Another month has passed since my last financial report. Just up around a little $600 more, but that’s still a 5% increase on our Net Worth! This is still a bit slower that I would have expected but that’s still a progress. Nothing particular happened this month, except the fact that we still spent way too much mainly due to Christmas time coming up and our expected visit back in our family (yay for expensive plane ticket!). For the end of the year, my goal is to reach $12,000 for our combined Net Worth, and to steadily increase our recurring contributions to reach at least $600 per month (including my contributions towards my pension). But first things first, let’s talk about my November 2016 financial report.
If you have already read the following introduction section at least once, feel free to skip down to the juicy new content starting here: Financial Report November 2016.
Once a month I’m publishing a detailed report regarding my financiail stats, in which I try to reflect over the past month – what went well or what didn’t go as planned. This also allows me to stay motivated towards the dream of being financially independent someday. My goal with these monthly reports is also transparency and I’d like my readers to emulate my successes and avoid my failures.
It feels kind of strange to publish all my financial details here, but it’s also a very motivating feeling. We have all pretty much different backgrounds regarding finances, but hopefully my detailed reports will motivate you to keep on pushing hard. Whether it is to start a website, or at the very least to start tracking your Net Worth, you can’t go wrong here as there are no bad choices! You can check out my favorite resources if you don’t know where to begin with.
My go-to tool to track all the data to generate these reports are extracted from my Mint account. I find it really easy to budget / analyze and visualize the trends, and I’m also a big fan of their iOS App! A nice feature is that it can be integrated very easily with Wealthsimple (where I have my RRSP account), giving me a complete overall view of my finances.
All stats on this report are combined for Mrs. FFG and I, and are in Canadian dollars, as I’m currently living in Canada.
As this is still one of my first detailed report, I’m trying to summarize as many metrics as possible, all of which I find relevant for my long-term tracking purposes. Here is a list of the sub parts of my report (you can click on each link to reach directly one specific part):
- November 2016 Income
- November 2016 Expenses
- November 2016 Investments & Savings
- November 2016 Net Worth
- November 2016 Savings Rate & Withdrawal Rate
- November 2016 Summary
- November 2016 Financial Goals
If you’re interested, all the reports I have written since I started this website are listed on my financial stats page!
So here it is, my complete financial report of November 2016. I hope you’ll find it inspiring, and perhaps this will motivate you to start your own website.
November 2016 Income
Both Mrs. FFG and I are paid biweekly, and I also have twice a year a variable bonus (in February and in July). Our income in November was once again really standard. On the positive side, as we nearly reached the end of the year, I finally maxed up some government taxes for the current year, hence why I do get a few hundred more dollars per paycheck, who doesn’t love a temporary raise?
Next month will be a three paycheck month, which should help in offsetting a bit of all this Christmas frenzy shopping! Also, as Mrs. FFG is reaching the end of her PhD, tuition fees have already dropped drastically as she already took all of the *expensive* courses required.
But let’s focus on the current month first!
Total Gross Income November 2016: $5,938
- Previous Month: $5,920
- Difference: +$18
Total Gross Income Year to Date: $77,097
November 2016 Expenses
Expenses in October were quite the same as last month, but still way too high for what I would have hoped for. After tweaking our budgets for a couple weeks, I think that we can be aiming at $4,000 per month, starting next year, for all of our planned expenses. This is still a *work in progress* but I’ll try to adjust my budget to make this work with such a figure.
This is our usual rent payment, as we are still renting until June 2017.
- Previous month: $1,175
- Difference: $0
Bills & Utilities: $469
This includes most of our bills such as Internet, electricity, TV, cell phones and Netflix. This category is still really high this month as I changed my phone a few weeks ago and that’s the payment which was delayed.
- Previous month: $324
- Difference: +$145
Auto & Transport: $489
This includes our car payment (we’re currently on a long-term lease), car insurance, fuel and parking. Our car lease is due on May next year so we’ll be planning in the next few months to replace it (or buy at term? We’re still debating). It’s a little bit higher than the previous month, as I had to travel a lot for work, so that’s mainly fuel-related expenses, which will be reimbursed soon.
