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The school year is officially over. It the summer months that I enjoy, because I am working on an article, when I would normally be running out the door to take my daughters to daycare. Instead, I am writing an article as the sunrises while I drink a cup of tea.
I find that my best time to write articles during the school year is on Saturday or Sunday afternoons as everybody naps. This time of year, I can take an hour each morning and focus on my writing. My daughters sleep in, if not required to get up for daycare and I can write.
The last week of May began my summer and we spent this time at home as my wife was recovering from a surgery. My wife loved it (not the surgery of course), as it reminded her of last summer, when we spent a whole month together as a family. It was really nice! Our girls and our dogs are enjoying the summer, because we are home all of the time.
Looking back at May, it was a whirlwind. I host an event the last week of school at my school. The event takes a lot of time to plan and prepare. Not only did I work on planning for that event, but the week before that event we traveled to Nebraska. Three of my sisters graduated (two from high school and one from college). I have made it to everyone of my siblings high school graduations. This past May was the last high school graduation of all of my siblings.
Goal #1 Update:
Goal #1 is our mortgage payoff goal. At the beginning of the year, I shared that we had a goal of paying off $12,000 of our mortgage in 2019. That’s $1,000 a month towards the mortgage. Below is a list of the principal paid off for each month:
January: $982.11
February: $984.56
March: $987.31
April: $989.47
May: $991.93
TOTAL - $4,935.38
We are continuing to pay the minimum mortgage payment and have not put any extra towards the mortgage this year. I anticipate the crossover point, in which we will be pay more that 1K a month on our mortgage as September. Due to this falling past the halfway point of the year, we probably won’t hit our goal of $12,000, unless we put a little extra on the mortgage. As of right now, I don’t know if that will happen in 2019.
Goal #2 Update:
Goal #2 is our goal to save over $68,000 over the course of 2019. Below is a look at our savings over the course of May:
May was once again a good savings month for the Summit of Coin Family. This month of saving over $5,000 dollars was aided by the fact that my wife was paid three times. May was one of two months during the year, where she receives three paychecks! Three paychecks equals three times investing in 457 and 401k!!
Our emergency fund savings was lower, because my wife had a surgery. This led to high medical expenses and therefore we had to use some of our emergency savings. You will this effect later in the article with the savings rate section.
Below is a look at our savings over the entire year:
In my last savings update, I talked about trying to make up the difference between coming short by an estimated $5,000 if our savings stayed the same. Below I listed three strategies that could help us reach our goal of $68,000.
Invest more in our emergency fund. During the first 5 months of the year, we have not put any money in our emergency savings. It will need to be replenished, because we used some funds for the repair of my wife’s car and the purchase of our new computer.
Increase my 457B contribution over the summer. Currently, my 457b contributions are $2,400 under our goal of $12,000. I could increase just for the summer to bridge the gap between the $2,400 difference.
We can use the money and throw a little extra on the mortgage. This will guarantee that we hit our $12,000 principal payoff in 2019.
With the girls staying home with me this summer, we will save a lot, but the cost of my wife’s surgery has really affected our ability to save as much. Therefore, we are slowing down our aggressive investing in retirement accounts until we can accomplish the following things:
Make sure we have enough funds to pay for medical bills and a new dishwasher.
Replenish the emergency fund (taken a major hit with car repairs and medical bills [2 surgeries this year - 1 for my daughter and 1 for my wife]).
Now, does it look like we will hit our goal this year? No, with the circumstances that have come up, I don’t see it, but we have already saved over $30,000 this year. That’s a pretty good number right there. So, even though we won’t hit our goal. There is nothing to complain about. We are saving more than most people and can’t complain about a hiccup in the road that slows things down.
As I have heard Brad and Jonathan say on ChooseFI multiple times. It sounds something like this, “So you only save 40% instead of 50%. Oh darn, it’s still better than most people in America!” Essentially, the thinking is, because you are striving for such a huge goal, you shouldn’t be upset by not reaching the goal, because in comparison to most Americans you are killing it!
With that in mind, let’s take a look at our savings rate in May.
As you can easily see from the pie chart above, our savings rate was less than the amount we spent on medical. We saved over 5,000 in May, which means that we spent over $6,000 on medical expenses. That’s a pretty large number, however, I expect to receive a refund. I believe that we were overcharged as my wife’s max out of pocket should be $3,750 for the surgery.
This happened with my daughters surgery. The company estimated the costs and then asked us to prepay. We prepayed, but they overestimated the costs. Thus, they sent us a refund of around $600. I expect a much larger refund this time.
2019 Savings Rates:
January: 34%
February: 40%
March: 34%
April: 48%
May: 26%
Year-to-Date: 37% (down 3% from last month)
Our year-to-date savings rate has dropped, because our savings in May was so low (percentage wise). In all reality, our savings wasn’t small, but the medical bills affected how much we actually saved based on a percent of our spending. I really expect our savings rate to accelerate as we head towards the end of the summer, because we are saving the amount we normally spend on daycare expenses.
How are you savings goals going in 2019? Do you prepay for medical bills? Check out this article about medical bills that I found from Consumer Reports.
