Money Update – April 2017

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 – April 2017

April was a “normal” month – 2 paychecks, a tame stock market, and flat expenses.  My net worth increased, I paid off some debt, and I paid my 6 month car insurance bill (I really did save 15% or more by switching to Geico…).

The result?

2017 Savings Rate:  55%

My yearly savings rate dropped a bit.  I knew it was coming.  It’s why I decided to use my yearly savings rate (instead of monthly) as the metric of progress for these reports.  Having a good month is much easier than having a good year – you can delay purchases, slash spending, save as much as you can, hustle and make more income – but you fail to stop and ask yourself if it’s sustainable.  And is it really progress if it’s not sustainable?

Having a good year is a grind.  It takes planning, focusing on good habits, thinking not just about what will make you happy today but what will make you happy in a year, 10 years, when you’re 70.  It takes luck and resources.

For reference, I’ve included the formula I use to calculate my savings rate at the bottom of this post.  I read a discussion the other night debating whether or not it was a useful metric for measuring financial progress.  As long as you measure consistently and against yourself, it’s useful.  When you start measuring against other people, your problem becomes a lot bigger than how you’re calculating your savings rate or your net worth.

Thanks for reading!

If you’re interested, I use You Need A Budget for monthly budgeting.  For tracking Net Worth, I recommend Personal Capital (automatic) or (manual).

I calculate my savings rate as follows:

401k contributions + employer match + debt payments + other savings  / Take home pay + 401k contributions

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5 thoughts on “Money Update – April 2017

  1. I like the idea of tracking yearly progress. As you said, it’s easier to have a good month, but having a good year is also about consistency and sustainability.

    1. I agree, you can learn a lot in one month, but you get some really good knowledge when you track your progress in anything longer than a few months.

      Thanks for your comment and for reading!

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