Income/Expenses For February 2012

Each month I will post my income/expenses for the previous month. I track every dollar in and out, so what you see is exactly what I earned and spent (rounded to the nearest dollar).

Income from February 2012:

$4,925–Regular Paycheck
$235–Bonus and Spiffs

Total Income: $5,306

Expenses from February 2012:

$189–Student Loans
$133–Fast Food and Pizza
$43–Auto Insurance
$40–Mobile Phone
$25–Everything Else*

Total Expenses: $1,341

*The Everything Else category includes expenses I don’t have a regular budget for. In this case, it was expenses related to purchasing flowers and a card for Valentine’s Day.

As always, in the interest of full disclosure I like to display my income and expenses from every month for public view. This will catalog my journey to financial independence and prove that it is possible to achieve early retirement on relatively modest means.

The income was a huge surprise this month. I can definitely see where the recent promotion at work is going to provide a little boost to the journey toward financial independence. I feel incredibly blessed to be taking home over $5,000 a month in net income. This may have been an abnormally high month in terms of income for me, even working in my new position. It’s hard to say, however, as I’m still getting a feel for it.

Expenses were a little higher than normal. Part of this is due to the fact that I now have auto insurance and gas to pay for, which are a couple of expenses I haven’t had in about nine months. I also decided to go back to paying for a gym membership. I may write an article about this in the near future, but basically I found my motivation level severely lacking without a fully equipped gym to go to. I was doing fairly well jogging and working out outside, but I could tell that my fitness regimen was suffering. I find my physical health to be well worth the $30 monthly investment.

Food was much higher than normal. I typically target ~$180/month in all food related expenses. I went well over that for a couple reasons. First, I took my girlfriend and I out for an expensive sushi dinner for Valentine’s day and spent over $100 on one dinner. That’s a bit unusual for me, but we really enjoy sushi and it was a special occasion. Second, I was a bit more flexible with my food budget this month. I’m still trying to balance frugality with quality of life and I decided to “let loose” this month in terms of what I was willing to spend on food. I found it to be a nice break from watching every dollar spent on groceries and take-out. I may try to get back to my normal food expenditures in March.

I managed to save 74.7% of my net income this month, which is phenomenal. This is a fantastic number, and hopefully I can remain near this number for the rest of the year while still allowing myself some flexibility with expenses.

My goal is to average a 65% savings rate of my net income, monthly. So far, I’ve hit rates of:

30% – January
74.7% – February 

Obviously a tale of two budgets there, but January’s miss was due to the fact that I purchased a car and paid cash and counted it against one month’s expenses. Some people choose to amortize a large expense like that, but I chose differently. I’m now at an average savings rate of 52.3% on the year, which is a great start toward my goal.

How are your budgets doing?

Thanks for reading.

Photo Credit: RambergMediaImages


  1. says

    Wow, what a great month! The higher income from your promotion at work is very nice. Saving almost 75% of your net income is stellar. I’d say this qualifies as a big step on your path to financial independence.

    I am also trying to cut back on food expenses and I have made some progress. Your car insurance is a lot cheaper than mine, but I am aware that there are plenty of factors that determine car insurance rates (type of coverage, type of car, geographic location, etc.). For example, geographic location makes a big difference, as I found out when I moved to a different state four years ago (and my rate went up). No wonder Warren Buffett likes insurance companies! :)

    Anyway, thanks for the update and keep up the good work!

    • says


      Thanks for the support. The higher income definitely helped to put my savings rate so high, because otherwise with the increased expenses I would have taken a hit. I would agree that the increase in income could potentially be a huge tailwind for me.

      Good on you for trying to cut some of your expenses. I think the food expenses are something that I sometimes struggle with as I try to balance eating well and healthy with eating cheaply. I don’t always strike a balance, but life is a journey.

      My insurance is only so cheap because I have the basic personal injury protection that is required to get on the road, with no collision or comprehensive coverages. It’s also a pretty old vehicle.

      Best wishes on your path to cutting expenses!

  2. says

    Very well done DM! The income really jumped out at me, that is a nice boost for you. Congrats. Keep up the outstanding work in both income and savings.

    • says

      The Stoic Investor,

      Thanks! Yeah, the income was quite a nice boost. Although, to be fair, I think this might have been a bit of an anomaly…even for the new position. Overall, I’m fairly certain I’ll be making at least 10% more than last year but this will likely be at the very high end. Sales were very good last month and I just happened to have a couple nice jobs land in my lap. We also ran more bonus programs than usual last month.

      I know you have a very high savings rate as well. Keep up the great work on your end!

    • says


      Thanks for stopping by!

      Thanks for the support and congrats. It’s much appreciated. I’m hoping to trim the expenses for March, but in the end I’ll have a lower savings rate due to a high tax bill. Gotta pay Uncle Sam his cut!

