Home > Financial Updates > Financial Update – Q3 2012

Financial Update – Q3 2012

I know this is about a month late, but better late than never.

I like to take a look at my spending, saving, and net worth every quarter to see how I’m performing year over year.  My goal is to hit a 50% after tax savings rate for 2012.  In 2011 it was 20% so this is a fairly aggressive goal.  Go big or go home!

So let’s compare YTD 2011 to YTD 2012


As you can see, I’ve been able to make some positive changes.  My income increase can be explained by the raise I received in 2012 as well as an extra pay-period.  The little bit of freelance energy auditing work I’ve done on the side didn’t even really make a dent.

I think I’m doing the right sorts of things to grow my income.  I’m working long hours when it’s required, taking on other people’s work when they fail to do it, and generally exceeding expectations.  As long as I’m kicking ass and taking names on the job, my salary will take care of itself (that’s the theory).

So I’m already doing what I can to grow my income.  The really exciting piece comes from what I changed on the spending side.


Through three quarters, I’ve increased my savings rate from 23% to 49%.  I’m excited to see what a strong fourth quarter might do to my savings rate.  I might get close to 55%  for the year if I avoid any large purchases around the holidays.  I’ll report on my annual progress in the new year.

So how was Q3 2012 different than Q3 2011.  My spending when from $7,889 to $4,384.  The three categories that saw the large changes were Food, Shopping, and Auto/Transport.  (I also had a one time medical expense in Q3 2011 that skewed my results by about $500.

  • Food: I reduced the number of meals out at restaurants and learned to cook with cheaper, but still healthy ingredients.  My spending decreased from $1,609 to $1,141.
  • Shopping: After figuring out that I already own most of the stuff I need, I worked on eliminating impluse buying.  I made a rule for myself that I wouldn’t buy anything unless I thought about it for a half hour first.  It seems to have worked… I reduced this quarter’s budget  from $1,096 to $146.
  • Auto/Transport: Riding the train is cheaper than driving every day.  I went from spending $821 to $561 on my transportation.

So just these three categories make up about $1,700 that I saved this quarter compared to last quarter.  All that went either into my into my high interest savings account or my index fund investing account.

Net worth Overview

So here’s a graph of my net worth since Q1 2011.  Obviously 2012 has been a better year than 2011 in terms of piling on net worth.  Like I mentioned before, I did get a 4% raise in 2012, but obviously that doesn’t account for the crazy increase in net worth.

I can attribute the rate of NW increase to learned how to save money.  It’s from doing a bunch of little things right.  Since I’ve already doubled my net worth this year, I’m not sure what a reasonable goal for 2013 should be.

Goals and Ambitions

Isn’t it crazy to assume I can find more spending cuts and accelerate my pace of NW growth even more?  If you had told me a year ago that I’d increase my savings rate by 150%, I’d have called you crazy.  During my Q4 2012 review, I will set new ambitious goals.

I don’t see any obvious ways increase my savings rate any more that I already have… but we wouldn’t need goals if they weren’t challenging.  What do you think?  Am I crazy, or going too easy on myself?

  1. November 12, 2012 at 3:01 PM

    Great progress!

    Perhaps you’re already doing these things, but a few things come to mind when I look over this post.

    First of all, what are you doing with the money in your net worth? You need to find a way to get this money working for you if you haven’t already. The progress of any investments you have forms a valuable part of your income on a month to month basis. Otherwise your income will be forever tied to the number of hours you personally put in at a job or on a contract.

    Passive income can help you grow the income side of your net worth. Revenue from the ads on this site, dividends from stock or rental income of some sort are all great ways to earn passive income.

    Saving money has already helped you grow your net worth a great deal, but there’s only so much money you can save, so if you really want to get your net worth growing you need to find ways to get that income up. You’re already on a very good track.

    And of course, keep tracking your net worth. The data always tells a good story about progress. There’s even an app for that: https://play.google.com/store/apps/details?id=com.harleyc.networthcalculator

  2. November 12, 2012 at 7:09 PM

    Hi Jenson, thanks for the tips. I am doing some diversified investing with about half of my net worth so far. I just started this back in March, so I’ve been learning a lot. It is safe to say that I am still learning…

    So far I’ve got an S&P500 index fund, international index funds, and little experiments in bond funds and peer-to-peer lending. Those, along with my high interest savings account, are starting to produce a small return. I’m starting to understand how I wont have to work until I’m 50 to retire if I keep saving like this. As far as net worth calculators go, Mint does a great job for me.

  3. November 12, 2012 at 7:56 PM

    Awesome. That’s a great approach. The important thing is that you’ve already figured out that you don’t have to work yourself to wealth; your money can do a lot of the work for you. Keep it up!

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