I’ve decided to start keeping track of my saving rate. This will provide me a record of how well I’m doing at saving my money and should also motivate me to keep the saving rate high. After this month I will include my saving rate with my monthly income or expense report.
In July I managed a saving rate of 60.5%. That is a pretty good rate but it could have been even better. I also made a contribution to my Health Savings Account in July. I don’t consider this year’s contributions to my HSA to be savings since I will be withdrawing them later this year to cover medical expenses.
I calculate my saving rate as the percentage of my monthly income that I put in my retirement accounts or in dividend stocks.
In July I contributed $1850 to my traditional IRA, $400 to my solo 401k, and $238.97 to my dividend stock portfolio. I also transferred $833.88 from my emergency savings account to my checking account. I subtracted that amount from my total contributed to savings for the month since this was money I already had and not income received during the month. Without subtracting the amount my saving rate would have been 91% which I felt wasn’t an accurate reflection of my saving rate for the month.
This wasn’t the best time to start tracking my saving rate. August should also have a good saving rate. After that though my saving rate will be low or zero during September, October, and November since I’ll be in SE Asia and probably won’t have any income to save.
Going forward I want to shoot for a 70% or higher saving rate for any months that I work full-time. My low expenses should allow me to easily save over half of my income and I’m interested to see how high of a saving rate I can achieve.