October 2021 Monthly Recap
Every month I do a recap of my goals, budget, and savings. This recap helps me to see how I am progressing in those areas of my finances and determine how well I’m doing. Then, if needed, I can make adjustments for the next month. Now, without further ado, here is my October 2021 monthly recap.
Goals
Every month, I like to set five goals to accomplish. One in personal finance, health, social, learning and career/business. A goal is a future envision, result, or experience that is planned to be achieved. We all have things we want to achieve, but until we have a plan, those wants are wishes, not goals. For October 2021, my goals were:
- Spend $100 or less eating out
- Run 1 mile 4x a week
- Call 1 friend each Saturday
- Read for 30 minutes a day
- Post 1 blog post a week
I spent $82.61eating out, coming in below the target of $100. To achieve this goal, I tracked my spending and planned meals. By setting a routine, I ran 1 mile 4x a week and if something came up to miss a day; I made it up. I called a friend one Saturday but failed on the others due to not setting a time and who. This led me to not achieve my goal of calling 1 friend each Saturday. I read but not consistently due to not having a set schedule. This caused me to not achieve my goal of reading for 30 minutes a day. My blog calendar for the rest of the year is set, and I achieved my goal of posting 1 blog post a week.
Budget
A budget is a plan of how income is spent. As the saying goes, “A failure to plan is a plan to fail.” I use a zero-based budget, meaning my budget equals my income. So, even if income goes up or down, all my income is planned. Thus, I budget based on what I have and not what I wish I had. I review my budget every week to track spending and make adjustments quickly. At the end of each month, I review my budget to identify problems and improvements, track progress of goals, and plan for the next month.
In October, I made a few changes to my budget. Reduced my discretionary spending so my wife could quit her job to be a realtor full time. Captured all income details: gross, taxes, and payroll deductions to see where my money is going. Added percentage targets to better control my spending.
For October, I had a gross income of $8,207.83 with $1642.41 (20%) held for taxes, leaving $6,565.42 in disposable income. From the disposable income, $812.48 was invested, $98.26 covered health and insurance, and $263.02 covered my company lease car. Leaving $5391.60 in net income aka take home pay.
From my net income of $5391.60, $4,882.29 (93%) was planned for October and $314.23 (4%) was rolled over into November. Usually I would assign any extra income to investments or savings. But with my wife switching careers, I want to stretch the income as long as possible before tapping saving funds.
Of my 14 budget categories, 1 had overspending, 4 had savings, and 9 met spending. Despite having 1 budget category with overspending, I didn’t spend more than my income. This is one of the powers of the zero-based budget and adjusting the plan to where you need the money. I don’t dwell too much on overspending, because life isn’t perfect. But I monitor it to see if I need to make any adjustments. I improved on eating out but still overspent by $134.46 (2%). This was caused by stocking up on some bulk items.
Saving & Investing
To me, the fundamental purpose of a budget is to save and invest money. Saving is setting money aside for one of the three types of savings: emergency, goal, and irregular expense. Investing is using a resource (time, money, energy) with the expectation of achieving a future benefit or gain. I like to separate my savings and investing rates to see how much of my money is going towards short-term goals and long-term goals.
Savings rate = (retirement contributions + employer retirement contributions + non-retirement savings)/disposable income
In October, I started calculating my savings rate according to the BEA. This will allow me to see how I compare to the average savings rate in America. For October, my savings rate was 17% at $1,109.97. I contributed $612.48 to 401k, $200 to HSA, $70 to Roth IRA, and $30 into Wize Money. Employer retirement contributions totaled $284.6.
WIZE Investing rate = investments/gross income
I am also interested in how much of my gross income is being invested with a target to get to 20% or higher. My WIZE investing rate in October was 11%. If I include employer contributions, my WIZE investing rate jumps to 14%. I’m still debating which number I want to use. What’s your thought?
Recap
By reviewing my finances monthly, I determine if I am improving or not and adjust my plan as needed. Month to month, my finances, goals, or priorities can change and that’s okay. I make sure my plans align with any changes. Well, that’s a wrap on my monthly recap.
Tip:
Do a monthly recap to to see how you are doing with your finances.