      I see we’re almost the same age, with very similar goals. I wish you luck on your journey!

  3. says

    Your savings rate kicked ass this month. Way to go!

    What’s even more awesome is that it was during a month where you ‘cut loose’ with some of your spending too.

    Keep it up.

  4. says


    Personally I put my ridiculously expensive valentines dinner in the ‘gift’ category. The reason I am keeping track is to get an accurate picture of how much money I am spending in each category, and the truth is that if i was single I wouldn’t have been spending that money on myself on valentines day, so to include it in ‘food’ would give a skewed picture of how much I am really spending on food for myself.

    • says

      The Money Monk,

      I hear you on the dinner being in the gift category. You could go either way on that one. I tend to track my expenses as a whole, instead of directly killing myself on categories. If I spend a little too much on one category I try to limit myself in another to achieve lower expenses as a whole. But yes, in terms of tracking I wouldn’t have spent that much if I was single.

      Although, to be fair I wonder how often we’ll be single in our lifetimes? Probably less often than in a relationship…so I guess you could go either way on that one.

      Either way, V-day is a killer!!! Haha.

      Best wishes.

  5. Anonymous says

    My interenet thru Comcast was $29.99 for a year promotion, but that finally ended, and now it has crept up to $62.95. I went into the store and they showboated around only 1 deal available for $10 less and 10Mps slower downloads. Last Year i recall her taking quite a bit of time to go thru over ten deals and promotions they were running (How i got it for $29.99).

    When i look at the bill, they wrap all the fees and details into one “Xfinity Internet $62.95″ Blank Statement.

    Plus i got notice that all their service fees have almost double in price!

    I haven’t given up on my $29.99 and will call into headquarters to find a promotional for that price (all the speeds i need at most art usuaually around 6MPS/Download and 1MPS upload at any give time, mostly for Xbox live Parties, which is very low transfer amounts anyway.)

    I still suggest looking to lower your Internet Bill if you can. Espcially if the government is giving the poor almost free broadband internet, while comcast is gouging it’s customers to keep up with quarterly earnings.

    • says


      I may have to do something about the internet bill. I have some of the fastest that they offer because I have so much going on. I stream television, movies, music and I also do online gaming. That is one expense that I can’t do without, but could possibly use a trim.

      Thanks for pointing that out!

    • says

      Compounding Income,

      Thanks! Yes, opportunities like the one I was given only come around once in a great while…possibly only once or twice in a lifetime. So I definitely took advantage of it.

      Yes, those numbers are all net income…post taxes.

      Take care!

  6. says

    Hi DM,

    Congrats on promotion! As a newer reader of the blog I haven’t gotten around to read what you do for living, but you are certainly doing a good job at it.

    How do you track your expenses? Do you write them down in an app of a sort?

    Another question is trickier: does your girlfriend share the pasion for saving and investing?

    The open question at the end of your post triggerred a grim smile. Those low expenses, especially on rental, were once achievable for me as well. Fast forward through to marriage, 2 kids in daycare, 2 cars for a family, mortgage on the house, etc, and the savings rate goes waaaay down from where you are now. It is the attitude that counts the most, but the ability to act on that frugal attitude does give way to life’s realities…


    • says


      Thanks for the congrats and support. I work in an auto dealership, as a service advisor.

      I track my expenses through It tracks all my electronic expenses automatically and I manually track any cash transactions. It works great.

      My girlfriend is also fairly frugal, but is not an investor. She may dip her toes into that side of things this year, however.

      I hear you on life getting away from you. That’s not a bad thing, as I’m sure you wouldn’t trade your situation for all the riches in the world. For me, personally, as you can read in the “About Me” tab I don’t plan on having children or getting married. Just a personal choice that is rooted in me regardless of finances. I also am not totally sold on the idea of home ownership, and that’s something I may write about in the future. I wish you the best on enjoying your time with your loved ones, as that’s what this is all about…right?

      Take care!

    • says

      You are right on the lifestyle choice – I am certainly happy with the family situation.

      While your saving rate is salivating (many can only wish to match it!) there is another alternative to frugality. Income increase works the same way as saving – the rate is lower, but absolute dollar value may still be on target. That’s my approach and it works to an extent.

      Regardless of the above, your saving rate is awesome :)

      All the best

  7. Bo says

    Hi DM,

    That’s a great savings rate! I enjoy reading your blog posts, they are very inspirational. I have only question though, why do you chose to invest instead of paying off your students loans at a faster rate? Does it have something to do with the interest you pay on those loans?

    Best wishes!

    • says


      I’m glad you find inspiration in the posts. Other than tracking purposes, that’s the main reason I write the blog.

      My student loans carry a very low interest rate that is sub-3% and tax deductible. At the current time I find it advantageous to continue to maximize my investments.

