Monthly Update – January 2019

I am a little behind schedule on this post but here is my analysis of my monthly income and expenses for January 2019.  As per usual, below I have listed a running three month look for comparative purposes.

First, here are the numbers:

Category: Nov 2018 Dec 2018 Jan 2019
Total Monthly Gross Pay: 100% 100% 100%
Taxes Withheld: 20.69% 15.96% 23.02%
Other Withholdings: 5.53% 3.82% 4.85%
401K Withholdings: 1.06% 0% 12%
Diverted to Investments Account: 4.92% 27.14% 36.2%
Diverted to Savings Account: 0% 24.34% 0%

So, looking at this month’s numbers, there are a few things for discussion.  First are the taxes withheld jumping from the previous month.  This is due to the fact that the calendar turned to a new year and therefore, I must contribute to Social Security withholdings once again.  This contribution has a maximum value per year and once you hit that, money is no longer diverted to this fund for the remainder of the year.  Late last year I hit that limit and therefore in December I did not have these monies removed from my paycheck.

Also, of note is the jump of 401K withholdings.  Once again, last year I was able to max out my 401K contribution.  This occurred in early November.  That can be seen by looking at this line above.  In November I had a small contribution that topped of that contribution for the year and then in December there were no contributions.  Now that we are into a new year, those contributions start back up again.  At present I am contributing 12%, but I will look for opportunity to increase this in small increments any time that I think I can do so without impacting my monthly budget.

Lastly, I was able to divert quite a bit to investments this past month.  I have regular automated contributions that are scheduled to occur on the same day as I receive my paycheck.  I was contributing $525 per pay period to start December but by the time of the second period, I had moved that up to $550.  I will continue to look for opportunities to increase this amount anytime I can permanently eliminate a recurring expense to ensure that I can lock in those savings for the long term.  In addition to my regular automated contributions, I found I had more cash in my checking account than I needed for my regular budgeted expenses.  I took advantage of this by diverting that additional money to my taxable investment account.  I am working on creating a more comprehensive budget and once I get to that, this type of situation will be eliminated since my plan is to use a zero-sum budget where every dollar is accounted for.  At present, while I do “budget” for most of my monthly expenses, I still feel that I am mostly reactive and increase payments to savings or investing vehicles based on the balance in my checking account.  In the future I plan to be much more deliberate to ensure that I can capture all savings and ensure that each dollar is put to the best use.

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