- Previous month: $331
- Difference: +$158
Health & Fitness: $86
Everything medical and sport-related is included in this category. Nothing special happened here this month, besides our usual pharmacy shopping and fitness memberships.
- Previous month: $107
- Difference: -$21
Food & Dining: $729
This budget includes everything related to food, such as dining out and drinking out as well as groceries. Last month I said that I would like to keep this one under $800/month. I’m proud to say that this is the first month since a long time that we reached such a milestone! I’m excited to see that we achieved it without much effort. Hopefully this one will keep being under $800 per month from now on.
- Previous month: $1,039
- Difference: -$310
Everything related to flights, hotel booking, Airbnb and travel-related expenses. As we booked our flight at the end of last month and because I used some reward-miles, we were charged twice, that’s why this still appear as a high spending category. This month we also finalized most of our Christmas gifts, so hopefully next month will drastically decrease.
- Previous month: $900
- Difference: +$400
Shopping & Entertainment: $353
This one includes everything related to shopping, entertainment, gifts and discretionary spending. I included in this category some business-related stuff, like the SSL certificate I just got from Bluehost, as I wanted to have a SSL enabled website. Yeah I know, it sounds kind of geeky to have already migrated from HTTP to HTTPS, since this blog is still *young*, but it’s all part of my website improvement schedule, which I’ll be detailing in a post soon.
- Previous month: $552
- Difference: -$199
Total Expenses November 2016: $4,601
- Previous Month: $4,428
- Difference: +$173
Total Expenses Year to Date: $61,903
Expenses were relatively heavy for this month and the last one but we had to buy our flight ticket for Christmas and we nearly bought all of our christmas gifts. So, hopefully, expenses will stay low until next year and I would like to reach a maximum of $4k expenses per month from now on.
November 2016 Investments & Savings
We’re currently investing and saving in three different ways:
- My employer Simplified Pension Plan (SIPP), which offers a 100% match of my contributions, up to 2% of my salary (pre-tax). I’ve been contributing to get the maximum match from my employer since I started working in the company (that’s basically free money which you don’t get if you don’t contribute!)
- I also recently opened a Registered Retirement Savings Plan (RRSP) account with Wealthsimple, in which I contribute at least $50 per paycheck (post-tax).
- I started an emergency fund in an High Interest Savings Account (HISA) with our bank (only a little 0.75% interest rate) in which I contribute at least $50 per paycheck.
Besides my recurring contributions, I was also able to contribute $100 more to my Wealthsimple account this month.
- SIPP Account (employer): +$89
- SIPP Account (employee): +$89
- RRSP Account (Wealthsimple): +$200
- Emergency Fund (bank): +$100
Total Investments & Savings November 2016: +$478
- Previous Month: +$428
- Difference: +$50
Total Investments & Savings Year to Date: +$4,366
November 2016 Net Worth
My long-term goal would be to build up a Net Worth of $2M returning 4% a year or $80,000/year in gross income.
We are still nowhere close to reaching such a long-term goal, however I’m pretty sure that we will be seeing some huge improvements in the next few months if we keep ourselves disciplined. This is still a moving target as I’ll be working towards a clear number in the next few months. I’ve already written about the first half of a detailed post regarding what would be a *correct* number for us and I’ll try to finalize it soon, so stay tuned!
As we do not have any liabilities anymore since I paid off our $27,000 student loan debt, we’re still working on improving our assets now!
- SIPP Account (employer & employee): $9,159
- RRSP Account (Wealthsimple): $1,046
- Emergency Fund (bank): $1,153
Net Worth November 2016: $11,358
Net Worth short-term goal: 11.35%
Net Worth long-term goal: 0.57%
My short-term goal is to reach a Net Worth of $100,000 which should be a first good *baby* step. We’re currently at 11.35% on my short-term goal and a really low 0.57% on my long-term one. It seems like an unreachable figure at the moment, but I’m looking for the big picture here. I’ve always performed better with a goal in mind, so there’s no exception to my personal finances!