      Hope that helps. Best wishes!

    • says

      farmland investing,

      Thank you so much! It was a wonderful surprise that I received in the very last week of 2011 (literally). It’s been great so far and I’m trying to take the extra income and amp up my savings rate instead of inflating my lifestyle.

      Hope all is well with you! Take care.

    • says

      Investment Road to Freedom,

      It’s truly great to see your progress as well. I hope that everyone has a great 2012 and it serves to be prosperous for us all. Thanks for continuing to support the site!

      Best wishes!

  8. says

    Question – not sure if you’ve answered it already or posted something about it – but here goes.

    You, as many others (me included) got studentloans – what is your taken on this? are you paying it off according to plan? (how much is amortization?) or are you paying it off more aggressively/passively ?

    Keep up the good work, good inspiration right here!

    • says


      Thanks for stopping by.

      You can see my response to this question above, but basically the interest rate is very low and also tax deductible. At this time, I find it more advantageous to invest as I feel confident in my ability to earn more on my capital through investments than I would through the early payoff of the student loans.

      Keep in touch!

    • says


      I wasn’t always able to reach savings rates like this, but it does come in time if you work for it. It’s actually easier than it seems if you are open minded about budgeting and expenses. Increasing my income through a recent raise at work has certainly helped as well. Put everything down on paper and start to experiment with expenses seeing what you can do without.

      Best of luck on your journey!

  9. says

    Steve Mertz,

    Thanks for stopping by!

    I appreciate the support, and I think these monthly reports really show the power of frugality and growing dividends. I’m very excited for the month where I post dividends exceeding expenses. That’s still a few years off, but it’s getting there!

    Keep in touch.

  10. says

    I think you’re doing your averaging wrong. For things like average savings rate for multiple months combined I don’t think you can just take the percentages and average them, you should be adding up all of the expenses and dividing them by all of the income.

    For instance, your actual savings rate for January and February combined would be: (3260+1341)/(5306+4677)=46.09%, not 52.3%.

    Similarly for 2011, from Feb through Dec, your total savings rate is 38.92% not 59%. I know you are calculating for the average “monthly” savings rate, but that number can be misleading to the actual percentage amount you saved for the year to us readers.

    It took me calculating my own monthly savings rate for two months to realize that I was doing the same thing. Kind of lame news if you didn’t realize you were saving less than you thought, but the good news is you have a lot more room to save more now than you thought! Good luck with your future en devours, love the blog.

    • says


      Thanks for stopping by.

      Thanks for the feedback. However, your math is wrong here my friend.

      You don’t divide expenses by income to get a savings rate. You divide the difference between income and expenses (also known as savings) by total income to get your savings rate.

      For instance, if you make $2,000 and spend $500, you do not divide 500/2000. You subtract 500 from 2000 (2000-500=1500) and take the difference divided by the income.

      1500/2000= 75%.

      Moreover, if I wasn’t averaging monthly like I do I’d actually have a HIGHER savings rate in some cases. If you take my total income from January and February ($9983) and expenses ($4601) and subtract the two you get: $5382.

      5382/9983=53.9. 53.9% is actually higher than 52.3%.

      So by being lazy and averaging monthly the only way I’m being “misleading” to my readers is by actually showing a LOWER savings rate.

      I hope you correct your math in your own calculations and you won’t be bummed any longer!

      Best wishes.

    • says

      Ah, right I forgot to invert the percentage afterwards. Apologies. My point wasn’t to call you out on saying you didn’t save as much as you claimed, although that is what my quick-math determined (incorrectly), I was just trying to say that because income and expenses vary from month to month, some months will be weighted incorrectly in your averages, and although I know it isn’t the prime focus of your blog, it would be nice if you averaged the totals each month not just the percentages.

      For example say by some fluke you got kicked out of your rental unit, lost your job and crashed with a friend for free for a month and somehow got everything back the month after. Say you somehow scraped together 1k during that month and only spent 100 for easy math. Now you have a 90% savings rate for one month even though the numbers in both income and expenses are very small. This percentage will then be given a 1/12 weighting in your average at the end of the year, or if it were for April it would represent a 25% weighting.

      If you extend that to a full year, Say you have a 65% savings rate by the end of the year @ close to 5000 income and 1750 expenses for every month except for this one fluke month. That would give you a total of income = 56000, and total expenses of 19350, which would give you an actual savings rate of: 65.45%. If you simply average the months’ percentages together you would be showing 67.08%. If that was…say the 4th month of the year then your actual savings rate would be 66.56% for the first 4 months, and your average would show 71.25% if you just averaged the percentages.

      I think it significantly messes with your margin of error by averaging the percentages together, and, regardless of the direction, I would think that you would want to have the most accurate information possible on something like that.

      Thanks for taking the time to answer,

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