I was going to call this post “Mid-Year Review” but now that it’s SEPTEMBER, I figured “2017 Outlook” would be more appropriate. Given how the rest of 2017 is looking, this one is a tough one to write. The short of it is that we face an uphill battle with regard to meeting our goals for the year. I wrote in our Q2 update that we are in danger of falling short on our savings rate and net worth goals. At the time, I thought I could make some adjustments to our budget and hope for some help from the market to salvage these goals. Fast forward to September, and that’s not looking like a great plan.
Remember how I said that I really let myself go from budget perspective during the summer? Apparently, that was not just a summer thing and the trend has continued through September. I won’t bore you with all the details, but some of the mishaps include 24 (and counting!) trips to Starbucks between May and September, $400 in grocery/take-out/entertainment overruns in August, and a $225 spur-of-the-moment Labor Day trip to Yosemite.
The result: our savings rate is out the window!
Our goal is to save 50% of our post-tax income this year, and it looks like we’ll be right at that mark at the end of September. The bad news: we are trending 40%-45% on a monthly basis. We need to up the savings in Q4, but I’m not sure there’s room in our budget to do so. The challenge is that I seriously miscalculated our taxes this year, so I will need to re-allocate some of the funds we had planned to save in Q4 to a future tax bill. Unless we get a surprise windfall in Q4, we will most likely fall short of our 50% goal.
Net Worth Fails
Our goal is to increase our net worth by 20% in 2017 and we were at a comfortable 16% at the end of August. However, I expect a pullback in September due to a kitchen renovation at our rental property. We’d been planning on the renovation for a while (tenants are apparently not too keen on a kitchen from the 70s) and already set aside funds for the project, but I was a little aggressive on the original budget. The result is that we’ll need to dip into our rental property savings to the tune of $6k – $8k, depending on how long we are tenant-free during the project. YIKES!
Well, I think that’s about it for my “confessional” this time around. I’ll be posting about our actual results through September soon. Until then, I hope you are having a great start to your fall season! Nothing like a pumpkin spice latte from Starbucks to ease into the colder weather…just kidding, I have no $ for such luxuries.