Author: Mr. and Mrs. DDU.
Perhaps the most important factor in how quickly you can achieve financial independence and retire early is how much you can save. The difference between $30,000 and $40,000 in annual savings can snowball significantly over a decade.
We’re not trying to save every last cent we can. We want to enjoy life and experiences now, not just when we get to FIRE. But at the same time, we recognize that living a simpler life means saving more. It also means that we don’t have to accumulate so much wealth to provide the lifestyle we want to live off of investment income alone.
We are currently aiming to save about 50% to 60% of our net income.
Most of the money we are saving is split between home funds and investments.
Savings Update August 2022
Dividend Income: $10.29
Recurring Income: $8,267
AdSense Income: $0.00
Total Income: $8,277
Cost: $5,603
Savings rate: $2,674
Savings rate: 32.3%
Here is the graph:
invested in total $2,000 Investing in savings stocks (not including dividend reinvestment plans).Added $0 Put some of this month’s savings into a home savings account and the rest into an emergency fund.
Here are the changes from last year:
August 2021 rate: 61.5%
Rate in August 2022: 32.3%
No improvement: 29.2%
Savings for August 2021: $7,286
Savings for August 2022: $2,674
No improvement: $4,612
income
dividend income – Received $10.29 in August.Dividend target virtually nothing at our expense.
recurring income – For reference, this is after-tax figures. This is our income plus the bank interest we received. This amount also includes government payments that we currently receive as we have very little DDU in our lives. Our superannuation (what we pay for our personal retirement – like 401k in the US and NEST in the UK) contributions are not included in income or savings rates, Useful for long term wealth.
google adsense – As the name suggests, when Google pays for ads on your blog. I received my payment in November 2021. Thank you for reading my blog and turning on the light.
expenses
Here are the non-recurring expenses that occurred this month.
Pet end-of-life costs – Our beloved family cat sadly passed away in August after living many months longer than the vet’s initial prognosis. He died early, but we found comfort in the fact that he no longer suffered.
car lego – I had to pay the annual car registration fee in August, which totaled about $800.
savings table
Below are two savings tables since I started blogging, showing % Savings Rate and Savings Rate in $ units.
final thoughts
We aim to save half of our income each month at this stage of life, but unfortunately we didn’t achieve it this month. The last few weeks of our cat’s life have been a difficult time. My expenses have increased and my income has decreased. I’m glad I was able to focus on those lovely final moments with him. I think it’s important to prioritize the current life over savings because it’s such an era.
The three key ingredients for us to get rich are:
- how much you earn
- How much of your earnings will you save
- How well you can make your savings/investments work
These monthly savings posts track how well the first two factors work.
What happened to August’s savings?
Thank you for reading this article. Forward, upward!