My savings rate and expenses – June update

May was pretty mediocre when it came to my savings rate. I was expecting June to put me back on the right track as it was a three paycheck month but that didn’t quite work out for me.

Getting married is expensive. I have a separate post around the cost of engagement rings and marriage that I’ll eventually get around to writing but my recent engagement really sent the savings rate for this month into a tailspin.

June’s expenses ended up being nearly double my average monthly expenses which naturally won’t do great things for a savings rate.

It was all money well spent though as my fiancee and I found a beautiful engagement ring that she loved and ordered it and put down the first payment for a quaint little wedding venue that we both loved.

We’ve also been house hunting pretty aggressively these last few weeks and have an offer out on a house right now after missing out on our first offer. That means I had additional savings flowing into a future down payment expense that I know is coming in the near term(within the next 12 months at least).

All in all, this three month paycheck month wasn’t quite what I expected it to be but it was due to a lot of one time expenses that I’m not too concerned about and see as valuable.

Let’s take a look at the gross income breakdown for June. Continue reading “My savings rate and expenses – June update”

My savings rate and expenses – May update

Health expenses are really easy to underestimate and I think that’s one of the biggest worries I’ll have whenever I actually make the decision to quit the work force.

It’s not just the insurance premiums that will be a bother but also the deductibles you have to meet before coverage kicks in. Both are sure to rise quite a bit by the time I’m ready to retire and losing those employer contributions towards my premiums will certainly send my healthcare related expenses soaring.

The problem with healthcare expenses is that they’re so difficult to predict. I can tell what my premiums will be for this year and I can tell what my maximum out of pocket expenses will be for the year but predicting actual costs which will likely fall between that premium only and premium + out of pocket max level is a total crap shoot.

I can’t even began to think about where to start figuring out what sort of premiums I’ll be looking at by the time I’m 40+ and whether or not I’ll even be able to get insurance at that point.

The timing of the payments is another question mark as well making it difficult to accurately budget for them on a month to month basis. I had some health care bills in May for doctor visits that happened months ago and my fiancee has some bills still coming in for an accident that happened ages ago.

I’m not sure exactly what I’m trying to say here besides healthcare kinda sucks and is the biggest question mark in early retirement for me.

My main annoyance with healthcare when you have a high deductible plan is that it’s really hard to gauge the actual costs of something when you visit a doctor or have some tests done especially since you often get billed multiple times for one visit. I’ve had situations where I’ve had a test done and gotten three bills for it, the test, the doctor who administered the test and then the reading of the test. I work in insurance and I’m still confused or annoyed by half the stuff that I see on my insurance bill.

I’m lucky enough to have the extra cash to cover my deductibles whenever I need to have something done or when I want to visit a doctor but I feel for those who are struggling to get by and can’t even afford to use their benefits because they have a massive deductible they have to hit.

I guess one positive thing from my perspective about having SOME expenses any given year is that it gives a more realistic picture of what my budget will actually be when I retire. I can easily see a 10k bump in yearly expenses after retirement for a single person if one doesn’t properly account for the premium and deductibles and has some new medical problems. Even now with my medical premiums being partially covered by my employer, I can still be dealing with a 5k bill for premiums and deductibles once the year is done.

The best I can do at this point is max out my HSA, take care of myself and get as prepared as I can be for whatever comes around when I’m ready to quit work. Hopefully my fiancee(wife at that point) will still want to work and I can jump on her insurance plan! It’s always better to get some form of subsidization than pay full boat.

If anything this year made me realize that I probably need to up my expected costs for healthcare quite a bit in my retirement plan.

If you read my last update, you know that April for me was a mediocre savings month as I had some travel costs for my awesome trip to Nasvhille and May is no different but it’s healthcare costs that are the culprit this month! It’s not a surprise as I knew they were coming having visited some doctors in the past few months but the surprise was the actual cost of the trips.

I hadn’t planned on all these medical expenses when I set my goals for the year so I’ll probably be lagging a bit in those areas but it is a good wake up call to have early in the retirement planning years versus realizing it much later when it’s harder to adjust for it.

Let’s take a look at the gross income breakdown for May. Continue reading “My savings rate and expenses – May update”

My savings rate and expenses – March update

March is always a weird month for me as it’s the month I usually get my taxes done. The goal is to shoot for a $0 refund but that’s nearly impossible and sometimes you completely miss the mark due to unknowns like stock sales and bonuses(which get taxed at a much higher rate).

This year, I missed the mark which means I got a decent sized refund this month.
The refund essentially means that my expenses in 2016 were too high and my savings rate was higher that I had calculated it.
Still, it’d be a huge task to go back and recalculate everything there which means I’m left with my second option; to look at it as additional income in 2017 and move on. It’s not the most correct way to do it but it is the easiest and I’m always a fan of that.
I wasn’t expecting March to be the highest of months as I had some known expenses here but the refund certainly changes that expectation.
Let’s take a look at the gross income breakdown for March.

Continue reading “My savings rate and expenses – March update”

My savings rate and expenses – February update

February is generally a pretty good month for my savings rate and this year is no different.

The annual bonus at my company is paid out this year and that generally means that my monthly pay for the month is double what it normally is and most of that money goes into savings.

I bumped up my 401k contributions this month to nearly the max allowed by my company to get an early start on maxing out the 401k and to avoid the high tax load that comes with bonus payments.

That means that February is one of the highest savings rates I’ll see for quite a bit and possibly the entire year.

Let’s take a look at the gross income breakdown for February. Continue reading “My savings rate and expenses – February update”

My savings rate and expenses – January update

I’m excited about 2017 as this is the first year where I’ll have a full year of savings rates and expenses tracked. It’ll be good to see how months compare y/y and how the whole year compares at the end of the year.

I’m hoping for growth overall from 2016 to 2017 and that shouldn’t be too hard since January and February are typically solid savings rate months for me as I front load my 401k contributions a bit and those were missed in 2016.
I generally front load my 401k so that a good % of the overall contributions flow in the first two months(especially February) but don’t max the whole thing. I would like to max out my 401k as early as possible but my employer does not do a true-up for the contributions so I have to make sure to keep contributing enough to get the full match on each paycheck.
I do have some goals set for 2017 that relate to savings rates including hitting a 50% at least three times during the year as well as overall savings rate goals.
I’m not sure January makes great progress on those goals as my expenses were a bit high due to some lag on expenses from Christmas as well as some personal expenses to improve my winter wardrobe and work clothing(awesome winter boots and gloves and some dress shirts).
Let’s take a look at how I did in January. First up is the gross income breakdown.

Continue reading “My savings rate and expenses – January update”