friends|
|Gifts||€ 48||Christmas gifts and charity|
Whoa there, sailor! That’s a lot of money leaving your accounts, way more than usual at least. What happened?
First, I stocked up on beer because I was all out – gotta keep my visitors hydrated, ahem. For those interested, I picked up two crates of Stella Artois and an assortment of bottles from Duvel, Gouden Carolus Tripel, Classic and Christmas, Guillotine, Tripel Karmeliet, Urthel Saisonnière and Samaranth, Gulden Draak, Wolf 9 and Chimay Bleu.
Second, I purchased new winter tyres for my road bike. Because my Trek Madone 2.5 was still running on slicks I kept sliding all over the place in the rain, which is no fun. I expect this purchase to pay for itself in a couple of months though.
Third and last, the “fun” category jumped up due to Christmas gifts and low-cost plane tickets to and from Dublin through Ryanair.
I nevertheless managed to attain a savings rate of 80%, the second highest number this year! Only during March did I manage to keep more of my hard-earned cash in pocket, mostly due to an insurance premium windfall. December’s rate is furthermore the second highest since I moved out of my parents’ place and started living on my own.
As a result, my financial independence fund grew by a massive €4,005. A large part of that money is going to be used to top up my savings accounts, but also to add some more dividend growth stocks to my portfolio – yes, I’m looking at you, Unilever (LON:ULVR).
The graph below shows the past performance for this year, but also a year-over-year comparison since I started blogging.
It’s interesting to see that no real conclusions can be drawn from the graph above, other than that my savings rate fluctuates from month to month. What I take away from it though is the fact that I remain within the 60% to 70% band during most months, which is most important to me.
For the entire year I managed to save 67.3% on average. As you know, that’s under my 70% goal. However, I don’t mind one bit. Had I not purchased a new road bike I would have landed on 72.6%. All things considered an excellent result for 2015!
For next year I expect to make the 70% mark without too much hassle. Strong income, helped by increased dividend payments for example, and lowered expenses should get me there no problem. Even if things don’t go exactly my way, 2015’s numbers have shown that I have a small margin of safety to play with.
How were your December savings? Hit your goals? And what about your average savings rate for the entire year?