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Monthly Savings Report: January 2019

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Is it just me or did January seem to stretch on forever?

I’m not complaining though! January was good to us, especially since it was an “extra” paycheck month – but we’ll get into that in a minute.

It was also the month of our mortgage-free anniversary! If you’re new to my blog, you may not know that I originally started this blog on September 1, 2016, to document how much mortgage principal we were able to pay off at the end of this month. What began as a simple (I said simple, not easy) two-year goal evolved into an incredible 17-month journey of finding myself and my passion – oh, and paying off our house.

Our first anniversary of being completely debt free was on the 29th, and you can check out my celebratory blog post here to read a recap of this journey.

Something else exciting that happened this month was finally getting to chat face to face with my friend Sami from asunnysideuplife.com! Well, face to face through a Zoom meeting, that is.

Sami and I have been Instagram friends for over two and a half years, and she has one of the most inspiring debt free stories I have ever heard – we’re talking about rebounding from almost a half of million dollars worth of debt on one income and three kids. Her budget course got me back on track a little over a year ago when I began to get lazy with our budget (read my review of the course here), and I was so excited when she asked to interview me on her podcast to talk about her favorite journal post of mine, Why I’m Glad I Don’t Love My Job.

We ended up talking for over an hour, and the topics ranged from the blog post, my pseudonym, our mortgage-free journey and very public budget, discouraging comments that we’ve received in response to continuing to share numbers after becoming debt free, the debt free community, credit cards, our current goal and everything in between.

Listen to the interview here!

Alright, let’s get down to what you came for – January’s numbers.

January Savings

Our Budget

As I mentioned, January was an “extra” paycheck month for both my husband and me. What this means is that there were five Wednesdays and Thursdays, so my husband received three biweekly paychecks instead of the normal two, and I received five weekly paychecks instead of the normal four.

We live on and base our monthly budget on $2400 per month, an amount that is about $300 less than my husband’s normal take-home pay. Our budget is updated every weekday, and you can view it at any time here (and if you like the template, you can save a free, customizable copy for yourself here)!

We began constructing our budget based on this amount as soon as we paid off our mortgage last year. The decision to live on less than the lower of our two incomes does three things for us:

  1. It gives us the security of knowing that we will experience no change in lifestyle and would not even need to touch our emergency fund if one of us lost our jobs.
  2. It forces us to prevent lifestyle inflation as our income slowly continues to increase over the years.
  3. It enables us to work toward achieve our ultimate goal of financial independence.

Since my husband is paid biweekly, we normally leave $1200 from each paycheck in our checking account and transfer the rest to our Ally savings account toward our current goal of saving $100,000 (I’ll give more details about this goal a little further down). Because he received three checks this month instead of two, we left $800 from each check in our checking account instead. We decided that anything above $1200 on his check would be used to take care of a couple other things we needed/wanted this month – a new dryer (our very first brand new dryer from a store!) and tickets to see the Nashville Predators, for example.

What about my paycheck? 100% of it is direct deposited to our Ally savings account every week.

Our Savings

We brought home $8,474.58 this month – seriously, can’t every month be an “extra” paycheck month?! – and of that amount, we saved $5,684.12, giving us a savings rate of 67% for January!

Let’s break these savings down.

  • January 2: $400.00 (from Ron’s paycheck of $1,306.12)
  • January 3: $888.79 (my entire paycheck)
  • January 10: $888.79 (my entire paycheck)
  • January 16: $400.00 (from Ron’s paycheck of $1,315.90)
  • January 17: $888.79 (my entire paycheck)
  • January 24: $888.79 (my entire paycheck)
  • January 25: $40.17 (interest earned in our Ally savings account)
  • January 30: $400.00 (from Ron’s paycheck of $1,368.44)
  • January 31: $888.79

While engaged, we had dreamed of reaching the point in our marriage where we could live on less than one income and save the rest. Five months into this goal, I still can’t believe we’re actually doing it!

Credit Card Updates

Moving in another direction, you may recall that I opened two new credit cards last month for the purpose of travel hacking, the Chase Southwest Rapid Rewards® Premier Business and the Chase Southwest Rapid Rewards® Premier. I’ve wanted to earn the Southwest Companion Pass ever since I opened my first travel hacking card at the end of 2017, and these two Southwest cards will help us get there.

We have put every single purchase we’ve made this month on one of these two cards, and since we are working on intentionally meeting the spending limits of $3,000 for the business card and $1,000 for the personal card by mid-March, every single transaction has been logged on a spreadsheet. At this point, we are about $800 away from meeting the limit for the business card and about $400 away from meeting the personal card’s spending limit.

After these spending limits are met, we will receive 60,000 bonus points from the business card and 40,000 from the personal card, for a combined 100,000 points. We have currently earned 1,333 Rapid Rewards® points, so just under 9,000 more to go until we receive the Companion Pass for the rest of 2019 and the entirety of 2020. I will list Ron as my companion, and he will get to fly for free (excluding taxes and fees) with me on Southwest flights during that time! I’m so excited for BOGO flights, especially since Southwest is working on connecting to Hawaii soon!

To learn more about the four credit cards I currently have, click here.

Okay, okay, I got off on a little tangent there. Let me get back on track and give you a quick rundown of what our $100,000 savings goal entails!

Our Current Savings Goal

The Goal

What: Save $100,000 in two years to purchase our first rental property in cash.

When: We started at $0.00 on September 1, 2018.

Where: East Tennessee.

Why: After becoming completely debt free, this is our next step toward our ultimate goal of being financially independent. And why cash? Because this is new for us and we want to be as safe as possible. Plus, neither of us have any desire at this time to owe anyone anything ever again.

How: We decided after paying off our house to live on less than the lower of our two incomes, and the amount we chose is $2,400 per month. Since Ron is paid biweekly, we transfer every penny he earns above $1,200 to the Ally savings account we set up for this goal. In addition, we save 100% of my pay by having my weekly paychecks direct deposited into this account.

For more details about this new goal, read my announcement post here!

Wrapping Things Up

Since we began working toward this goal on September 1, we have saved $22,015.30. It’s crazy – over $22K saved in 22 weeks for an average of $1,000.70 per week! January’s “extra” paychecks really helped us get ahead.

We started our previous major financial goal of paying off our house on the same day back in 2016, so I like to compare our progress along the way. The image below is a comparison of how much principal we paid each month versus how much cash we have saved for our new goal.

While paying off our house, we lived on the higher of our two incomes while using every cent of the lower income as mortgage principal, and we immediately switched to living on less than the lower of the two incomes as soon as we made our first debt-free budget.

I’m enjoying seeing how much more this switch has enabled us to save, especially considering how much overtime my husband was working while we were paying off our mortgage!

And as wonderful as it was putting all that extra money toward principal each month, I have to say that saving it toward our first cash-flowing asset is even better. I’m so proud of the progress we’ve made over the last five months.

2019 is off to a great start, and I’m looking forward to seeing what the rest of the year has in store for us!

As always, I’d love for you to share this post using the social media icons below. There’s not much out there from people in Baby Step 7 and/or saving to purchase a rental property in cash, and I think it’s helpful for people working through their debt to see the possibilities waiting on the other side!

And for daily updates, be sure to follow me on Instagram!

See y’all soon!

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4 Comments

  1. Christina Wirch says:

    Where are you planning to travel once you earn the companion pass?

    1. Ellie Mondelli says:

      We’re not sure yet other than thinking about Hawaii!

  2. Well done!! You two are killing it since paying off that mortgage (and before then).

    1. Ellie Mondelli says:

      Thank you so much!!

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