At the end of the month it is always good to look back and to see how you have been doing on the savings rate objective. I think it is a good habit if you are serious about financial independence. Especially if you are a late starter like me and quite new to the concept. By putting it out here, I hope to help others on their journey, but above all, it helps to hold me accountable towards my goals.
In May I ran a small experiment. At the start of the month, I have set aside approximately 5pct of our monthly budget. I wondered if we really needed. It turns out that this month we didn’t. Nice… I will repeat the experiment next month. Lets see what happens. This extra money is not counted as a saving, as it just rolls over from one month to the other. This principle is one that I use frequently. It think it is worth to document it once. Hopefully I have the time in July to do so.
So, lets jump into the numbers
We managed to save 55pct of our income. As you can see, tnis is right on target compared to the year goal. This is nice.
After some reflection on how to calculate the savings rate, I now also report another number. I am actually experimenting with a new definition of the savingsrate. I only count the savings that actually go into our investment account. So, what is the big difference here? That is clearly the mortgage and the build up in our future health insurance plan.
Is this better?
From a number perspectives it is not good. We drop from 55pct to 30pct. Let’s be clear, 30 pct is still above the Belgian average saving. I do think that this representation is better as it it now aligned with the progress that our F-money will make.
amber tree leaves 
Great savings for the month and year Amber Tree. At this rate you’ll be making some fantastic financial progress, even if you do consider yourself a bit of a ‘late starter’ (although I think you’re far from it, and it’s never too late!). I also use the same definition of savings rate, and only consider what goes into investments.
Would be interesting to hear more about your rollover strategy. Keep up the good work!
Cheers,
Jason
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Hey Jason,
My roll over strategy means that I have a fixed monthly budget for expenses that goes onto our current account for that month. If at the end of the month, not all is spend, then it stays on the account rather than going into investments.
I use this approach to avoid a lot of back and forth with the emergency fund. It also avoids that at the end of a month, we need to cut back due to big kids expenses or others. The amount of money is tracked, so I know what money is roll over.
If the roll over gets too big, then it goes into investments funds.
AT
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That is a great savings rate to start with! 30% is not shabby, probably no matter what country you live in. And, I think over time as you keep working on your goals, you will find that you just end up saving more and more – that is what happened for us… we just got in a ‘savers’ mindset instead of a ‘spenders’ mindset
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Great news that you are savers now, and not spenders. I guess we are in between.
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No matter how you look at it you have a great savings rate. In the U.S. most people have zero or strive for a 10% rate. The online financial community laughs at those numbers and seek 40%, 50% or more savings which is great. Thanks for sharing.
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Thx for the support. Anything above 25 pct is indeed great
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30% savings rate is still something to be very proud of. Some people can’t even manage to save 5% of their income. Keep up the good work and see if you can further optimize your expenses to increase your monthly savings rate.
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Over the next months, We will start to have a batter view on the real budget we need every month and where there is potentially some room for improvement. Also, there is a lump sum payment on the mortgage soon. this should add some percents as well
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Nice work here Autumn! Hopefully this will continue as I continue to read through your articles..
Thanks for sharing and onwards and upwards 🙂
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