Savings Rate For 2008

As part of the final sign off on 2008, I completed added the December spending numbers to the spreadsheet to work out my overall savings rate for 2008. I was surprised to find that during the course of the year I managed to save 57% of my pre-tax income. I had initially assumed I would save less than the 55% achieved in 2007.

Income

My income in 2008 was slightly higher than 2007. My monthly income fluctuates a bit and was higher in the first half of the year before generally declining in the second half. This is effectively where the improvement in the savings rate came from.

Expenses

My expenses in 2008 were slightly lower than in 2007. This was a case of higher school fees and general household expenses (in spite of the rates relief and partial electricity bill subsidy from the HK government) being offset by lower discretionary spending on holidays, wine and collectibles.

Tax

My provision for tax increased by more than the reduction in expenses.

Other provisions

I accrue provisions for various anticipated expenses and treat these as an expenses as and when they are provided for. Year end provisions were increased sightly as I anticipate some expenses in 2009 (e.g. our old style TV set is beginning to die on us and will need replacing soon and I will need to get a couple of new suits made for work).