November 2016 Savings Rate & Withdrawal Rate
In terms of savings, we aimed at a 15% Net Savings Rate, which should be reached starting January, and then we might try to up it to 20%!
Regarding our Net Savings Rate calculation, here is the breakdown of the formula that works for us:
Net Savings Rate = Savings / (Gross Income – Taxes + Pre-Tax Contributions)
My pre-tax contributions (employer) are included in both sides of the equation to have a better view of our *real* savings rate.
- November 2016 Savings: $478
- November 2016 Gross Income: $5,938
- November 2016 Taxes: $1,037
- November 2016 Pre-Tax Contributions: $178
Net Savings Rate: 478 / (5938 – 1037 + 178)
Net Savings Rate November 2016: 9.41%
- Previous Month: 8.81%
- Difference: +0.6%
Net Savings Rate Year to Date: 8.01%
The last few months, our Net Savings Rate kept increasing and we’re slowly on our way to reach a 10% savings rate … which is not that far from our short-term goal of 15% (should probably reach this one starting next year). We only recently started to automate our savings, as we’ve set up recurring transfers to our savings account and to my Wealthsimple account. I’ve already started to up both these contributions and this should help to reach such a goal quickly.
As a big fan of spreadsheet and crunching numbers, I’m also measuring an interesting metric, which is Withdrawal Rate. Its purpose is to track the ratio between Expenses and Net Worth, which measures how much one is spending versus his Net Worth.
- 2016 Year to Date Expenses: $61,903
- November 2016 Net Worth: $11,358
Withdrawal Rate November 2016: 545%
November 2016 Summary
I really like the concept of zero-based budget. In a nutshell, it is really simple as you just have to get to “income minus outgo is equal to zero”. This is a way to figure out where everything you earn is going. Not knowing this is what makes a lot of people’s money situations complicated. Keeping this in mind, let’s summarize where our gross income for the month of November 2016 went to:
- Gross Income (I): $5,938
- Expenses (E): $4,601
- Investments & Savings Post-Tax (S): $300
- Taxes (T): $1,037
- Transfer from Savings (TR): $0
As a zero-based approach, here are the details:
I – E – S – T + TR = $5,938 – $4,601 – $300 – $1,037 + $0 = $0
So here it is, a total which equals to zero! This month was still a heavy one on the expenses side, as we’re already approaching Christmas time and we do have quite a big family. Still, it feels good not having to dip into our savings anymore!
November 2016 Financial Goals
Since the last two months, I have started writing down a few financial goals which I had in mind. I’ll be detailing month after month my progress on these goals:
- Increase our emergency funds. NOT OK! I failed this one, as I only contributed my regular $50 per paycheck. I’ll try to catch up this one next month and starting next year I will try to increase it to $100 per paycheck.
- Increase contributions to my RRSP account with Wealthsimple. OK! It seems like I can’t increase both my contributions to my RRSP and my emergency funds at the same time .. That’s still a positive goal as I doubled my contributions to Wealthsimple this month. I’am also aiming at keeping a steady $100 transfer per paycheck to my RRSP account starting this month!
- Save at least 15% of our income. NOT OK! We nearly made it to 10% this month. That’s still a good percentage, and I’ll try to reach 10% and more (with 15% as a short-term goal) in the next few months.
- Create more realistic monthly budgets. OK! It’s been two months in a row that I nearly had nothing to tune regarding my expected budgets versus what has really been spent. I’m still unsure regarding how I should present those figures, but for the time being I like to only show the big numbers for the different categories. I might improve my financial reports in the next few months though.
And that’s it for my detailed financial report for November 2016! I hope I’ve inspired you with this report (my complete list of reports are listed on my financial stats page), and that you had as much fun looking at mine as I had looking at others! Remember that it’s not a race though, even if the journey seems like a marathon sometimes.
It took me a few months before starting a website, but this really helped me to focus on my long-term goal of reaching financial independence. Everyone has to take the first steps if they are willing to reach financial freedom, and I’m convinced that everyone with the right resources and some reading can reach its goal.