Saving for the future: February 2017

By | March 8, 2017

We are big believers in living below our means; spending less than we earn. We try to only spend money on what is essential or makes us happy. Nearly everything society spends money is fleeting: food, holidays, a movie ticket etc. Most of it is forgotten about by the next day and we look to the next thing to keep us entertained.

Every month we track our income and expenses to see how much we’ve saved/not spent. This helps us to see how we’re going, as well as motivate us to continue saving. Hopefully over time, our savings rate will increase allowing us to invest even more.

We want to show that even on a modest income, it is possible to save hard, invest and become financially independent. We post any articles about our money savings choices or habits here.

 

February 2017 Savings Update

Dividend Income: $0

Regular Income: $6,004

Blog Income: $0

Total Income: $6,004

Expenses: $2,974

Savings Rate: $3,030

Savings Percentage: 50.5%

During February we invested a total of $2,254 of our savings into shares.

Savings rate including Superannuation: 50.5%

(We count superannuation savings when a payment is actually made, usually every 3 months).

We are loving the trend over the last few months. Let’s compare to last year:

Feb 2016 rate: 38.7%

Feb 2017 rate: 50.5%

Improvement: 11.8%

We crossed the 50% mark again! Yay. The only other time we’ve reached 50% was a month where there were 3 of Tristan’s pay periods, not just the usual 2 like this month was.

The percentage change isn’t a huge jump, but in dollar terms it was a big change. In February 2016 we saved $1,315 and in February 2017 we saved $3,030, so we more than doubled the amount of money saved.

Our money will be a balance between saving for FIRE & saving for future things (like a house, second IVF baby) versus enjoying our life in the moment. We think a monthly savings rate between 40%-60% at this stage is a good level to be aiming for.

Income

Dividend income – Nothing in February. Hopefully our final dry month ever.

Regular income – This is the after-tax figure if you’re wondering. We’re very happy with this figure and we’ll be receiving around this amount each month and more when there are three payments for Tristan (he is paid fortnightly, so 2 months of the year have 3 payments).

Blog income – We didn’t receive any payments this month (it has to be over $100 for Google to send you a payment). But the blog did generate $59.62 during February! Which means we’re now sitting on $157.24 and that should be paid out during this month. Thanks so much for reading and helping with this.

Expenses

Non-regular expenses that happened this month:

Office 365 – We decided to make the plunge and get the Office 365 for an annual cost of $119. It’s a great product for people working on various devices at various places. We got the ‘Home’ package which is 5 computers, 5 tablets and 5 phones. It’s really helping both of us with our work and studying.

Valentine’s Day – We are a little bit of hopeless romantics, particularly Tristan. We didn’t do anything crazy, but we got each other a few sweet treats and went out to dinner and didn’t hold back on what we wanted to get. It’s things like this where we’re making sure we are enjoying today and saving for the future.

 

Final thoughts

We’re loving how our finances are really improved compared to last year. With $2,250 invested during February we’re really taking our portfolio on a ride upwards – our post on what shares we bought in February will be coming very soon.

 

The 3 key factors for us to become wealthy are:

  • How much we earn
  • How much of our earnings we save
  • How hard we can make our savings/investments work

These monthly savings posts will track how good we’re doing with the first 2 factors.

 

What were your February finances like?

 

Thanks for reading this article about our financial journey Down Under.

Onwards and upwards!

23 thoughts on “Saving for the future: February 2017

  1. Buy, Hold Long

    Fantastic month for you. Over 50% savings rate, invested 2k and managed to get over 50 bucks for the blog. Winning!
    March should be great as there should be 3 pay periods for you too? All the best.

    Reply
    1. Dividends Down Under Post author

      It was indeed a good month! March won’t be a 3 pay period month unfortunately, the next one is in May I believe. Even without 3 pay periods March will still be a good month 🙂

      Reply
  2. Amanda @ centsiblyrich

    Congrats on the savings rate! 🙂 This is the first year we are on a pay schedule to get the extra pay periods. We don’t have 3 pay periods in one month until June, but I’m looking forward to it!

