Q2 2015 Update


Things were pretty normal in terms of income in Q2. There were no bonuses or missed paychecks. I did get only about $375 in paychecks though! Probably my lowest paycheck amount ever other than unemployed quarters in the past? My net income was about $300 less than Q1.


In Q2, I only saved 59% of my net pay: depositing 105% of my net pay to various savings accounts and withdrawing about 45% of my net pay from savings accounts to cover spending. My savings deposits were split up to the following accounts:

2015 Q1 Savings Distribution

This quarter, I finished maxing out the pre-tax 401(k) at $18,000. My employer will continue to make their matching contributions every paycheck for the rest of the year, as if I had been contributing each paycheck. I started on the after-tax 401(k) contributions.


Q2 2015 Spending

All in all, I spent $11,706 in Q2, with education taken out. Housing + shopping + clothing added up to 80% of my spending this quarter. The pie chart cut off the legend for the following categories: personal care, recreation, life, and financials.

I had estimated I would spend $8,548 in Q2, so I went $3,415 over my estimate. $2,429 of this was the refurnishing and repainting of my home office. Most of the rest of the overage was extraneous clothing spending. I came in under my estimate in travel, entertainment, food, and transportation. Housing was right on the dot and was high this quarter because of some extra HOA dues and property taxes. Food and entertainment were mostly under because my boyfriend has been picking up those costs with our current expenses arrangement.

For kicks: I spent $87.37 on transportation in Q2, which bought me two tanks of gas, one Uber/Lyft/taxi ride home from somewhere, and a top up to my prepaid tolls account. Living in the city has some frugal benefits! I also spent a whopping $10.32 on travel and $157.61 on entertainment for the entire quarter. I spent $211 on average in 2014 on entertainment, MONTHLY. My food costs were also about half of what they were in Q1.

With the overages this quarter, I estimate that I am on track to spend $42,190 this year overall, which is about $4,083 over my original estimate or an 11% increase.

I’m not going into too much detail here since you can see that in my monthly reports.


Let’s check in on my goals from the beginning of the year:

1) Enjoy living together! Have an awesome trip to NZ! ON TRACK! Living together is going great overall. It’s definitely taking some time to get the place to a point where it feels more like things were chosen by both of us.

2) Contribute the maximum to all tax-advantaged accounts available to me. This means $5,500 in a Backdoor Roth IRA, $18,000 in a pre-tax 401(k) and possibly some additional funds to the after-tax 401(k) and possibly my 2016 Roth IRA amount in a savings account ready to deploy in January. This will account for probably about 2/3 of my savings in 2015. ON TRACK! I’m done with the Backdoor Roth IRA, the pre-tax 401(k), and have started on the after-tax 401(k).

3) Learn the ropes at my new company and have an awesome first year! ON TRACK! Things are going great so far. I like my group and things seem to be much less toxic than in my previous company. I’m really optimistic about how things are going!

4) Exercise for at least 45 minutes per day. My phone is really helpful at tracking this for me! ON TRACK! I’ve exercised for an average of 53 minutes per day according to my phone. February was the best month with the traveling!

5) Go to the gym (or run) three times per week. FAIL! This is just a flat out fail. I’ve managed to lose some of the stress weight from my last job and get a reasonable amount of general exercise and outside time (yay city life!), so I’m fine with this.

6) Contribute enough to a Health Savings Account such that Out Of Pocket Maximum ~= Current HSA balance + Employer contribution + my contribution. ON TRACK! I may increase this once my after-tax 401(k) is done for the year, we’ll see.

7) Succeed at Operation Bayes – I’ll explain this later. SUCCESS! Now you all know that this was applying to and getting into grad school, which I did successfully! Yay!

8) Spend under $40,000. FAIL! I’m now on track to spend $42,000 this year.

9) Save 70% of my net income monthly…and 100% of my bonuses. (Yay for a big raise that will allow me to save that much of my monthly income!) NO IDEABetween the ESPP, lump sum contributions to my 401(k), etc. this got far more complicated to calculate in the same way that I was doing before. So far, I’ve saved 69% of my net income overall.

10) Contribute the maximum that I can to the Employee Stock Purchase Plan. ON TRACK! Definitely doing this.

11) Pay down the mortgage with any funds that are leftover after 2), including the proceeds of 10). NOT HAPPENING! I’m reasonably confident at this point that I will not make any extra mortgage payments in 2015, mostly due to two months of no income, setting aside money for grad school, increasing my emergency fund, and maxing out my after-tax 401(k). All of those things took….$85,000. Wow!

12 thoughts on “Q2 2015 Update

  1. I share a lot of your goals and most of our savings goes 401k / IRA. I actually find it really confusing to calculate something as simple as after tax savings rate, when you have pre-tax 401k, employer match, stock grants from employer, then post-tax savings. You have to kind of guess at the best method. I count the employer match and stock grants which is probably not the MMM way.

