Savings rate for the first half of 2016

Time is flying, I can’t believe is July already. Officially, it’s only three more months before we head on our adventures. The last time we reported our savings rate was at the end of 2015. At that point, we had saved on average 31,3% of our income throughout the year. The year was full of unexpected events that affected our finances like me changing jobs, forced leave and Mr DN finding a job in which he could utilize his degree.

The savings goal for 2015 and  2016

Originally we set two savings goals for our move to Australia, a percentage and a round number. We planned on saving 30% of our income per year, however, we also wanted to make sure we had at around 20,000 euros (approx. 30,000 AUD or 22,000 USD) in total to fund our move, and expenses when we get to Australia. We have kept increasing our target number as new needs have risen, and currently our target is 22,000 euros. We set these two separate goals because we weren’t sure how things would pan out. To begin with, we thought a percentage would be easier to follow with fluctuating income but we have actually been able to keep up with both of these goals.  At the moment we are only a few thousand euros short of our goal. We should be able to reach our savings goal before our move.

Savings rate for spring of 2016

This spring has been eventful as well. In terms of finances, we have been better off than the year before, but as you can see later we have still been living on a relatively low income. At the beginning of the spring, I was still on part time forced leave while Mr DN was finishing his graduate school and working part time. At the end of February, I started full-time work again. Our income has consisted of my wage, unemployment benefits, Mr DN’s wage and some student support.

For the spring our income has fluctuated quite a bit. It has ranged from 2300 Euros (2560 USD, 3400 AUD) to 3400 euros (3780 USD, 5040 AUD) per month, but our savings rate has remained relatively stable. On top of our savings, we have been putting money aside for our epic travels. We haven’t included this money in our savings rate as the money is merely delayed spending.

Without further ado, here is our savings rate for the first half of 2016.

savings

Our spring savings rate has been on average 33.9%. It feels really nice that we’ve been able to put money aside for this new chapter in our lives. I’m anticipating that the transition itself can be quite overwhelming, so it is nice to know that we can take one day at a time and we are not in a massive rush to find new jobs.

And this is how we did it

Like you saw earlier, our income hasn’t been huge for the past spring (or the year before) but we have still been able to stash away a good chunk. The foundation for our money management has definitely been tracking spending and budgeting. I’ve been planning to post our budget template for quite a while now because it’s really great.  Lovely Mr DN created it for us and it works like a dream. With it you can both plan and track your spending  at the same time! My aim is to publish it before the end of the month. We have been budgeting since we got married and it has really helped us to work towards mutual goals.

On top of being aware of our spending, we have consciously made choices which keep our basic living expenses relatively low (transport, living and food). We don’t own a car so we either take the bus or bike, we live a bit further away from the city where the apartments are cheaper and we cook most of our meals from scratch.

Furthermore, we keep our other expenses low. We both have a modest spending money, we don’t eat out too often and usually, we don’t go on expensive dates. For example, this summer we have done plenty of dates to the local allotment gardens which are free. The past month, one of our biggest splurges has been ice-cream. Sometimes we make our own ice-cream, but other times we buy ice cream to take with us on our dates. I checked our budget and saw that we spent 25 euros just on ice-cream in June. And yes I like numbers, so I actually follow the amount of money we spend on ice-cream

The local allotments

The local allotments

What’s next

Mr DN just graduated and has started full-time work (pops the champagne). I’m really proud of him. He has been juggling graduate studies, part-time work and improving his Finnish language skills (fun fact,  the Finnish language is one of the most difficult languages to learn for English speakers). He also has a few weeks of paid vacation this summer which is great. Surprisingly, I was given another notice for forced leave just  three weeks ago. I will be on part-time forced leave for the summer. The good thing is that this year I have plenty of paid holidays. I have seven weeks of holidays as I’m allowed to take next year’s holidays as well due to the fact that I won’t be able to take them next year.

All of our savings have been and are still going towards our move to Australia. After we move, we start tunneling our income towards building financial security. Although it would be nice to be putting money aside for long term savings (e.g emergency fund and investments), at the moment our priority is our move. We feel like the move is an investment towards our future.

We could’ve pushed back our move by some years so that we would have built financial security first and then moved. But when you think of it, the whole point of financial independence is that you can live on your own terms and that is exactly what we are doing. Our cushion of 22,000 euros is allowing us to make a change in our lives that we have been longing for for a while now. For the past few years, we have had good practice at living below our means. That means that once we move and find jobs, it should be relatively easy to continue the same lifestyle and start redirecting our savings towards building financial security. In the end, we are not saving money for money’s sake, we are saving to be able to make choices in our lives. Now the money that we have saved allows us to move to the other side of the world.

 

How has your year been so far?

 

Featured image by Roman Kraft

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10 thoughts on “Savings rate for the first half of 2016

  1. So inspiring! Congratulations on your progress and for keeping your savings rate the same despite the changes that happened. Congratulations to Mr. DN on graduating and sorry to hear about your forced leave. But, on the bright side, you’ll more time to prepare for the move or yarn or travel or learn new things! 🙂

    1. Thanks for the encouragement! I don’t mind the forced leave because it does give me a bit more time to prepare mentally for the move and also time to use up all the yarn I have here!

  2. Looking forward to hearing about your budjeting tool! Since my own version sucks and I can’t keep up with my spendings. One big problem for me is that I would like to follow months, but since I get my salary in the middle, it would be reasonable to follow the time between salaries.

    1. Hopefully we will manage to publish it this month, I really like it! Tricky situation, how are you doing budgeting at the moment? We will also have to think about this issue once we move. In Australia, you may get paid biweekly but you would get some bills weekly. I haven’t figured out how to deal with that yet 🙂

  3. Hey Mrs, good job on getting closer and closer to your goal of savings. The time for moving is getting so close, don’t forget to get some sort of travel insurance (maybe).

    Our year has been ups and downs, some savings rates great, some low. Yours seem extremely consistent, is there budgeted savings in that number? Maybe you pay everything monthly?

    Tristan

    1. Hey Tristan,

      you guys are doing well too! It is completely normal that your savings rate varies depending on the expenses you have. Our savings rate only includes what we have saved towards our move, all our other “savings” are marked as delayed spending in our budget. For example we have some bills that we pay every few months, but we put money aside for them every month. We have a separate spreadsheet that we use to follow all the smaller “savings”. Do you pay bigger bills as they come or do you prepare for them in the previous months?

      1. We pay bigger bills but are aware they’re coming up, and have budgeted for them in our annual budget. We count them as expenses when they leave the account, rather than pre-saving for it or pre-counting it as an expense. Either method works 🙂

        Tristan

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