Photo taken June 2016. I took this photo on a walk one evening. The light from the sunset was playing on the clouds in the sky.
This is the second spending rate article of the year. As you may recall, our 2016 goal is a 35% savings rate, mainly because we did not hit our goal last year and the fact that we now have a mortgage payment. Below, you will find the spending rate for April 2016.
The image above shows our 2016 April spending rate, which shows most of our spending going towards Savings and Household expenses. Below is the percentage breakdown of the spending rate:
- Savings: 30% (includes principal from mortgage)
- Household: 18% (purchased a TV stand and paid for some repairs)
- Tax Payment: 9%
- Donations: 9%
- Groceries: 7%
- Auto: 4% (Tolls and Gas)
- Utilities: 4%
- Other: 20%
Once again, we had a tax bill at the end of the year. This year we filled our taxes in April and that took 9% of our income. Without this tax payment, I believe that we would have met our 35% savings goal. Even with 9% being spent on taxes, we were still able to save 30% of our income. As you will notice, we did not have a mortgage payment in April. This was because we made an extra mortgage payment in February, because of a windfall. I knew that we would have a tax payment coming up and some household expenses coming up. We thought it would be good to get ahead, so that we could skip a payment one month if we wanted. Even though we skipped the full mortgage payment, we still made a principal only payment in April as a way to try to pay down our house faster. Next, let's look at the May 2016 spending chart.
The image above shows our 2016 May spending rate, which shows most of our spending going towards Savings and Donations expenses. Below is the percentage breakdown of the spending rate:
- Savings: 28% (includes principal from mortgage)
- Donations: 16% (Our normal donation did not go thru in February, so we paid extra in May)
- Mortgage: 12%
- Groceries: 10%
- Utilities: 6%
- Entertainment: 5% (Season Tickets for Football)
- Dining: 4% (We ate out more than we should)
- Other: 19%
So, we have not met our savings goal for three months in a row. This disappoints me, but the lower savings rates can be explained by the fact that we donated a little extra this month and spent some money on season tickets. I am also disappointed in the high spending in Groceries and Dining. We spent more than our monthly average on these categories and we need to get that back under control. We seemed to get lazy towards the end of the school year and ended up spending too much money on food and dining out. With some minor changes to food spending and less donations, I think that we could hit our goal next month. Let's see how we did in June.
The image above shows our 2016 June spending rate, which shows most of our spending going towards Savings and Donations expenses. Below is the percentage breakdown of the spending rate:
- Savings: 26% (includes principal payment from mortgage)
- Mortgage: 11% (includes Taxes and Interest)
- Household: 10% (some minor repairs and purchased some items for the house)
- Donations: 8% (too low, we push for 10%)
- Groceries: 7%
- Medical: 7% (Monthly Appointments now due to the fact that my wife is pregnant)
- Auto: 5% (Gas, Tolls, Oil Changes and Inspections)
- Other: 27%
We now have a 4 month streak of not hitting our savings goal. This disappoints me, but the lower savings rates can be explained by the fact that we spent more on the house this month and the added medical expenses. So, let's look at how we fare when you look at the overall picture of 2016.
The year started of positively with a 41% savings rate, but it has declined to 35%. This is right on track with our savings goal, but we can't have anymore below 35%. Below, you will find the 2016 current spending rate and how it compares to the first 3 months of the year.
- Savings: 35% - Decreased 6% from March
- Mortgage: 11% - Decreased 2% from March
- Donations: 8% - Increased 2% from March
- Household: 7% - Increased 7% from March
- Auto: 7% - Decreased 3% from March
- Groceries: 6% - Increased 1% from March
- Utilities: 4% - Not Listed in March
- Vacation/Travel 3% - Decreased 2% from March
Lastly, I want to compare the 2016 savings rate to the 2014 and 2015 savings rate..
2014 Savings Rate: 29%
2015 Savings Rate: 40%
Current 2016 Savings Rate: 35% (decreased 6% from March)
We are currently on pace to meet our 2016 Savings Goal. We need to be more diligent the next couple of moths and make sure that we decrease some expenses. Even with a mortgage, we are still ahead of our 2014 Savings Rate. Have you set your own goal for savings yet? How is it going?