Savings rate May 2022 — Documenting my percentage of net income saved. My savings rate was 35% in May 2022. I am not a licensed investment advisor and this post is not investment advice. All opinions are my own.
My long-term goal is to become financially independent through dividend investing.
To reach financial independence, I must save a high percentage of my income and continually invest into high-quality dividend stocks. It really comes down to those two things.
Arguably, your savings rate is the most important factor when it comes to reaching financial independence.
Because a high savings rate indicates an ability to save a lot for investing and also live frugally below one’s means.
If you can keep the cost of living low, it means that it will take a lower amount of savings to become financially independent.
Since your savings rate is such an important part of reaching financial independence, I track mine monthly to motivate myself to save more.
In this post, I will share my savings rate for the month of May 2022.
Let’s dive in.
Savings Rate May 2022 — 35%
I saved 35% of my net income in May 2022.
This represents a 16% decrease compared to the 51% I saved last month. However, it represents a 23% jump over the measly 12% I saved in May 2021.
Of course, the main reason for the increase is that my income is higher this year.
But I must admit that I am not too thrilled with a 35% savings rate. That’s the baseline amount of what I should be saving if I want to reach financial independence within a reasonable time frame.
Ideally, I should save 50% of my income minimum.
Income Sources
I have three main income sources: my job, dividend income, and blog income.
Going forward, I am no longer saving a percentage of my blog income. I plan on using blog income to pay for blog expenses. I use it to prepay for hosting and the rest sits in a spending account.
Otherwise, I save 100% of my dividend income. Most of the time, I reinvest dividends into stocks as soon as I receive them.
Looking Forward To June 2022
As I mentioned above, I always want to save at least 50% of my income.
But it’s the summer season now, so I do plan on spending more than usual over the next few months.
I typically go on a few road trips during the summer, and I end up spending more on restaurants as the nice weather draws me outside.
As such, my goal for June is to save at least 36% of my income. I just want to save a little more than May to keep moving forward.
Savings Rate May 2022 — Final Thoughts
In summary, I saved 35% of my net income in May 2022.
My goal for June 2022 is to save at least 36% of my net income. Ideally, I would like to save 50%, but I tend to get more frivolous during the summer months.
With that said, I am off to a great start so far in June 2022. I saved 51% of my first pay of the month. Also, it should end up being another record month for dividend income.
But since most of my bills are covered with my second pay of the month, I am keeping the minimum savings rate goal at 36%.
Other Personal Finance Posts To Check Out
Dividend Income May 2022 — 115% YOY Growth
Forward Dividend Income May 2022 — $,348.37 Projected Annually
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Dividend Income May 2022 — 115% YOY Growth
