The best financial move I made in 2022 was transitioning to a much higher paying job at another company. This fueled a savings rate of 48% (not including retirement contributions).
However, the Fed’s 2022 interest rake hikes to fight inflation did not bode well for my net worth on paper. My net worth decreased vs. 2021 by -17%, driven by a decline in the value of my home’s equity by -42%. Since I plan to spend many decades in my home and have no plans of selling, this decline in equity doesn’t concern me.
Net Earnings Overview
I consider Giving, Taxes, HSA Contributions, and 15% gross salary Retirement Contributions non-negotiable. Given this, I excluded these categories when reviewing my 2022 net earnings, outlined by the pie chart below:
Net Earnings Key Takeaways
Paycheck. I did not have as much bandwidth as I did in 2021 to pursue multiple sources of income because I transitioned to a new industry for my main job. As such, I decided to focus on excelling in my new environment. Fortunately, my new job pays more then my previous job and my side gig combined.
Side Gigs. As I continue to get settled into my new job, I anticipate I’ll have more time to pursue entrepreneurial endeavors. I still see high value in increasing the proportion of my income from non-W2 earnings.
Net Income Allocation Overview
As stated above, since I consider Giving, Taxes, HSA Contributions, and 15% gross salary Retirement Contributions non-negotiable, I excluded these categories when reviewing my 2022 net income allocation, outlined by the pie chart below:
Net Income Allocation Key Takeaways
Savings. My 2022 savings rate was 48%. By comparison, the average American only saves 7-8% of their income.
Housing & Utilities. Housing expenses, including utilities consumed 32% of my earnings for the year. Paying-off my mortgage early remains a high priority, but that won’t happen until 2028.
Groceries. 6% of net income went toward groceries with another 1% on restaurant take-out.
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