Time in the market savings rate and expenses – October 2017

I’m a big fan of four day weekends and wish they were more common. It’s nice to spend some time with people you don’t see that often and also to have some time to unwind and relax. It’s also as good a time as any to do some analysis on my savings rate for the prior month and see how I did.

That longer break gives me a little taste of what being retired might be like and I quite like that. It’s always good to take a little break and see how bored you get when away from work for an extended period of time.

Yesterday was Black Friday, a day known for shopping and great deals and I spent the entire day locked up at home napping and watching a marathon of The Punisher on Netflix.

I’m not too keen on getting out there and braving the crowds although more and more of that is moving online.

We did do some shopping there as my girlfriend bought a few things that her cousins had on their Christmas list at a big discount. That’s one good thing about Black Friday, it allows you to buy things that you were going to buy anyway at a big discount and that’s always nice. I think a lot of people see the discount and end up buying things they don’t need just because they’re on sale but as long as one is smart about Black Friday, it can be a big boon to long term savings plan. If I was going to buy something anyway, I might as well wait and buy it 40% off.

One of the key things for me in the last few months is trying to hit a savings rate that will help hit my savings rate goals for the year. As I discussed in my Q3 review post, I’m a bit behind on my bronze medal goal for both savings rate metrics and will need a solid October, November and December to remedy that.

The one important thing is that December is a 3 paycheck month which will be a big boost to those goals but I also want to make sure that October and November don’t lag far behind. That post was written at the end of October so it was too late to impact October results but these winter months are generally better than the summer months. That’s largely due to the fact that I spend more time indoors and that leads to less spending since it’s easier to spend money on something like lunch when you’re two hours away from home on a day trip.

Holiday season often means that there’s additional spending and such on gifts but we’re not a huge Christmas family and I only have to get gifts for the children in the family which also helps keep the costs down. The fact that December is a three paycheck month also means good things for December savings rate results. I think that as long as October and November come in near my savings rate goals(~30% for gross income SR and ~40% for savings rate), then I’ll be in a good spot to hit my 2017 annual goals.

With that in mind, let’s take a look at how I did in October. 

On a gross income basis, I saved 28.9% of my income. That’s not bad and a big improvement over the last two months.

The addition of employer contributions brings that number 33.87% which is nice.

The 2017 goal here is 30% so that means I’m slightly below that number without the contributions but that’s still a solid result knowing I didn’t do anything special this month to try to influence that number.

My savings rate for the month clocks in at a solid 39.8%, just a hair shy of the 40% goal I have for the year. Again, that’s a good results since it’s close to my target, moves the overall needle closer to it and gets me ready for the three paycheck December which should generate a very high saving rate.

That’s a big improvement over the 16% I saw in September too!

The rate jumps to 46.69% when I add in employer contributions.

Overall, I’m very pleased with this month as it was all before I analyzed the data and realized I needed to pump up these rookie numbers if I wanted to hit my goal for the year.

Let’s take a look at what drove my expenses this month.

Rent

The biggest expense as usual was rent which made up 28.5% of my expenses this month. This is a split cost with my fiancee as I pay about 55% of the rent and she covers the rest based on our income split.

Car

The car is my second highest expense this month and includes the car payment and also some maintenance work I had done on the vehicle. I think one of my goals next year will be to pay off the car loan by the end of the year which should free up a good deal of cash flow going forward.

Health

Health was #3 as I had some doctor’s appointments that got billed this month. I expect this to be a regular cost going forward as I have some tests that are being done next month which may impact December or 2018 depending on when those get billed.

Restaurants

Eating out was the #4 expense this month and included a family dinner that introduced my side of the family to my fiancee’s side of the family. It was important to us to have our families meet long before our wedding(we all live a few hours away so it was a meet in the middle kind of thing) and I wanted to pay for the whole thing. It wasn’t anything but fancy but eating out for a group of ten adds up easily. We also went out a few times with some friends this month as well which added to the cost.

Pets

I had to pick up a yearly supply of some of the pills my dog takes monthly. That includes the heart worm preventive as well as the tick and flea preventive. We actually switched from the liquid flea preventive to a pill which is a bit more expensive but a lot easier to administer and more effective. I also started giving my dog some teeth treats on the recommendation of our vet that do a good job of keeping her breath fresh and her teeth clean.

It’s really impressive how expensive pets can be especially once they get a bit older and start having some problems that require some additional expenses. My girlfriend actually had our dog’s teeth cleaned on her dime and that cost a pretty penny as well which isn’t reflected in my expenses.

Other

The top 5 categories make up almost 82% of my overall spend and the rest of the items are the typical monthly expenses. My grocery bill is quite low this month mainly because of my american express rewards cash back which I attach to my groceries for an expense standpoint. It makes the monthly result look better but on an annual basis, it evens out.

Overall, this was a solid month with a savings rate right near the target for the year. I expect more of the same in November although it might be a bit better due to some of these one time expenses(pets and health) being less high in November.

I think as long as December delivers solid results and November is around this range, I’m on pace to hit my 2017 goals which is nice to see. I’ve tried a bit more in November to avoid certain expenses although I haven’t gone out of my way to be completely cheap and will still likely fall in a similar range as October.

Thanks for reading and let me know how you did in October.