Saving Rate – 2015 catch up

The main driver towards freedom is contribution to your F-money. It is thus vital to follow this on a month-by-month basis. As it is personal finance, I will only report a percentage and not a € amout.

Looking at the first 4 months of the year, we are on track to reach an overall savings rate of 55 pct. We have an average after 4 months of 61 Pct, well above the year target of 55pct. Big thumbs up for my family for this good achievement.

savingrate_aprilSome comments

  • January had some higher expenses due to a school bill, a swimming pool subscription and lawn mower maintenance. None of these are part of the 1/12th saving plan.
  • February and March seem to be regular months, with nothing exciting to report. In this case, dull is good!
  • The April peak is the result of a tax refund. We are a family with kids, a mortgage and pension saving. In Belgium this translates into a significant tax refund. We managed to allocate all of this to savings: either investing or setting aside for an early mortgage pay back.

All in all, this is going according to the plan. yiehaaa

Some after thoughts…. I am not sure that I am completly happy with the way that I define our savings rate. This rate covers also the contribution to our mortgage and the extra contriubution to our extended emergency fund. This does not feel correct as this money does not adds to the F-money at all.

Agreed, it is money that we do not spend, it is money that we save, but it does not bring me any closer to Freedom, or at least, not directly!

  • Paying down the mortage brings freedom closer, in an indirect way. The day we become debt free, we need less money per month to cover our expenses. So, it helps, but I do not see it in my investments. The day that we are debt free, then I will start to see nice contributions to the F-Money. In a certain way, that will be a  double win that day.
  • Emergency contribution is kinda the same. It is money that is set aside and might or might not be used…

I will sleep on it, and maybe review my definition to fit better my end goals.


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