One of the financial goals that I have decided to share is that we try to live on only half of our single income.
It turns out that we're not alone. Budgets Are Sexy "Proof You Can Live off 50% of Your Income" came out this week and showcases a number of readers who are making living off one income work.
Living off half of our income has meant that we're not only able to stay out of consumer debt and get to the end of the month before we get to the end of the money, but also that we're on track to pay off our mortgage in our mid thirties and have opened up so many possibilities that wouldn't be possible otherwise.
Now, I'm not sure I've ever given a specific savings percentage.
- Because everyone seems to have different definitions of how you should calculate your savings rate.
- Because our money tracking system isn't as robust as I'd like it to be so I can't get the numbers I want quickly.
Heads up: expect a review of some budget tracking tools by the end of the year!
Because I'm not actually tracking a savings rate, I haven't been able to say for sure that we're hitting our target.
The Challenge is ON!
Yesterday I congratulated Alicia from Financial Diffraction about her 50% savings rate on Twitter. One thing lead to another and I got sucked into a conversation that lead to me agreeing to participate in Moneystepper's 2015 Savings Challenge. (actually I'm pretty excited)
The Challenge lets you set your own targets for your savings rate and net worth increases.
My 2015 challenge for myself is to have a 50% savings rate and to increase our net worth by 8%.
As I was signing up and trying to fit our finances into someone else's predetermined boxes, I realized that there were some fun quirks for our situation.
- My Mr. has a defined benefit pension plan that has employee and employer contributions. I added the employer match into our income and used the full contribution as savings.
- We also have an education savings plan for our Little Miss, but the money is technically ours, so that was a fun choice too.
- When I was asked to pick a range for my net worth I realized that I should convert from the Canadian dollar. Canada's not at par any more!
Over the years we've followed our three rules to stay in control of our finances and we've got to a point where we can comfortably live off half of only one income. Living well within our means has opened up so many exciting possibilities.
With the new year coming, it's the perfect time to evaluate your finances and start looking to the future. I feel like we need to have more concrete goals and monitoring. Joining Moneystepper's 2015 Savings Challenge will force us to be more accountable.
Results will be published monthly and you can follow along if you want to see how we do. Better yet, YOU can sign up too and we can do this together!
What About You?
Do you track your savings rate and net worth?
What do you do to be accountable for reaching your goals?
Do you use a budget tracking tool?
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