August was a great month for saving. I made $3661.68 and saved $2650 for 72.3% of my income saved. It is very easy for me to save money when I actually make a decent amount. This good month of savings will be a big help in reaching my goal of saving 50% of my income. My expenses were also lower in August which helped lower my average monthly expense total which helps with my safe withdrawal rate. My stocks lost money or I would have done even better. I lowered my SWR to 52.2% from 58.13% the month before. I have a long way to go to get to my goal of a 4% SWR, but at least I’m making progress again.
The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. I have 22.96 months of living expenses saved now. That is a little bit higher than the month before and still below the 24 months of savings I had earlier this year. Now that I have more months of expenses making my average monthly expenses, one good expense month doesn’t change the average that much. I expect to save a decent amount again this month so the SWR and months of living expenses saved should continue to improve.
Congratulations! What are you doing with the savings? Is it growing too?
Most of the money I have saved so far this year has gone into stocks. Now that I’ve maxed out my IRA I plan to build up a bigger cash cushion.
Pretty good savings. I have been reading a lot about the woes of people with student loans. (I have none.) It is scary! One person actually lives in the Phillipines just to get out from under his and the debt collectors. How does your future look with yours? Doesn’t interest accrue all along? That alone is a nightmare for many while a loan is in forebearance.
My loans are on income based repayment so they are not a major concern. Interest does accrue and my balance owed continues to go up. If the loan isn’t paid off in 25 years then the balance owed will be forgiven. That is the most likely scenario currently. If I’m able to increase my income significantly I might be able to pay the loans off before that happens.
Nice job with the high savings rate Andy! Looks like you keep your expenses way down which helps quite a bit I am sure. I am curious, what is SWR…..maybe Savings Withdrawal Rate?
You were close. It is for safe withdrawal rate. I usually try to explain the abbreviation somewhere in the post. It looks like I forgot to include it this time.
So this is a withdrawal rate that will not erode the principle amount?