    • The main thing I try to do is be consistent so it can be compared year-over-year. I calculate savings rate as (total savings) / (net pay) with those being:
      * total savings = pre-tax 401(k) + after-tax 401(k) + my HSA contributions + mortgage regular principal + mortgage extra principal + ESPP contributions + cash savings contributions + taxable investment contributions – cash savings withdrawals – ESPP withdrawals
      * net pay = gross salary + gross stock awards that vested in the period + gross cash bonuses – all taxes from paychecks + income tax refund + ESPP discount + other misc taxable income like fitness stuff + tuition reimbursements

      I don’t count: employer 401(k) match, employer HSA contributions, HSA withdrawals, interest, dividends, or credit card dividends (well some times). The main reason that I don’t count the employer 401(k) match or HSA contributions is that that money can’t go anywhere other than where my employer puts it. And in the case of the employer HSA contributions, I didn’t ask to get it. I do keep track of these things in my spreadsheet though.

      Next year, cash flow is going to get really interesting. Between grad school tuition reimbursements, ESPP, stock vesting, and front loading contributions to retirement accounts, I won’t actually need my paycheck for most of the year. Pretty crazy!

    • I’d have to agree with you Adam about the complications of calculating it. I’m kind of out of the norm as it’s not a statistic I pay particular attention to. Every year as my compensation rises, so does my savings rate (as long as I keep the lifestyle creep at bay), and my income and expenses can be very lumpy throughout the year. This year I shot for total savings goals for each type of account, max out 401k, HSA, and IRA, and then set a number for after-tax contributions. Personally, that works better for me.

      Leigh – great first half of the year! Very motivating.

      • Thanks, FF!

        Yup, income and expenses can be pretty lumpy. That’s why, in the past, I tracked the savings rate for bonuses and regular monthly pay separately. Total savings goals works too – something different works for everyone. I like to know how much/little of my income I’m living off of though. I use my budget to help smooth out expenses which generally helps to keep my savings rate more consistent month-to-month, so lumpy expenses don’t affect my savings rate unless they’re unexpected.

    • Thanks! Ooooh congrats on almost having a 401(k) – they are pretty sweet! I love the tax deduction of pre-tax 401(k) contributions. After-tax 401(k) contributions are beyond the $18,000 pre-tax or Roth limit, so sort of like a non-deductible Traditional IRA and I can then transfer the money to my Roth IRA. It’s pretty cool. I haven’t seen too many employers that do this – my previous employer didn’t. TFB wrote a series on it last year: http://thefinancebuff.com/rollover-after-tax-to-roth.html

      • Unfortunately I’m going from a better retirement plan (contribution equal to 15% gross automatically going into SEP) to 5% match 80 cents on the dollar. I’ve been told our salaries will be increased to compensate, but I’ll believe it when I see it.

        • Oh interesting. Well if it were me, I would much prefer a 401(k) over a SEP because you can’t do the Backdoor Roth IRA with a SEP IRA!

  2. I have given up on the typical budgeting and tracking metrics in general as it has become cumbersome and I don’t like sitting down messing around with the numbers and data and compiling it…

    My hard and fast rule is that I MAX out all retirement savings accounts (401k, HSA, Roth IRA)… I have recurring contributions to my E*TRADE and Vanguard Brokerage accounts that amount to about $8k/ year. I also round my mortgage payment up to the nearest whole $100.. (example: My payment of 1,027.45 would be set at 1,100.00 each month) It’s not a lot extra, but each bit counts.

    I find I always have at times extra cash in my checking account and about 3-5 times a year I’ll go in assess my individual stocks (mostly Dividend growth stocks) and either buy in more for a lower cost basis if I still like and want to own long term.. Or I will do some research and buy one of several companies still on my list that I want to be an individual stock holder of and I will make a purchase and start building a position.

    After all is said and done I live on what is left over and continue to minimize expenses where I can, thus creating future investing opportunities.

    My finances remain on a upward trajectory and that is what I look for mostly. I just let the sort term fluctuations ride out..

    I’m currently looking to invest directly in the craft beer industry in both financial and physical work capacity if anyone is looking for a partner as well.

    cheers to freedom!!!!

    • What a great description of a simple way to run your finances when you’re not interested in the details at that time in your life! Good luck with the craft beer industry investment – that sounds pretty cool!

      I’m definitely reasonably detail oriented, so no matter how busy I get, I’ll always make time for some financial tracking.

  3. Very impressive. We’re not on track to max out the IRA because we’re having to save $25,000 for my husband’s dental implants this year. Next year — assuming things don’t take a sharp detour — is the year of the fully-funded SEP. Granted, it sounds like our income levels are somewhat different. (I always think I make really good money, then I read this kind of stuff. But we still get by comfortably.)

    Hopefully, I’ll have some impressive numbers to report myself next year.

    • This year, I should make somewhere in the mid-100s range. The more important takeaway from my post is that I set some goals at the beginning of the year and how I’m tracking mostly towards them than the $ amount of them.

      Detours happen. I was planning paying off the mortgage this year, until I decided to change jobs, take two months off unpaid, put more money into retirement accounts, and go to grad school… So I am VERY short of that goal.

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