10% Savings

This month, I’m going to try that 10% rule: Pay yourself first by depositing 10% of your income into savings. I don’t know how successful I’ll be, since our bills are quite high, and our income has slowed down over the last couple of months. However, I see the need to do this.  Over the summer, there were a few instances where we had to dip into our “house savings”. Good thing we had this savings account set aside. We would have sank into debt had that money not been there.

However, now we are almost back to square one: having to save for our down payment again. It doesn’t help that we still have one large client invoice that is outstanding. Hopefully, by the time we receive that payment, we can stuff most of it into savings. So, my current plan is to set aside 10% of what I know is coming in, then to add an additional 10% to any other income that we make over the next month.

My first strategy is clearly outlining my budget. You can see my total monthly budget here. This month, I can count on having a total of $1,000 left over, even after I’ve deducted all of our bills from our known salary. Most of the left over funds will be deposited into our savings account. But first, I will probably take $300 or $400 out of this for an extra payment to pay down our line of credit, our highest interest and remaining debt. My student loan and car loan payments are factored into my monthly budget, so I won’t be making any extra payments this month.

Then, if any additional client invoices roll in this month, or we book a few more jobs, my goal is to shove at least 50% of this income into savings. I’m being realistic, I don’t want to say I’m going to put it all into savings. I also like to plan ahead for the upcoming month’s bills, meaning December. If any extra expense comes up, like say, the holidays, I’ll have some extra money in my account that I can use towards these items.

So far, a few small  invoices have come in this past week (or are about to be deposited or paid), and I’ve been good sticking with the 10% rule:

• client invoices totaling $154 = $15 went into savings
• client invoice totaling $140 = $14 to be deposited into savings this week
• upcoming invoice due this week $500 = $50 to be deposited into savings this week

By Saturday, I should be able to schedule a transfer of $64 into savings. It’s small, but a start!