June Savings Rate – 5.25%

June was another bad month on my progress towards financial independence.  My SWR has increased to 59.41% from 55.15% the month before.  Some of that is because I am setting money aside for my hiking expenses and another reason is I haven’t been saving much.  And in June my investments actually lost money to make things even worse.

My goal is to save 50% of my income each month and I didn’t come close to meeting that goal in June. I made $1902.65 and managed to save $100. That amounted to a 5.25% savings rate.  My June expenses were once again too high.

The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. I have 20.19 months of living expenses saved now. I had my monthly expenses up to 24 months earlier this year, but the combination of higher monthly expenses and low savings has caused me to go backwards. I probably won’t be able to reverse this trend until I return from my hike.  My monthly expenses should go way down though so maybe that will help reverse the backwards trend.

14 thoughts on “June Savings Rate – 5.25%”

  1. Wow! 59% is pretty high! How long do you plan on this extreme savings scheme? I would go with a more sustainable percentage that you can maintain every month.

    • My savings rate was only 5.25% for the month. The 59% was my safe withdrawal rate which is an entirely different number. My goal is to save 50% of my income. As long as I can make a reasonable income the percentage is sustainable. Unfortunately, I haven’t had a reasonable income the last couple of months.

  2. I happened across your blog via a retweet from MoneyBeagle. Looks like your expenses were up due to a couple expenses you couldn’t really avoid like the property tax and registration. I’m sure you’ll be up next month just by being conscious of your spending and having a goal.

    Where kind of hike are you doing? I’m not a particularly outdoorsy girl, but my husband is trying to expose me to the wonderful world of long hikes and backpacking… which is surprisingly fun!

  3. Alright, remind me.. why 25x annual expenses? What happens when you reach that point?

    Where are you storing the expenses in terms of investment vehicles, are they all in taxable accounts?

    How is your non taxable account status, are you maxing out all your plans?

    Do you own your home outright, mortgage or rent?

    • The 25x annual expenses equals a 4% safe withdrawal rate which is a commonly considered to be a sustainable rate for retirement.

      An IRA is the only non taxable account available to me and I did max it out last year and plan to max it out again this year. I might also open a Solo 401k and put some money in there.

      • Nice – but this theory requires a certain age of retirement and other factors such as sufficient Social Security I would imagine?

        What happens when you hit your goal -can you retire, or does that only work if you are of age X?

        • The theory is based on 30 years of retirement. Social Security would be considered part of the savings for the 4% withdrawal rate although I will probably leave it out of the equation and just consider it an additional safety net.

          I think I’ll be able to retire at that point but I imagine there will be things – like this blog – that I will still work on that will make me money.

    • Something is better than nothing. My goal is 50% savings for the year which I have NOT yet accomplished. I have managed to meet that figure on a monthly basis a few times. I still have a reasonable shot at meeting the 50% savings goal this year.


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