Every month I’ll post an update on my finances from the last month, with a focus on increasing income, spending less, and maintaining a high savings rate. You can see previous updates here.
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Results – August 2017
2017 Savings Rate: 54%
For the last few months my savings rate has been pretty stable, hovering in the mid 50’s. While I could cut more in some areas, I’m also happy with where my spending is at.
I actually way overspent on food this past month. In June we started taking a closer look at what we were eating and challenged ourselves to change what and how we eat. It’s a subject that deserves its own post and a lot more detail, but the short of it is that we started eating clean (no preservatives, added sugar, and artificial ingredients, grass fed meats and dairy, and organic fruits and vegetables when needed).
At the same time we stopped eating grains – by cutting out pasta and rice, we also cut out the cheapest items on our grocery list. And the meats and half the produce we were buying was more expensive.
Perhaps the biggest factor of all was that we went all out with this new approach to food. Over the course of the month we ate down a lot of what we already had and replaced it with something clean and whole. We also tried a ton of new recipes and did more cooking than we ever have.
Over time I expect our food expenses to stabilize again. Probably 25% of what we bought was long lasting ingredients – things like spices, new flours, oils, etc. We can save even more by buying in bulk as we get a better idea of what we need a lot of. We also tend to stick to the grocery store closest to our house, which probably doesn’t always have the best price, and we haven’t explored our local farmers market. And if it came down to it, we could substitute cheaper meats and vegetables.
A benefit of doing a shit ton of cooking was that we only spent maybe $30 eating out. We normally spend around $100-$150 a month (eating out around once a week), so despite the higher grocery bill (which we can get down) we saved money in this area.
Other than food, spending was minimal this month. We bought plane tickets, which were immediately offset by credit card rewards, and are doing the same for a hotel for our vacation next month. And we still have rewards we can use for food and other spending, so our vacation costs are looking like they will be almost nonexistent.
As I mentioned earlier, I’ve hit a consistent savings rate for the time being. August will be a good month with 3 paychecks and a quarterly bonus, plus some bank/credit card bonuses showing up. This year I’ve also done a much better job of anticipating big expenses and just planning in general. After 2 years of using a budget and tracking my spending, it’s obvious just how big of a role my habits and routines play in how I spend money.
Making the decision to eat better required changing routines and habits, and now I have to work on making that aspect more efficient. When your finances are mostly on autopilot, it’s easier to afford a big change (both in terms of money and time/mental energy), and especially when you have the freedom to focus on making it an Effective AND Efficient part of your life.
This month has also been a good reminder that being happy comes from being able to spend on what you value. More and more I’m valuing my health (something I attribute to nearing 30) and the “teambuilding” things I get to do with my partner. So yeah, overspending my grocery budget by a couple hundred dollars one month was totally worth it!
Thanks for reading!
I calculate my savings rate as follows:
401k contributions + employer match + debt payments + other savings / Take home pay + 401k contributions