Perhaps the most important factor for how quickly we can reach financial independence and retire early is how much we save. The difference between saving $30,000 and $40,000 a year can snowball significantly over a decade.
We aren’t trying to save every last cent we can. We want to enjoy our lives and experiences now, not just when we reach FIRE. However, at the same time we recognise that living a simpler life means we save more, it also means we don’t need to accumulate as much wealth to afford the lifestyle we want of living off only our investment income.
We are currently aiming to save around 50% to 60% of our net income.
Most of the money we are saving is being split between our house fund and investments. We post any articles about our money savings choices or habits here.
October 2021 Savings Update
Dividend Income: $3,025.07
Regular Income: $11,173
Adsense Income: $0
Total Income: $14,198
Savings Rate: $9,651
Savings Percentage: 68%
Here is the graph:
We invested a total of $3,010 of our savings into shares (not including any Dividend Re-Investment Plans). We added $6,641 of this month’s savings to our house deposit, this amount included $258 of interest (pre-tax).
Here are the changes compared to last year:
October 2020 rate: 77.1%
October 2021 rate: 68.0%
October 2020 savings: $10,536
October 2021 savings: $9,651
Dividend Income – In October we received $3,025.07. Our dividends covered 66.5% of our expenses. Our biggest month for dividends has seen us theoretically cover two thirds of our expenses, however all of the dividends were just re-invested or added to the next share purchase.
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 Little DDU in our life. Our superannuation (payments made for our personal retirement – sort of like 401k in the US or NEST in the UK) contributions are not included in our income or savings rate, but do help our long-term wealth.
Google Adsense – As the name suggests, it’s when Google makes a payment for advertising on the blog. We received a payment in January 2021, thanks for reading our blog!
Here we go, non-regular expenses that happened this month:
Food – We are spending a bit more on supermarket food at the moment, buying quality food and even more fruit & veg. Smoothies are a big favourite of Little DDU. Very yum and awesome.
Vet – We took our cat to see the vet in October, so we spent a little bit on that. Everything is fine and our kitty cat is great.
Start of Christmas shopping – We are planners, so we had already started getting some Christmas presents sorted as we see them. Ideally for us, we’ve got everything sorted by the end of November so that December can be pretty chill!
Here are our two savings tables since we started blogging showing the savings rate % and the savings rate in $ terms:
Another solid month in October 2021. This month was just a normal amount of spending, whereas October 2020 we spent very little, so it was going to be hard to beat this time around. Even so, we’re very lucky, grateful and focused to be able to save such a large amount in one month.
The 3 key factors for us to become wealthy are:
These monthly savings posts will track how good we’re doing with the first 2 factors.
How did your savings go in October?
Thanks for reading this article about our financial journey Down Under.
Onwards and upwards!