It’s time for the first three paycheck month! These don’t always happen in the same month for me so they’re a nice surprise when they do! A three paycheck month is almost always a guaranteed savings rate bonanza. That’s because my expenses stay the same but I suddenly have more income!
Last year’s three paycheck months were both above 50%. That’s despite the fact that November was my honeymoon month so expenses were rather high then too! That means good things for this year and might mean I hit 50% in four months out of five to start the year. That’d be pretty awesome to see!
On the dividend front, things look good too. Apple bumped up their dividend yet again which means good things for my small individual holding of Apple. It was only a 5% bump but I won’t complain as long as it’s above 0%. I’ve continued funneling money into my M1 Finance account as well and that means good things for these historically smaller months. Most of my holdings are in mutual funds and ETFs but owning a variety of individual stocks via M1 means I’m getting more payments in these non quarter ending months. The amount of money in that account is still small but it’s growing every month.
Dividend growth this year has been awesome. Through April, I was up 39.6% YTD so I’m eager to see that continue in May.
Last year’s May came in at $175.73 so let’s see where we are now.
May clocks in with $251.28, a 43.16% boost over last year. It’s not quite the 123% growth I saw last month but still pretty damn good. At this point in 2018, the cash and bond yields had risen which means the numbers get more comparable than they were last month.
I’m really excited seeing these growth rates as even these smaller months are becoming a big deal. $251 is nothing to sneeze at and I’m hopeful I can hit $200+ each month going forward. That’d be an awesome amount to reinvest every month and take advantage of the compound growth.
This $251.58 reinvested will boost my forward in come by $5.79 annually. It’s not a ton but every bit helps when it comes to investing.
May brings the yearly total to $2941.52 and I’m 39.89% ahead of where I was at this time last year.
Steve, my dividend employee earned himself $1.51/hr this month. That brings his yearly hourly wage to $3.53. The good news for Steve is that his best months are still ahead of him and that includes June which is right on our doorsteps.
You can see that in the graph as the three biggest months are still to come so things are looking good for Steve to see a big boost in his hourly wage.
June is a big one for sure but we’ve still got September and the big guy himself, December before the year is over. I’m sure these bigger months won’t see such huge percentage increases but I’m eager to see what I collect in June. I’ve certainly got a good start on my financial goals for the year and am well ahead of where I expected to be at this time of the year and I hope June continues a trend of growth.
I’m sure this months three paycheck month meant my savings rate was solid and that should mean good things for future dividend updates. After all, investing more money means more dividends and more future growth potential!
May Total : $251.58
2019 Total : $2941.52
Portfolio monthly hourly wage : $1.51/hr
Portfolio annual hourly wage : $3.53/hr
Three Paycheck Month Savings Rate and Expenses
Last year’s May wasn’t a three paycheck month so the 30.99% savings rate I achieved there isn’t a good comparison. June 2018 with it’s 54.3% savings rate and three paychecks works better.
Let’s see where my three paychecks went this May.
My savings rate came in at an awesome 63.51% in May. That’s the biggest month I’ve ever had outside of bonus months! That’s pretty neat.
Adding in employer contributions boosts that number to 70.51%.
On a gross income basis(including taxes), my savings rate was 48.62% and 53.98% after employer contributions.
That’s about as good a month as I could have asked for even if it’s a three paycheck month. The reality is that anytime I can hit 50%+, I’m doing great and I smoked it this month.
Right now, 2019 is the best savings year I’ve ever had. That’s a combination of a variety of factors but is mostly driven by lower expenses. Last year, I got married and had a honeymoon which was a killer on the expense side. On top of that, I had a car payment for the majority of the year.
However, now that’s gone freeing up a solid chunk of cash each month and we have no major plans that even come close to the cost of a honeymoon or a wedding.
You can see the results of that on this yearly chart.
Four out of the five months to start the year have been above 50% when it comes to savings rate. Last year, I had five that hit that mark total and that was a record so I’m on a good pace to really break that in 2019.
Beyond managing expenses, I’m also making slightly more this year at my job which certainly helps but my spend this year is 6% lower than it was last year at this time. The best part about that is that the majority of my wedding and honeymoon expenses came towards the latter part of the year(see negative months in August and September).
That means I’ve still got some good months ahead of me. 2019 is really shaping up to be a banner year. There’s also another three paycheck month ahead for me which likely means good things.
We thought there might be some expenses coming soon via the purchase of a home BUT that unfortunately fell through. We had a verbal agreement but the seller pulled out on us at the last minute for some reason.
That means it’s likely another year of apartment living for us.
On the expense side this month, it’s the usual suspects.
Rent and health insurance take the top two spots. Now that I’m married, the wife is on my plan and the costs skyrocketed for me against last year. As a reminder, this blog only tracks my income and expenses so far as our financials are still separate. I’m not sure when and if I’ll combine those yet.
I sort of like just having financials on my own and basing my projections off that while having my wife’s savings as a safety net.
Health expenses are up there as well due to a little root canal situation I had going on earlier in the year. Insurance covered a good portion of it but I still had to cover about 1/3rd of the cost. Thankfully it wasn’t a molar as regular teeth are much cheaper when it comes to root canals.
I also spent a bit of cash on this blog paying some hosting fees and renewing subscriptions for a few things I use.
I’m pretty damn happy with where this month ended up. A 60%+ savings rate means a lot of money flowing into the market and more dividends in the future. That’s the beauty of a three paycheck month.
You can’t really complain about those!
Disclosure : Long APPL