Happy 2017 everyone! It’s a new year and for most of us it means a new job, a new house, a new haircut, new clothes, a new boyfriend (haha), and maybe a stronger will to live it up!
After meeting 2017 with two trips to the hospital (family) and a severe illness (me), which tested my emergency fund (and made me happy I have one), I have decided to let go of the bad things and think of 2017 as a clean slate, a way for us to start anew.
Letting go of the bad
Reduction in savings rate in 2016
2016 was a major year of life events for me, the most expensive and notable of which was the breakdown of my phone! This phone was not cheap and lasted me only two years (for reference, it is a Sony Xperia Z1 compact). The battery kept dying and the touchscreen became unusable.
Repair would have been affordable at PhP 5,000.00 / USD 100.00 but the circumstances at that time required continued access to a reliable smartphone. So, instead of having my phone repaired, I opted to buy a new phone (Sony Xperia Z5 compact). I did not have the time to wait around for my phone to be repaired (which could’ve taken a month). So there, money down the toilet.
The largest expense for 2016 is said brand new smartphone (gadget/apparel category). Second largest are on travels abroad, which I would never regret. Third are on wedding expenses while fourth largest are on household expenses. Thus, I spent a total of 47.52% of my income in 2016. Conversely, this brings my saving rate to 52.48% for 2016.
It’s not a bad saving rate and it’s definitely above the average saving rate for most people (average saving rate is at 10-20%). However, this saving rate is down from last year, which was at a hefty 65.12%, or a reduction by 12.64%.
Once you’re close to paying off a major property purchase, as I am, you tend to relax a bit. I’m no longer under any monthly obligation to remit payments to my developer, as I’m set to merely make a lump sum payout upon turnover. This reduces any pressure. It also works to encourage complacency, especially as money is freed up in the budget.
I have resolved to let go of all these shortcomings and to start afresh in 2017. With my new husband, who is a frugal guy as well, I feel a future of endless possibilities.
Sure, interest rates are rising, equities may be headed down for the short – medium term and inflation is rising, but a little optimism, especially from us investors, always helps. After all, stock prices are largely influenced by investor expectations.
What do you resolve to do this 2017?
To the second million,
20 something lawyer