    Reply
  3. SMM

    Great job on the success in February. With the blog income rolling in the next month, you’ll have another item to add which is awesome. For Vday, we also went out to dinner and went out to dinner a couple days before too because my wife’s birthday is on 2/12, and I made the almost fatal mistake of combining the two holidays a few years back! So what type of things do you guys spend on that makes you happy for more than the next day?

    Reply
    1. Dividends Down Under Post author

      Haha “fatal mistake of combining the two holidays” – I’m glad to hear you’ve not done that! Sounds like you two would have had a great few days going out to dinner twice.

      Interesting question about what we spend money on that makes us happy for more than the next day – I would say it’s more that try to avoid the traps of fleeting spending, but we still do things like that from time to time (going to the movies, out to dinner – fleeting experiences). Not denying ourselves when there’s a movie we REALLY want to see, making sure we celebrate the days that are important to us (anniversaries, birthdays, valentines day), it’s important to make those memories too. All about balance I guess!

      Even buying things like clothing (which lasts longer than just the next day) can become excessive and lose it’s enjoyment/purpose if you buy too much or too often.

      Reply
  4. David

    Good effort. How are you going for possible tax return refunds? Saving your receipts?
    .

    Reply
    1. Dividends Down Under Post author

      Hi David, thanks for stopping by our blog 🙂

      We are definitely keeping track of our expenses (especially blog ones), it’s equally important for us to keep a track of our income because of our added income streams (dividends, if we have sold any stocks to include capital gains, etc). It’s very important to us to be organised and extra so when it comes to our finances – we want to “cross all our T’s and dot all of our I’s” when it comes to taxes!

      Reply
  5. LadyFIRE

    Is that 50% savings rate on two peoples income of $6k? If so then I’m super impressed!! I’ve only been following the blog for a couple of weeks but I haven’t seen anything about how you are funding two people (and a baby?) on $3k a month. I’d love to hear more about it, since I spent more than that on myself!!

    Reply
    1. Dividends Down Under Post author

      Hey LadyFIRE, indeed it is 2 people at $6k income, with $3k expenses :). Baby hasn’t arrived yet so technically no ongoing baby expenses yet – but we do have doctor appointments, ultrasounds and buying things for the baby factored into our expenses. We have made a few posts in the past about our money choices in our category “frugality & our financial choices” – https://dividendsdownunder.com/category/frugality-our-financial-choices/ but we don’t ever itemize our expenses in our monthly updates. Doing simple things like food shopping at Aldi, being a one car household, taking public transport to work, renting an older property an hour commute from the city, etc, all those choices of ours add up to the savings rate you see!

      I did have a little look at your savings/expenses update on your blog – looks like a lot goes towards mortgages with your own home and an investment property! Looks like property is your main jam for the FIRE plan :). I’m sure without those housing expenses you’d have a killer savings rate yourself.

      Reply
      1. LadyFIRE

        I was going to ask you to scrutinize my spend, so thanks for already doing it! The housing expenses are a double edged sword, because without the two properties I’d have to knock close to $1,700 a month off my income – I budget $2,500 a month to pay for both houses, but that includes things I’d still be paying for in a rental (electricity, gas, water)

        Then there’s all the tax benefits of rentals. It’s mind bending trying to weigh up all the variables!

        Reply
    1. Dividends Down Under Post author

      Thanks! I love the staircase effect of our graph, it’s very satisfying! Doubt we will hit the next “stair” in March though, that would be quite the feat.

      Reply
    1. Dividends Down Under Post author

      Thanks Amber tree :). Hoping to hit that elusive 50% a few times this year, feeling great about our finances and investing at the moment.

      Reply
  6. The Green Swan

    Impressive month! Especially considering it was only a two pay period month.

    You folks have the same philosophy as us, saving with the future in mind (kids and FIRE!). Keep up the good work.

    Reply
    1. Dividends Down Under Post author

      Thanks TGS. Family is the main focus always, and the plan for FIRE is ultimately to spend more time together/as a family/doing things we enjoy together. Great reasons to make good financial choices if you ask me 🙂

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *