# Long-term outlook - my money diary



## DividendLuvr (Mar 5, 2014)

Hello! I'm new to posting on CMF but have been lurking for a while. Everyone here is a fantastic resource and I really appreciate this community and everything I've learned to date. 

I view this money diary as a way to track my progress over time, in a very open, honest, accountable way. I've really enjoyed reading the perspectives of others and wanted to try my hand. 

Here are my vitals:

Age: 28
Status: Engaged, living with my partner (not common-law) - that being said, I will track my own personal finances through this diary
Gross Income: $86,100 + performance award (up to 10% of gross); this salary will be effective as of April 1st as I have just received a raise
Pension: Defined benefit pension plan (HOOPP)

Savings: (retirement - for now)
TFSA: $33,770.99 (maxed out)
RRSP: $26,319.46 (~$10k contribution room)
Unregistered Account: $14,457.04

These accounts are invested in a 60% equity/40% FI split. My strategy is to carefully select individual dividend-yielding stocks where I see value, rather than indexing; this has served me well to date. One of my goals this year is to diversify my holdings through exposure to global markets; this will be accomplished through indexing. 

Initially, I was building a nest egg to lay out for a downpayment and closing costs, etc. (hence not contributing more to my RRSP's after reaching the $25k max for HBP). However, I now have zero interest in entering the real estate market (I'm in Toronto) as I can increase my net worth considerably faster by renting at this time. With that in mind, I'll likely start contributing to my RRSP's again this year (optimizing, not maximizing, my contributions). As well, I decided that I don't want to use the HBP for a downpayment, if and when I do buy. (It sure won't be in this market!) 

I also have a primary checking account at a full service bank: $8,603.08 (balance maintained above $5k so as not to incur any bank fees)

In addition, I have some HISA's with ING:

Emergency Fund: $1848.11 (goal is $10k)
Clothing: $583.59
Car Maintenance: $501.00

Liabilities: None

Monthly net income (as of April 1st): ~$4,050 (will be $6,100 when there are three pay periods in a month)

Monthly expenditures:

*Savings* 
Retirement: $1,000 (auto-transfer to my unregistered account)
Emergency Fund: $500 (auto-transfer to my ING HISA)

*Fixed*
Rent: $1,328.42
Car Insurance: $145.28
Fitness: $65.54
Internet: $50.85

*Variable*
Groceries: $250
Clothing: $200 (saving to maximum $1k - I'd rather have it saved before I purchase a new wardrobe)
Personal Care: $150 (includes dry cleaning)
Restaurants: $100
Charitable Donations: $65 (not including payroll deductions at work)
Gifts: $50
Utilities: $45
Parking & Gas: $30 (parking included in rent)
Household Items: $30
Miscellaneous: $20
Vehicle License Renewal: $7 (saving towards renewal in July 2015)

Total: $4,037.09

This represents around a 37% net savings rate; I religiously track all my expenses and have been dialling up the savings percentage over the past 18 months.


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## coolbeans (Oct 2, 2013)

Everything looks really good. The thing that jumps out at me is your emergency fund. Your overall savings is quite good, but it appears to be locked up in your investments. Unless I'm mistaken, your available cash is $8600 in your chequing account and the $1800 in your 'Emergency Fund'. I assume that only $5000 of the chequing balance is available for emergencies as the rest floats up and down for bills. Is $6800 ($5000 + $1800) sufficient as your emergency fund? If your goal is to save up $10000 for your Emergency Fund account, maybe you should focus on that. Maybe flip the $500/$1000 auto-transfers. That will get you to $10000 in your Emergency Fund account in ~8 months rather than ~16 months.

The other thing you might consider is using your unregistered account money (or $1000 auto-transfer if your investments are tied up) to top up your ~$10000 of RRSP space. If you are 'optimizing' your RRSP contributions, which I assume you mean you're using up your top tax bracket, and no more, then just hold back applying your 'un-optimized' contributions for the current tax year. You can use them to optimize your taxes in the following years, as appropriate. They will at least benefit from tax-sheltered growth, which your unregistered account savings are not.


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## DividendLuvr (Mar 5, 2014)

Thanks for your encouraging words, coolbeans! Yes, I am thinking of switching my $1k and $500 contributions so that I can reach my Emergency Fund goal ASAP, while still contributing to retirement (formerly downpayment) savings. Also, I should clarify: my RRSP _contributions_ will likely be maximized this year (and every year moving forward), but the deductions I apply for tax purposes will be optimized, with the remainder carried forward for future years. I figure that I may as well max out my RRSP so that I can benefit from the power of compounding interest/DRIP's and tax-free growth. If my priorities change and I do eventually want to make a downpayment, I can easily realign. That being said, I don't foresee this happening unless there is a significant RE market correction. I did the math, and it would not be a wise decision to enter the market now and focus my resources in such an illiquid asset. I can build equity at a much faster rate, at this point, by renting.

Once my Emergency Fund reaches $10k, I will redirect those savings elsewhere. I decided the most important thing about my raise is that I would bank it rather than tolerate any lifestyle inflation.

I am also considering my long-term net worth goals (challenging but attainable), which I will post here once finalized.


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## alex52 (Dec 12, 2013)

I would always put property central part of my investment. I speak from experience rather than theory. 
Markets can move side ways for years, but once you paid off your house you will always save on the rent which will increase with inflation, plus appreciation in property price.


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## DividendLuvr (Mar 5, 2014)

alex52 said:


> I would always put property central part of my investment. I speak from experience rather than theory.
> Markets can move side ways for years, but once you paid off your house you will always save on the rent which will increase with inflation, plus appreciation in property price.


I certainly plan to buy when my net worth can increase faster by building equity in property. But not in this market (in Toronto). The numbers, as they stand, don't lie - renting is the way to go for the time being. I will re-evaluate periodically. My rent also hasn't increased in two years, and likely won't for some time as my landlord prefers a reliable, fuss-free tenant over annual rent increases (I rent a condo from an individual owner). Property appreciation in Toronto cannot continue forever at current rates, and I'm not going to bet the farm on it.


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## Taraz (Nov 24, 2013)

alex52 said:


> I would always put property central part of my investment. I speak from experience rather than theory.
> Markets can move side ways for years, but once you paid off your house you will always save on the rent which will increase with inflation, plus appreciation in property price.


If you're buying with cash, and you're not planning to move for 20 years, you might be able to make that arguement. However, when you're a young person, you might get a better job offer or meet a girl and decide to move (then prepare to shell out thousands for realtor fees). Also, most people use leverage (mortgages) to buy real estate, which is great when things are going up, but can wipe you out when things go down. In general, most people use cash to invest in equities, which entails less risk. 

As for markets moving sideways, my house is still worth $100k less than what I paid at the peak. Renting would have been far cheaper. Meanwhile, the TSX is up approx 10% since fall 2007 (and up approx 60% since the bottom of the crash). 

You can't sell part of a house. Stocks don't have the same carrying costs (taxes, condo fees, maintenance, utilites) as real estate. There is definitely a place for real estate in a portfolio, but not when it's overpriced (like the Toronto market is now).


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## DividendLuvr (Mar 5, 2014)

*August 2014 update:*

*Assets*:

Investment Accounts (intended for Retirement and/or first time home purchase): 
TFSA: $36,847.57 (maxed out) (+9.1% since March with no further contributions)
RRSP: $27,104.10 (~$10k contribution room) (+3% since March with no further contributions)
Non-registered Account: $20,596.00 (+42.5% since March, including new contributions)

Total: $84,547.67 (+13.4% since March)

Note: I have been focusing my savings in my Non-registered Account for the time being, as my fiance and I are not sure if/when we would like to purchase our first home. (If we do so, we do not want to use HPB. Therefore, I am not locking up more money in my RRSP at this time.)

Chequing Account Float: $9,360.64 (maintain a min. $5k balance to avoid incurring any bank fees)

Other Savings (all held in Tangerine HISA’s):
Emergency Fund: $3,363.31 (targeting $10k)
Wedding: $5,759.23 (targeting $15k by August 2015) 
Clothing: $819.00
Car Maintenance: $503.75
Vehicle License Renewal: $96.48

My partner and I are now engaged and have begun saving (jointly) for our wedding, which will be quite small. This includes a honeymoon. 

DB Pension Plan: TBC (current value ~$100k).

*Liabilities*: None

Monthly net income is now just over $4,600, as my raise has kicked in and my CPP/EI contributions are maxed for the year. Of this, I am saving $1,900 (41.3% of net income) - $1,000 to Retirement/Home Purchase, $500 to Wedding, and $400 to Emergency Fund. 

*Net Worth Goals:*

As soon as I confirm the current value of my DB pension, I will calculate and begin tracking my net worth here and establish some concrete and attainable net worth goals, in five-year increments.


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## DividendLuvr (Mar 5, 2014)

It's been some time since I've posted here, but there have been several significant milestones reached, and I plan to update more regularly - particularly as I adjust to married life. 

1. Wedding & Wedding Savings: My new husband and I saved well over $30k for our wedding (in August), and everything was paid off before the big day even happened. It was really wonderful to savour the wedding (and honeymoon) without an iota of financial concern. Thank goodness we have a similar approach to financial management and frugality! We paid for everything for our families and it was so special for them. Moreover, we have >$5k surplus, and are keeping this reserved for a trip to Italy next summer.

2. Raise: Earlier this year, I negotiated a 30% raise (tied to a promotion) to $112k + performance award (max 10% of gross). I have been careful not to translate this into a lifestyle adjustment, and have managed to "bank the raise" in full - this was incorporated in my monthly budget from the beginning. Which leads to...

3. Savings Rates: Now sitting at 52.73% of net. This does not include my DB pension plan - I don't even think about that. All savings are being directed to top up our Emergency Fund to $15k, at which point they will be redirected purely to TFSA (no contribution room right now) and RRSP (~$15k contribution room). The Emergency Fund - current balance is $5,600 - will be complete by December, or even sooner, depending on how much my husband is able to contribute. 

4. Insurance: It pays to shop around every year! This year, we've consolidated our tenant and auto insurance with Co-operators, and saved $182.64 in annual premiums - for a better auto policy than we had at TD, even with my alumni discount. Bye, TD!  

5. Real Estate: My husband and I live in Toronto, and have zero interest in purchasing a home at this time. We know we'll have a hefty downpayment ready when we need it, but we can increase our net worth much faster by renting and saving the difference. Our entry point will come when the market corrects enough to make it worth our while - and we're very happy to wait. Importantly, we have a great landlord who has raised the rent all of $25 in the past three years - so if we can avoid inflation of this major expense, that's even better.


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## DollaWine (Aug 4, 2015)

Congrats on the wedding and good job with your financial planning! 52% of net going to savings is great. And yes, I definitely recommend shopping around for new insurance quotes every year or two. 

If you don't mind me asking, what field do you work in that you were able to negotiate a 30% raise? That's awesome.


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## DividendLuvr (Mar 5, 2014)

My September savings rate was 53.69% of net (excluding DB pension plan contributions).

Our Emergency Fund is now up to $7,553.01 (50% of goal). Throwing another $1,250 at it on Thursday. We are thinking of moving all of our cash at Tangerine to Meridian Credit Union to take advantage of their much higher interest rates.

I will refocus savings on RRSP once the Emergency Fund goal is reached.


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## BoringInvestor (Sep 12, 2013)

Congrats on the achievements! It seems you and your husband are well on your way to securing financial stability and ultimately financial independence!


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## DividendLuvr (Mar 5, 2014)

Thanks, BoringInvestor! That is our goal 

We are now on track to have our Emergency Fund completed ($15k) by December 1st, one month ahead of our target.

That will allow me to get started on topping up my RRSP ($15,390 in contribution room) early, and have it finished by the end of March.


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## DividendLuvr (Mar 5, 2014)

My savings rate will dip below 50% for the first time this month (47.9%) due to some enforced social spending for work. Will work to return to >50% territory next month.


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## showmethemoney45 (Feb 27, 2015)

DividendLuvr said:


> My savings rate will dip below 50% for the first time this month (47.9%) due to some enforced social spending for work. Will work to return to >50% territory next month.


Don't beat yourself up about it! Still great savings rate...


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## NorthKC (Apr 1, 2013)

Absolutely. Most people struggle to save 10% let alone 50%! 50% savings rate is hard for me to achieve simply because of my income but that fact that you're almost there, I really wouldn't worried. I would worry more if you were hardly saving every month. 
Just don't forget to enjoy a little bit of life. There will be times when you spend more due to timing of expenditures. Relax!


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## james4beach (Nov 15, 2012)

50% savings rate is very difficult to achieve. I have a high income and inexpensive lifestyle, yet I'm still barely able to pull off 50%. See my thread.

My average over my working years has been more like 20% to 30% savings rate, and I consider myself a very serious saver.

So you're doing great!


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## DividendLuvr (Mar 5, 2014)

Thanks to you all for your encouragement!  Definitely not beating myself up - just noting progress to help me stay on track with my plans. I'm very pleased with my savings rate but also my determination to stick to budget and reach my goals. A huge part of that is the CMF community.


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## peterk (May 16, 2010)

That's good to hear. I don't think calculating a monthly savings rate is a very useful metric to be honest. If spending is way up or way down on any given month who cares? Is it any indication that you've failed or achieved? No. So long as long-term you are hitting the targets you have set out to hit you are doing well. I think an annual savings rate is a very good way to measure your progress.


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## james4beach (Nov 15, 2012)

I agree with peterk. I don't sweat the small stuff on the monthly basis. I think what might be the most useful calculation is a rolling 12 month savings rate, i.e. the savings rate for the previous 12 months. In fact I'm going to go back and edit my own thread with that now.


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## DividendLuvr (Mar 5, 2014)

That's a great point, peterk and james4beach. I actually have almost three years of excellent data now, so am going to start tracking on a macro level (and posting about it here, of course).


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## DividendLuvr (Mar 5, 2014)

We've just completed our $15k emergency fund. For me, the balance of this month's savings will be focused on retirement - both TFSA (just over $500 required to top up to $10k for 2015 and max out total contributions) and RRSP (planning to contribute just over $3,800 toward my ~$15k contribution limit). It's a three-pay month, so that always helps fuel our goals!


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## My Own Advisor (Sep 24, 2012)

Excellent work DividendLuvr.

I assume by your statement you have $15k in EF you won't touch, it's for emergencies and not for going to Punta Cana this February  Although the latter would be nice....

Now that your EF is in place, every "extra" dollar can go to TFSA and RRSP contributions. If so, kudos. Once you get both TFSA and RRSP maxed out, you'll really be rollin'.


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## DividendLuvr (Mar 5, 2014)

My Own Advisor said:


> Excellent work DividendLuvr.
> 
> I assume by your statement you have $15k in EF you won't touch, it's for emergencies and not for going to Punta Cana this February  Although the latter would be nice....
> 
> Now that your EF is in place, every "extra" dollar can go to TFSA and RRSP contributions. If so, kudos. Once you get both TFSA and RRSP maxed out, you'll really be rollin'.


Thanks, Mark. Love your blog, by the way!

Yes, it's in a HISA and won't be touched. Vacations are completely separate savings goals for us.

We're going to save $5k in a separate "Curveball Fund" for those non-emergency emergencies (e.g. laptop goes kaput) - but that will be early next year. Need to balance with a bit of retirement.


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## DividendLuvr (Mar 5, 2014)

Projected personal savings this month:

Emergency Fund - $1,018.20 ($15k goal complete)
TFSA - $486.74 (maxing out $41k contribution limit)
RRSP - $3,868.90
Clothing - $200.00

I've also done my forecast for 2016, and will be able to save approximately $44k if all goes according to plan. That will break down to:

TFSA - $5,500.00 (max out)
RRSP - approximately $12k (max out)
Curveball Fund - $3,500.00 (of $5k goal - husband contributing rest)
Vacation - $5,000.00 (of $7.5k goal - husband contributing rest)

The remainder will be invested in non-registered accounts.

We are also planning to move all of our Tangerine savings accounts to Meridian Credit Union to take advantage of their 1.5% HISA.


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## DividendLuvr (Mar 5, 2014)

I have just reviewed my actuals for December and for 2015.

December savings rate: 61.92%
Trailing 12-month savings rate: 48.60%

Now time to start a new year - excited for what lies ahead!

This year I am going to start tracking a lot more data, and look forward to memorializing it all here. 

My husband and I have completed our financial plan for 2016, and are projecting to save a combined total of just under $60k.

Here are our monthly savings goals. I'll be benchmarking against them throughout the year.

January: $4,150
February: $3,450
March: $3,450
April: $7,329
May: $3,450
June: $6,550
July: $9,750
August: $3,750
September: $3,750
October: $3,750
November: $3,750
December: $6,550

Total: $59,679

This does not include the refund triggered by my husband's 2015 RRSP contribution, which will be reinvested in his RRSP. (Will add that in to the April column once we know the number.)

Hoping we can hit $65k saved altogether by the end of 2016.


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## DividendLuvr (Mar 5, 2014)

2016 Savings Plan - January update

Savings this month were slightly lower than anticipated as a $700 paycheque I expected did not arrive. This would have put us over goal. However, I will reschedule it to February so that the overall plan is not affected.

Our Emergency/Curveball Fund (just completed last month) was utilized for the first time this month, as my husband had two close family members require surgery within a week of each other, which necessitated four urgent flights for him to and from Halifax. All turned out well, however - and it was great to not have to worry about the money. We will replenish these dollars as part of our savings plan later this year. 

January: $4,150 (actual: $3,589.84; 44.18% savings rate)
February: $3,450
March: $3,450
April: $7,329
May: $3,450
June: $6,550
July: $9,750
August: $3,750
September: $3,750
October: $3,750
November: $3,750
December: $6,550

Total: $59,679


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## DividendLuvr (Mar 5, 2014)

2016 Savings Plan - February update

A great month for our savings as we were away for almost two weeks (spending money that was already saved for travel purposes), so spending was minimal in certain key categories, like groceries. Our savings for February were focused on retirement (both RRSP and TFSA); bolstering our Curveball Fund (for unnecessary but not emergency expenditures); home improvements; saving for a new computer; and finally a new savings initiative: downpayment. For this latter category, our goal is to save $100k+ in three years while not sacrificing our retirement savings. (We don't want to use any of our RRSP or TFSA funds for a downpayment.) 

January: $4,150 (actual: $3,589.84; 44.18% personal savings rate)
February: $3,450 (actual: $5,193.66; 57.99% personal savings rate)
March: $3,450
April: $7,329
May: $3,450
June: $6,550
July: $9,750
August: $3,750
September: $3,750
October: $3,750
November: $3,750
December: $6,550

Total: $59,679


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## DividendLuvr (Mar 5, 2014)

Negotiated an 11.4% salary increase this year, which will take effect April 1st. I will bank this raise in full and project this will increase our overall savings to $65,812 for the year (an increase of just over $6k).


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## peterk (May 16, 2010)

Awesome raise!

Getting raises sure is the best way to save more money. Cutting costs will only get you so far, and is relatively easy and quick to do, then what? Investment returns are largely out of your control. Getting raises, and nourishing your career and human capital is the key to success!


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## DividendLuvr (Mar 5, 2014)

Thanks, peterk. I'm a bit of a workaholic, but now (age 30) is a damn good time to be one - I will reach my peak earning earlier (and save more $) as a result. I love my profession, which makes it easy.


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## scorpion_ca (Nov 3, 2014)

Out of curiosity ...what is your profession?


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## peterk (May 16, 2010)

DividendLuvr said:


> I'm a bit of a workaholic, but now (age 30) is a damn good time to be one


Work hard in your 20s.

Work smart in your 30s.

Coast down easy street in your 40s.

Retire early .


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## Janus (Oct 23, 2013)

peterk said:


> Work hard in your 20s.
> 
> Work smart in your 30s.
> 
> ...


Hmm I like that!

I can't help but think that working smart in your 30s involves working in a low-tax regime for a few years. Save you years of labour down the line.


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## DividendLuvr (Mar 5, 2014)

Received a nice surprise today: due to a revision in our pay bands, my raise will actually be 16.1%. All of it will be banked!


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## DividendLuvr (Mar 5, 2014)

2016 Savings Plan - March update

March was a relatively expensive month (catching up following our return from vacation and consequent eating out to accommodate long working hours), but we were able to come in on target with respect to our savings. On Tuesday, we receive our tax refunds (all of which will be allocated to savings) so that puts us on track for an exceptional April.

I've also adjusted our projections for June through December to reflect my salary increase. 

January: $4,150 (actual: $3,589.84; 44.18% personal savings rate)
February: $3,450 (actual: $5,193.66; 57.99% personal savings rate)
March: $3,450 (actual: $3,672.64; 42.44% personal savings rate)
April: $8,680.55
May: $3,450
June: $6,550
July: $12,322
August: $4,485
September: $4,485
October: $4,485
November: $4,485
December: $7,930

Total: $69,328.69


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## DividendLuvr (Mar 5, 2014)

2016 Savings Plan - August update

It's been a busy spring and summer and so I haven't had a chance to update this thread. However, this is an ideal time to pause and do so. My husband and I have been diligent savers and that has increased our projections to >$72k for the year. 

Below is the breakdown of our joint savings for 2016 to date (including projections for September through December). My average personal savings rate for the year is 59.45% of net.

January: $4,150 (actual: $3,589.84; 44.18% personal savings rate)
February: $3,450 (actual: $5,193.66; 57.99% personal savings rate)
March: $3,450 (actual: $3,672.64; 42.44% personal savings rate)
April: $8,680.55 (actual: $8,888.27; 67.11% personal savings rate)
May: $3,450 (actual: $3,450; 41.54% personal savings rate)
June: $6,550 (actual: $10,295.46; 69.83% personal savings rate)
July: $12,322 (actual: $10,410.32; 71.80% personal savings rate)
August: $4,485 (actual: $5,571.17; 55.58% personal savings rate)
September: $4,485
October: $4,485
November: $4,485
December: $7,930

Total: $72,456.36

For 2017, we have targeted $75k in savings (will likely be more), broken down as follows:


$50k for downpayment 
$20k for retirement 
$5k for travel
We are aggressively saving for a downpayment as we'd like to have $200k+ to deploy and a very manageable mortgage (that we can pay off quickly). However, we don't want to sacrifice our retirement savings , and have decided to maintain this at $20k/year until the downpayment is complete. At that time, most of the monthly savings allocated to the downpayment will be redirected to retirement (some will be directed to annual lump-sum payments of mortgage principal).

I am starting to track our combined net worth on a monthly basis and will post that once I have some data to share.


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## nobleea (Oct 11, 2013)

DividendLuvr said:


> My average personal savings rate for the year is 59.45% of net.
> Total: $72,456.36


Sorry, is that just your personal savings rate, or does it include your husband's? The denominator in that calculation should be the family net income. Either way, impressive number. Good to see you are putting money away for travel and the like - that's important.


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## DividendLuvr (Mar 5, 2014)

nobleea said:


> Sorry, is that just your personal savings rate, or does it include your husband's? The denominator in that calculation should be the family net income. Either way, impressive number. Good to see you are putting money away for travel and the like - that's important.


Thanks for your encouragement, nobleea. To clarify, the savings rate is my own personal savings rate (not combined), while the savings listed above (including total) are joint.


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