YES!! I DID IT! My BHAG (Big Hairy Audacious Goal) of saving more than 70% (74% to be exact) of my take home income was accomplished (65% pretax income)! Although this was only for the month of November, it is completely possible and repeatable as November was a fairly typical month. I kept track of my income and spending via my iSpending app and it was incredibly convenient for doing so.
There were a few expenses that were not up to standard, like my utility bill and phone bill, which will probably account for an extra 2.4% of my expenses. However, I only had the equivalent of one full time roommate during November. Casa de Crass is now full, so more income will be added going forward, probably about 7-8% to this savings rate, with all else constant, should increase not decrease going forward. Property tax was not included because it was paid for at closing. It will have to be added next year.
Since I started this at the beginning of October and was a failure of only saving 25% of my take home pay. Due to last month this has now come up to 50% for the two months. To show you how one bad month can destroy a budget and get you back on track (last month was due to vacation) it will now take me 10 more months of saving what I did in November to get me to where I should be for the entire year.
Another way of looking at this is that I bought myself 3 months of freedom from my job. I could now quit my job for three months and not have to change my lifestyle. To be honest I have probably been saving an amount not too far from this already. I just never kept track of it before because I think budgets are for bitches.
When you break your life down into just buying the necessities, than you don't need a budget. You're already (as demonstrated last month) going to save your maximum amount.
For those who don't believe me, I've taken the liberty of breaking down last months income and expenses for your viewing pleasure...
Income:
Rental related activities - 35.24%
Job related - 64.76
Expenses:
Transportation-1.92%
Charity(tax deductible)-5.4%
Clothes-2.03%
Home-4.21%
Mortgage-42.92%
Gas-12.17%
Eating out-4.55%
TV/Internet-5.31%
Phone-0.68%
Groceries-7.96%
Dog-8.49%
Utilities-4.37%
A few things should jump out at you, like how I apparently need to eat my dog rather than have one. When you spend such small amounts these figures become highly distorted.
You can't tell by percentages but according to last month my spending habits are less than twice the poverty level (I think that qualifies me for a subsidy). And therefore, leaves no excuse as to why somebody who makes more than $10 an hour can't live decently and also save for retirement. That jerk Crass Cash will comment more on this tomorrow...
So how did I do it? Well absolutely nothing went to waste. Especially not food! Prior to buying everything, I sincerely asked myself, "Do I really 'need' this?" (with the exception of a shirt prior to a football game). This keeps you from buying pretty much anything. What about the cable and Internet? That's an investment because it allows for me to attract better roommates and also charge a higher rate. It pays for itself, otherwise I wouldn't have it.
I also made much more of a conscious effort to bring my lunch each day and not drive into town for lunch. This saves me approximately $10/day on food and transportation. Also I now live in an area where I can ride my bike to virtually anything that I might need. Thus saving more on transportation costs, plus it's great for my health.
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