Earned Income Savings Percentage: January 2008 (0%)
I currently have some old fashioned views on personal finance and I believe that saving as much of your income as possible is a sure fire way to financial independence.
As someone who is currently trying to climb out of debt, saving a larger and larger portion of our income has proved to be the most difficult part of trying to get ahead.
Since how much we can save is such an important part of our family’s financial health I thought I should do a better job of following this information each month.
So, new for 2008 is our Earned Income Savings Percentage!
As you can see, we are not off to a great start in January:
I chose to base the calculation on my Earned Income for a couple reasons:
- First, the majority of Americans only have earned income to contribute to savings
- Second, my alternative income is not very stable or accessible for placing in accounts
For a comparison, I included our finances from the month of December. Here is some insight to those numbers:
December was an abnormal month for us financially.
- Our Salary Income was relatively stable for the month, with a slight bump in our Alternative Income
- Our Monthly Expenses we much higher than normal due to my Private School Loan repayment
- We were able to contribute such a large sum of money to savings due to a 0% balance transfer
In January we saw an increase in our day to day living expense due to increased insurance costs and some travel plans for the spring. This increase in living expenses and my desire to make contributions in lump sums kept us from contributing anything for the month of January
In the past two months we have gone from saving 96% of our income to saving 0% our our income. When it averages out a realistic goal for 2008 will be for us to be saving about 10% of our gross income.
As I progress up the food chain and become fully salaried I hope to push this number to 50% or more but only time will tell. I may be a bit optimistic with those numbers but aiming high never hurt.
