October was not a great month for saving. I made $803.19 and saved $100 for 12.4% of my income saved. This was way below my goal of saving 50% of my income. It is difficult to save much when my income is that low. I lowered my SWR to 47.67% from 49.28% the month before. I’m happy that I made a little progress despite my low savings amount. Gains on my stock investments and the lower expense level helped me reduce the SWR even with the tiny savings contribution for the month. It doesn’t look like I’ll be able to continue making progress for November or December though. My income looks like it will stay small and I have to pay my six month car insurance bill, my car property tax, and the remaining balance of the cruise.
The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. Once I reach that point I will consider myself financially independent. I have 25.17 months of living expenses saved now. My tax job starts in January, but I’m hoping that I can find a temporary job before then so I can end the year on a good note.
The month to month changes indicates that it is very difficult to maintain a 50% savings rate. Despite that, it is what yu average for an entire year that matters anyway.
The yearly average is the one I’m more concerned with. It wouldn’t be that difficult to maintain the 50% savings rate if my income was stable.
It is absolutely true that without a constant income, you can’t set aside a constant figure of savings. With my monthly income ranging between $500 and $1,000, I always save between 10 to 13 percent every month after deducting the estimated expenses. But as long as one is saving on principle, I think it’s fine.
That is a pretty good savings rate for that level of income.
I’m so used to hearing depressing statistics about how terrible people are at saving that I thought you would be more excited about a 12.4% savings rate. Congrats on having a higher expectation for your savings than the average person. Well done.
Thanks, that would be a good savings rate for many people. My goal is 50% so 12.4% isn’t very good.
50% would be incredible, best of luck as you work toward your goal.