I’ve been bad. I’ve been calculating my savings and net income always including my bonuses, which totally inflates my savings rate since I save 100% of those. My savings rate based solely on my net pay for this year is hovering closer to 40%. I don’t think that there is any way I’m going to make up the difference at this point in the year, so I decided to start focusing on next year’s spending plan. I’m also giving myself a pass for this year considering that how much I spent on moving would get me pretty close to a 50% savings rate for the year and I’m pretty hopeful that I won’t move next year.
I’ve been working on my 2013 spending plan. So far, it looks somewhat like this:
In order to get savings up to 50%, I need to bring the expenses down by about $250/month. Then I started racking my brain because I could have sworn that earlier this year, I did have a 50% savings rate when I was renting. It turned out that my housing costs went up about about $200/month going from renting to owning (but they would have anyways had I kept renting), which covered most of the difference. My cost-of-living raise that I will hopefully get will help somewhat with the missing $250/month, but some of my categories (especially the food ones) are ceilings, which means that I don’t actually spend up to the budget. So I am reasonably confident that I’ll be able to find $250/month to hit 50% savings next year.
The scary part about the above chart is just how much housing takes out of this pie chart. About 20% of the entire pie chart is my mortgage payment alone. Every category other than housing and savings are under 10% by themselves, including non-mortgage housing.
I’m going to use my first quarter bonus next year to fill my Roth IRA for 2012 and for 2013, so the savings that you see in the spending plan is for maxing out my 401(k) at $17,500 and mortgage pre-payments. That doesn’t come near the five-year end-of-2013 mortgage balance plan, but I think I can find the extra $20,000 to be on track with the mortgage in my bonuses after filling up the Roth IRAs in the first quarter.
I’m not exactly sure what my taxes and take home pay will look like yet for 2013, so I’ll take another stab at estimating my savings for the year once I know that in late January.
I’ve also been working on my 2013 goals, which I’ll share with you guys in another couple months. I can’t believe it’s already almost November!
Readers, have you started to look ahead to 2013? What does it look like for you?