Author Topic: I (technically) had over 100% savings rate this month  (Read 745 times)

TexasRunner

  • Pencil Stache
  • ****
  • Posts: 802
  • Location: Somewhere in Tejas
I (technically) had over 100% savings rate this month
« on: November 01, 2018, 08:48:04 AM »
In my tracking spreadsheet, I calculate monthly growth of net worth.  I then calc the savings rate from <Monthly Savings Amount>/(<Annual income>/12) to get a basic view of my savings rate.

Technically it is a glitch because I made about a thousand more in commissions than I normally do, but I saved 109% of my monthly income when compared to the average month.  (IE above average month + low spending = more saved than I typically make per month).

Sweet!!!


TheAnonOne

  • Handlebar Stache
  • *****
  • Posts: 1420
Re: I (technically) had over 100% savings rate this month
« Reply #1 on: November 01, 2018, 09:01:10 AM »
I can make the argument that you are just doing the math wrong but either way it sounds like high 90s rate.

Good job!

DS

  • Pencil Stache
  • ****
  • Posts: 591
Re: I (technically) had over 100% savings rate this month
« Reply #2 on: November 01, 2018, 09:12:52 AM »
I can make the argument that you are just doing the math wrong but either way it sounds like high 90s rate.

Good job!

Yeah, should be added to numerator and denominator. If next month you make 300,000 more in commissions than you normally do will it be 300+ times higher?

But either way this is high! Did you pre-purchase some things in the previous month or is this an ongoing trend?

TexasRunner

  • Pencil Stache
  • ****
  • Posts: 802
  • Location: Somewhere in Tejas
Re: I (technically) had over 100% savings rate this month
« Reply #3 on: November 01, 2018, 10:16:18 AM »
I can make the argument that you are just doing the math wrong but either way it sounds like high 90s rate.

Good job!

Yeah, should be added to numerator and denominator. If next month you make 300,000 more in commissions than you normally do will it be 300+ times higher?

But either way this is high! Did you pre-purchase some things in the previous month or is this an ongoing trend?

I know I'm doing the math wrong because the numerator is a basic numerical value for that one month (IE "Savings") and the denominator is an updated monthly average based on annualized income (IE, 11 months at 1k a month and 1 month at 10k would be 21k a year or 1.75k a month average - which doesn't work for that one 10k month, but helps me see our pace for the whole year)).  A true saving rate would be "Month Savings" over "Month Income" (which still nets 96.9% savings rate:  IE $6,886 saved over $7,100 earned) but still that's high.

It seems we bought monthly groceries right at the end of September, I pre-pay my water/utilities online in 600$ batches to avoid the $6.50 online fee for payment which means nothing was paid towards utilities, we only went to the next town over once which reduced our gas consumption, the gas bill was only $18 for the water heater, the electric bill didn't process until today for some reason, and other spending was pretty low for us.  Almost a spend-nothing month (by accident).  The net result was a 96.6% true savings rate (or 108% based on average monthly income).

Don't be too impressed though, because our average savings rate is only 38.6%.  Thanks to the electric bill 'migration' into the next month and needing groceries again, this month's savings rate will be much lower.

DreamFIRE

  • Handlebar Stache
  • *****
  • Posts: 1311
Re: I (technically) had over 100% savings rate this month
« Reply #4 on: November 02, 2018, 05:36:57 PM »

I only calculate savings rate for the calendar year rather than calculating the individual months.  Relevant thread using the MMM formula:

https://forum.mrmoneymustache.com/share-your-badassity/my-savings-rate-for-2018-90242/

BicycleB

  • Bristles
  • ***
  • Posts: 291
  • Location: Live Music Capital of the World
  • Older than the internet, but not wiser... yet
Re: I (technically) had over 100% savings rate this month
« Reply #5 on: November 03, 2018, 08:05:46 AM »
@TexasRunner, I am 100% impressed at your healthy savings... and 109% amused by your calculations!    :)
« Last Edit: November 03, 2018, 08:07:45 AM by BicycleB »

TexasRunner

  • Pencil Stache
  • ****
  • Posts: 802
  • Location: Somewhere in Tejas
Re: I (technically) had over 100% savings rate this month
« Reply #6 on: November 05, 2018, 07:57:24 AM »
@TexasRunner, I am 100% impressed at your healthy savings... and 109% amused by your calculations!    :)

LOL.

So yes, using the monthly income vs the average monthly income makes it 96% instead of 107%, but I'm still happy with it... 
I was including the newest month's earnings in the denominator:

(Total Earnings To Date)/(Current month to date) 

IE Average monthly income.  I have now fixed it where it only looks at one month's income in the savings rate, and will probably add another column to track the annual savings rates.  Those should be much more balanced.