Author: Mr and Mrs DDU.
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 on 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 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.
October 2017 Savings Update
Dividend Income: $344.99
Regular Income: $11,316
Blog Income: $0
Total Income: $11,661
Savings Rate: $4,213
Savings Percentage: 36.1%
During October we invested a net total of $1,631 of our savings into shares, which we will post about soon. We also saved $2,300 of our savings towards our house fund.
Savings rate including Superannuation: 36.1%, this is the net amount after the superannuation contribution tax of 15%.
(We count superannuation savings when a payment is actually made, usually every 3 months).
Considering last year’s October was a negative, this was a great turnaround. The main reason why it looks good is because it was a 3 pay period month. Here are the changes compared to last year:
October 2016 rate: -6.5%
October 2017 rate: 36.1%
October 2016 savings: -$373
October 2017 savings: $4,213
Dividend Income – We loved how much we smashed last year’s monthly total. Maybe now that we’re a couple of years into this journey, we can start calculating how much of our expenses the dividend income could cover. Our dividends covered: 4.6% of our expenses. It was our biggest month for dividends, but also our biggest for expenses.
Regular Income – This is the after-tax figure if you’re wondering. It is the combined figure of both our incomes plus any bank interest we have received. This amount also includes any government payment(s) we receive now that we have Baby DDU in our life.
Blog Income – We count this payment when we receive a Google Adsense payment into the bank account. We didn’t receive anything this month.
Here we go, non-regular expenses that happened this month:
Hospital expenses – We had a few leftover bills to pay for Baby DDU’s birth which we paid in October. We haven’t gotten around to getting Medicare & Private Health refunds for what we’re entitled yet, so we’re disclosing the expenses now and will report the refunds as income when we get them in (probably, hopefully) November.
Health Insurance – It’s no secret that health insurance just keeps getting more expensive for Australians. It particularly sucks for younger Australians who, on average, are net ‘losers’ from the system. Our annual hospital cover is now above $3k, which is sadly good value considering we’re with a not-for-profit fund. Even though we’ve had Baby DDU, we are going to keep our health insurance for the foreseeable future as we really value the expert care (particularly little wait times) that we’ve had over this experience. Who knows when the next health need will be?
Convenience food – We’re pleased to say we have substantially cut this down compared to September, but it still played a part in the first couple of weeks in October. The better we can be with this, the better for our wallets and stomachs!
Baby stuff – It’s fair to say that baby/child expenses will be a feature for the rest of our budgets for many years, but it’s a sizeable reason why our expenses have risen a bit.
October is by far our most expensive month, considering we are now dropping more than $3k on annual private health insurance in one month. However, we’re very happy to be saving more than a third of our income even with this happening. The main reason we managed to do this was because it was a 3 pay period month, but that counts of course. We’re very glad to have gotten all previous 12 months as a positive savings rate, hopefully it’s always positive from now on!
Thanks for reading this article about our financial journey Down Under.
Onwards and upwards!