Mid-Year Savings Update

The SFF household has been busy so this post is slightly delayed but we finally had a chance to sit down and review our total income/expense numbers for the first half of the year.  I have been anxiously awaiting this info as we keep our individual income and expense money separate so I was a little in the dark as to how we were doing as a couple.  But I am happy to report that we have increased our savings rate from last year!

In 2015 we saved 28% of our joint net income.  This was a little lower than I had wanted but we have both made an effort to decrease our spending even more and Mr. SFF has been transferring money to our joint accounts more consistently resulting in a higher savings rate.  Based on my calculations we have saved approximately 46% of our net income so far this year.  Woohoo!  I am pretty psyched about this as it is a drastic increase from last year and we both still have buffers of extra money in our individual accounts which is not included in this number.

My own personal net savings rate is actually only a tick above where it was last year but this is due to a shift in who is purchasing the food.  Even though our total food costs have decreased a larger percentage of the costs are actually coming from my paycheck.  So even though I have made some progress in other areas the increase of the food costs brings my total savings rate to about the same place.  This is a little discouraging to me which is why I am really happy to finally see our total numbers and see that as a couple we are actually doing really well.

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What contributed to this substantial increase overall in our savings rate?  First of all, as of mid January we have a new investment property.  Through the end of June we have netted an amount of $4,407.71 from this property, which considering one tenant still hasn’t paid us June’s rent is pretty darn good.  We have a cash buffer set aside to cover any large expenses or emergencies so this entire amount was saved.

Secondly is our food costs, which if you are a regular reader you would know this was (still is?) our weak point.  Last year we spent $3,471.09 dining out alone which was a decrease from the previous year but still way more than what we should be spending eating out.  Due to our weekly meal planning we have drastically reduced our dining out costs to only $635.42.  And as I mentioned in my last food update a large portion of this was actually from one weekend away so I am very happy with this improvement!

And third, as we are seeing the progress in our investment accounts and my calculations of how this dream could become a reality in 3-5 years, we have been better at reducing extraneous expenses.  I have made a goal to not spend any money on clothing for the year and only purchase essentials for the home and I know that Mr. SFF’s general spending has gone down as well.  It’s amazing how motivating it can be when you can see the light at the end of the tunnel.

The Expense Side of Things

When I total up our joint expenses the number is actually a little higher than I want to see.  I have been basing our FIRE calculations on where I think our estimated expenses will be but if I were to annualize our current spending to date we are slightly over this number.  Now this could be due to a couple of bigger things.  In January when we purchased the new investment property we switched over all of our insurance coverage to another carrier.  I always pay our insurance coverage in full to get the discounted rate so this expense is certainly front loaded in the beginning of the year.  Mr. SFF also purchased our ski passes for the 2016-2017 ski year before Memorial Day.  Yes, it may seem strange to purchase a ski pass when summer hasn’t even started but we are able to get the previous year’s early season price if we buy early.  My hope is that by the end of the year these expense will have equalized a little so that our total expenditures is actually closer to my goal.  But if this higher number is a reality we will certainly need to take this into consideration as I don’t want to feel “broke” when we leave our full time jobs by really constraining our expenses.  

Overall though, I am happy with how things are going.  We are still living a comfortable lifestyle and do not feel like we are lacking much.  And to be honest, I really like seeing our savings and investments increase over time.  I know market fluctuation can make a big difference (in either direction) but it makes me feel good that we are consistently adding money and growing this number further.  I love this journey towards financial independence and can’t wait for the freedom it will bring!

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