Savings rate – December 2016

Adding a little bit of snow while rolling down the hill, step by step, will eventually turn a tiny snowflake into a huge avalanche. Well, I’m in the phase where I still try to make the snowflake roll 🙂

I posted my first savings rate ever for November 2016. To do that I went through all the transactions on my bank account for 2016 until then. Now, updating this sheet for December is much easier and quicker. Nevertheless, the exercise of calculating my own savings rate has done something to me. I am much more aware of how much I spend on what. Before I even spend the money, I think about it in terms of savings rate. My thought process then goes along the lines of: ‘hmm, this product costs 1% of my monthly income, do I really need it or do I want to post a 1% higher savings rate at the end of the month?‘ And you know what the best part is about this? I love it. I don’t think I have been aware of this ever since I earn a salary. Products costing 5/10/15 euro or dollar for that matter never made me think twice really because the face value is so low. However, when you translate everything back into a percentage of your income it makes much more sense to me somehow. Maybe this sounds stupid to most of you but it really helps me. I think I needed it too, given that my savings rate was so low for the whole of 2016.

So what did I do in December. Well, I did not save much more yet as in other months which can be seen in the chart below.


However, I tackled some expenses. For example, I have quite short hair. Nevertheless, a trip to the hairdresser will cost me something to the tune of EUR 20. In December, I bought a hair trimmer for EUR 60. Now, I can trim my own hair with a little help from my wife and I don’t have to go to the hairdresser any more. The payback time of that thing is a bit more than four months. From then on I save a EUR 20 every six weeks.

I also looked at my health insurance. In the Netherlands, if you are above the age of 18 you can only switch health insurance provider by the end of December. So, around Christmas you get loads of TV commercials for food, perfume, toys and of course health insurance 🙂 So, I switched this time around. I have been with my now ex-health insurance provider my entire working life. Now, with almost the same coverage I save EUR 10 each month.

Another item I have started to look at are my other insurances like car (2 cars actually), personal liability, legal insurance (not sure this exists internationally but it covers legal/lawyer expenses if necessary not the fines), fire & theft insurance and travel insurance. Switching these policies has proven to be a bit more difficult. I currently have all of them with one company and get a discount for having so many products with them. So, first thing I did was call them and ask them for a discount ie how badly do you want to keep me as a customer. Unfortunately, they did not fall for this and offered me nothing more than I was getting already. The next step was to write to another insurance company. I sent them an email and asked them for a quote for my entire policy package. So far those guys have not gotten back to me but I hope to report progress on those insurances over the next few weeks/months.

Also, at my work it is kind of customary to go to the canteen together with your coworkers. Nobody packs lunch but everybody buys it there. Now, I not only buy the cheapest kind of food they have there but I also started to bring my own sandwiches. I do not do it every day however as I actually like the variety the canteen offers. I actually think that my new behavior on this item will save me 3 euros a day. Multiply that by about 20 working days in a month and you get to EUR 60 in savings.

I continue to look through my budget to see what I can save money on. I want to get this snowflake rolling faster.

What are you biggest/easiest/quickest ways to save money and add more snow to your snowball?

5 thoughts on “Savings rate – December 2016

  1. Great to see your savings ratio going up the last few months! There are many ways to save money on daily or weekly costs. We decided to sell our car last year, saving ourselves more than 100 euro a month on taxes, insurance and gas all together. I’m now experimenting with YNAB, to automate the tracking and see how we can find the right balance between spending and saving (without picking pennies).

    And I agree with Dividend Life, income increasement can be the biggest driver in a higher savings rate. I was promoted at work last year, which resulted in a much bigger pay!


    • Hi Divnomics,
      Thank you for your comment. Congratulations on your promotion. While I think it is true that the real upside is in earning more but I doubt you can significantly increase your income every year at your job. Also, you have to make sure you do not suffer too much from lifestyle inflation ie that you simply spend your salary increase. For now, I think there is more upside for me in increasing my savings rate.
      Also, I quickly checked out YNAB and saw that it costs USD 50 per year after the free trial period. I will be curious to read about your experience with the software but for now I am happy with my own excel sheet.
      Thanks for stopping by.


      • True, also with increasing income there is a limit. I’m sure this year will be way less compared to last years increase 😉 I’m curious on your path forward in increasing your savings rate. Still growing in that section as well. I will probably post a review after a few months about YNAB 🙂


  2. Hi DIB,
    It’s great that tracking your finances is making you appreciate the cost of purchases!

    Another fun trick is to calculate the money you’d have if you invested the purchase amount over the next 30/40 years instead. That gives you the opportunity cost of each Euro you spend today.

    I think the biggest way to grow your snowball is to earn more income. Cutting down on expenses is good until a point, then it has ever-decreasing returns. Some expenses can’t really be cut more, and some expenses are needed for comfort / happiness.

    Best wishes,


    • Hi DL,
      thank you for your comment. You’re right, I will not be able to cut all expenses to zero. I think my kids and my wife will also tell me when I say no to every purchase. I do want to try to increase my savings rate still however. We’ll see where I end up.
      I will also try to earn more but that is something I have always tried so far. With varying success I must admit.
      Good idea regarding calculating the opportunity cost. I might do that in the next savings rate update or when my savings rate has stabilized at a higher level. To be continued.
      Thanks for stopping by.


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