Tag: savings rate

It is once more time for an overview of my expenses and savings of the last month.

As mentioned before: no investment gains are taken into account and our monthly mortgage payments (which are by far our highest expense) are viewed as an expense.

Personal account:

Income: 2 094,62

Expenses : 1 670,05

Savings: 424,57 or 20,27%

The month was off to a bad start with a 35 euro parking ticket. This was my most stupid expense by far as it was perfectly avoidable (free parking for 2 hours if I had just put the little blue disk out) but just shows not to be in a hurry.

The yearly carnival in my hometown of Aalst also cost me around 140 euro. But I had a fun time, so I consider this money well spend.

Anyway, these two items explain the expenses above 1 500 euro. The ultimate goal of keeping a budget for me is to see if indeed I can live on 1 500 euro a month. If we look at what we saved on the joint bank account this goal was once again achieved. Any savings will eventually be reinvested in home renovations. I am counting on special circumstance investing and rising stock prices to grow my stash.

The results of the joint bank account

Income: 2 344 (1 100 euro each and some meal tickets)

Expenses: 1 886,63

Savings: 457,37

Adding this half to my savings amount and my savings rate for the month of February was 31,2%.

Gas for the car seems to hover stable around the 150 euro mark. Hoping for not too much rain in March so we can use our bikes more and try to push this bill a bit lower.

Groceries were 345 euro which is not bad for a 2 person family. The girlfriend can now eat for free at her work. This depends on which work hours she has to work so this is unfortunately not all days. I have started my diet again so for the next couple of weeks our grocery bill should be even lower!

I did get lucky as a big Visa bill will be landing in March. Extra luck: we will also get a big tax return in march so we will keep a positive savings rate!

A bit late as we are already 7 February but illness (there is currently a flu epidemic in Belgium) had me off the computer for most of last week. As the misses can attest, a very rare occurrence! Circumstances must really be dire to pry me away from the holy LED screen!

Even worse, it had me miss the second Belgian Dutch meet up!

On friday I had high hopes to be well enough to make it. But saturday had me waking up with a headache for the fifth day in a row and a throat that felt like a hedgehog had take up permanent residence down there. Waking up around 8 I lay in bed have an internal debate about just rolling over and be sick or actually drag myself out of bed, under the shower (most definitely needed a shower) and then off to Antwerp. But then I coughed something up that will be starring in the upcoming remake of the 1988’s classic ‘The blob’ and decided to not expose my fellow financial travelers to these horrors from the deep ….

How I felt for most of last week

But anyway, on to the expense report of January!

As mentioned in December, these are without any investment gains taken into account. Principal payments on the mortgage are also viewed as an expense. Once paid off this will off course have the huge benefit of living mortgage/rent free but as this is something that will only happen after I am financially free I do not take it into account.

Personal account:

Income: 2 134,09

Expenses: 1 524,93

Savings: 609,16 or 28,5%

Significantly lower than last month but there were a few exceptional expenses:

-hosting costs for this site (113 euro) have been paid for the full year. As I paid with Visa the bill landed this month

-doctor visit and medication: 45 euro. I will get some money back from the doctor visit, and I actually found a few older certificates I never bothered to give to my health insurer so next month I should have a nice amount back.

-too much snacks at work (50 euro!) especially bad as I really should lose weight

The results of the joint bank account are:

Income: 2 326 (1 100 euro each and some meal tickets)

Expenses: 2 019,49

Savings: 306,51 euro. Adding this half to my savings amount and my savings rate for the month of January was 35,7%. I think this still ok for a month in which I fell sick and we bought a 500 euro chest freezer.

Groceries were 420 euro but we did start to stock up a little bit in the chest freezer and car expenses 146 euro. No repair bill just all gas.

Taken into account the savings on the joint account my budget for January was again under 1.500 euro which is the main reason for me to be running a budget.

2017 will be interesting and challenging in many respects. With a stash at 240.000 euro I know that will take care of itself (well a little bit of effort here and there). What I need to do is not touch it for a few more years and in the mean time get the house renovations finished and lay the ground work for the second half of my life. I will be prioritizing this above generating income so I fully expect this savings rate to drop even more.

As mentioned previously, achieving financial freedom is not all that hard. Keep your expenses low, work, save a lot, invest wisely and then after X number of years: Boom! You have enough investments to retire on!

It really is THAT simple.

If you have bothered to click the link you will get a nice graph that shows you how long you need to do this. It is pretty compelling stuff. The only thing I do not agree with is the assumption of a 5% market return. This should be higher in my opinion but since he is more of an index investor and beating the index, although possible as a retail investor, does takes work.

This approach also means keeping track of your income and expenses and trying to get that savings rate as high as possible. Being lazy, I never really budgeted. If I would make a wild guess, based on my savings, I would guess I have save around 35% to 40% of my income over the years. According to his graph it would then take me about 22 years to achieve financial freedom. Add in a return that is on average a bit higher than his assumption of 5% and that would put me on track for financial freedom after 20 years of working. More or less what I am aiming for! As I said before, it really is not all that difficult (I mean, if I can figure it out …).

Since I am approaching the final years of stash building a more detailed view on my expenses is necessary. When choosing early retirement, ‘guessing’ is better replaced by: ‘knowing for damn sure’.

Hence the monthly expense report.

Without shame I ‘borrowed’ No more waffles budget sheet.

It only needed a few tweaks to also work in google sheets so now I can immediately fill in every expense I make via my smartphone (because remembering to do it later is hard!). December is a bit of a base line, although naturally frugal I never really did a disciplined effort in tracking my expenses and trying to lower them. During 2017 I will be making this effort and sharing the results with you guys. I am genuinely curious what the result will be off this more focused approach.

I will only be looking at income from work (all investment gains are excluded).

Personal account:

Income: 2 092,86

Expenses: 1 339,40

Savings: 753,46 or 36%

But the biggest part of my expenses is the 1 100 euro we each contribute to our joint bank account. This money is used to pay for the mortgage, utilities, grocery shopping and such.

The 240 euro above that is what I spend on buying food personally (which actually equals snacking at work. Bad, bad! Especially since I really need to lose some weight.), my personal cell phone bill (which was 16 euro last month) and some random fun items (it was December after all).

The main savings will be made in the joint account (since the main expenses happen there). But no more snacking and cutting my own hair should be able to shave another 60 euro of my personal spending.

The results of the joint bank account are:

Income: 2 299 (1 100 euro each and some meal tickets)

Expenses: 1 729,49

Savings 569,51 euro, half of which would be mine. Adding this half to my savings amount and my savings rate for the month of December was 49,6%. I am pretty pleased by this.

Biggest expenses in the joint account are:

– mortgage: 935 euro (at 2.7% fixed rate not a lot can be done to improve this at the moment, we

already refinanced this down from a 3,6% rate in 2016)

-groceries: 381 euro (we should be able to lower this by shopping more at the Lidl and Aldi)

– car: 142 euro (we didn’t spend that much on gas but did have a small repair bill of 50 euro)

– gas & electric: 219 euro

– internet and television: 44 euro

December was a pretty frugal month (although we did go to the cinema together). But since it was the first time we were closely tracking our expenses it actually felt like we were spending a lot!

Here is hoping for another frugal January!