Quarterly Newsletter (Q2 2019)

[Editor’s Note: This is an independent post written by Jack. This post discusses our savings rate and expenditures for Quarter 2 (April – June) of 2019. This post may contain affiliate links. Please read our disclosure for more info.]

One of our major goals for 2019 (discussed in our Written Financial Plan) is to save at least 40% of our gross income for the year. We barely hit that goal during Quarter 1, but we are really excited to have met our savings goal this quarter (46.37%)! We find tracking our spending/savings to be very useful and would encourage anyone to do the same! We use Mint, but Personal Capital is another popular (free) online tool that can track and categorize your spending if you don’t feel like tracking it all yourself. 

Remember that are a number of ways to calculate your savings rate (%). Regardless of the method you choose, it is important that you remain consistent and also understand how others calculate their savings rate so you can compare apples to apples. We calculate ours by dividing our savings by our gross income (+ employer retirement contributions). Our savings calculation:

  • Includes:
    • EmployER Retirement Contributions
    • EmployEE Retirement Contributions
    • Money NOT spent (labeled as “Other Savings”).
  • Does NOT Include:
    • Mandatory Deductions (federal/state tax witholdings)
    • Optional Deductions (insurance)
    • Expenditures

Click HERE to view a copy of the spreadsheet we use to calculate our savings rate. Feel free to make a copy of it and use/edit it to meet your needs.

Major Expenditures:

  • House = $2400
    • Washer/Dryer – $2080
  • Rent (for previous apartment) = $2318
  • Food/Dining = $2382
    • Groceries – $1409
    • Restaurants/Bars – $863
  • Travel – $2367
  • Health & Fitness – $1179
    • Annual Family Indoor Climbing Membership – $1000
  • Auto = $897
    • Auto Insurance (6 Months x 2 cars) – $530
    • Fuel – $367
  • Business Expenses (not related to website) – $2864
    • Most of these are actually related to my wife’s military/physician stuff and will actually be reimbursed (which would technically decrease our expenditures and increase our savings rate), but we haven’t received the reimbursement yet, so it didn’t right feel ignoring these for the time being.

Notice ~38% of that is AUTOMATICALLY directed to retirement accounts every paycheck (TSP, 401a, 401k, 457b), which is not only convenient, but also keeps us moving forward towards our goal fairly passively. We had two large personal expenditures included a washer/dryer for our new home and an annual indoor climbing gym membership (one time fee for the whole year). Our traveling included a week in Charlotte, NC where we stayed at a Marriott for 5 nights completely free using credit card points. We spent more on food this quarter than last, so that is an area we should be more conscientious of. 

In Other News:

My wife and I recently bought a home! We followed our Written Financial Plan by using a 15-year mortgage for less than 2x our gross income and will be making extra principal payments monthly.

We also decided to make some adjustments to risk/asset allocation:

OLD (80/20):

  • 55% US Stocks (40% Large-Caps & 15% Small-Caps)
  • 20% INTL Stocks
  • 5% REITs
  • 20% bonds/cash

NEW (85/15):

  • 55% US Stocks (40% Large-Caps & 15% Small-Caps)
  • 20% INTL Stocks
  • 10% REITs
  • 15% bonds/cash

So we are still using a 5-fund portfolio, but since our investment horizon is pretty long (10+ years), we felt comfortable going slightly more aggressive. We decided to increase our REITs by 5% (Real-Estate Investment Trusts) allocation since they have a lower correlation with US Stocks.

I’m excited to see what our savings rate looks

What is your savings rate looking like so far this year? What are your major expenditures? Do you find true value in them? If not, what steps can you take to reduce your spending in those categories? Comment below!

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