Income/Expenses For March 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 March 2012:

$4,189–Regular Paycheck
$444–Bonus and Spiffs

Total Income: $4,884

Expenses from March 2012:

$189–Student Loans
$95–Fast Food and Pizza
$23–Public Transportation
$40–Mobile Phone
$1,772–Everything Else*

Total Expenses: $2,950

*The Everything Else category includes expenses I don’t have a regular budget for. In this case it was Federal taxes owed ($1,686), the cost of doing my own taxes on TurboTax ($34) and a birthday gift for my father ($51). The taxes were a bummer.

Well, what can I say? It was another strong month for income. I never actually thought when I first started doing what I do now that I’d make the kind of money I do. I had thought I’d probably cap out around $40,000 a year, but I’ve been pleasantly surprised and equally rewarded for my hard work. The bonus category was a bit high as I included the difference from the sale of my car and the purchase of my scooter as bonus income.

Expenses were actually pretty well in line. Food costs were just slightly above my long-term trend and I wasn’t even carefully watching the food budget. Everything else was as usual. I had a high fuel bill due to the fact that I owned a car for the first week of March. From now on, that expense will likely be less than $20.

Taxes were the big nasty. I owed as much as I did due to a couple of reasons. First, I was claiming an exemption of “1” on my W-4 for Federal taxes withheld. I changed that to “0” a few weeks back to correct that going forward as being single and now making decent money I need to adjust my taxes withheld. Second, I had quite a large bill for capital gains last tax year. I had a big gain on my Harleysville Insurance (HGIC) sale after the buy-out as well as a couple of other sales just before the blog started. Third, I had my first big dividend total for a year. I earned just over $1,200 in dividends which I owed 15% on. Although the investments certainly contributed, I was over $800 in the hole before I even imported my 1099 statement into TurboTax. The exemption adjustment should correct this for next year.

If you take away taxes, I actually had a very high savings rate and had a phenomenal month. It’s unfortunate that taxes skew my average, but I count them as an expense instead of a reduction in net income when I owe direct like I did. You could go either way with it, but the point is that the money still left my wallet and went to the Federal government.

I managed to save 39.6% of my net income this month. This doesn’t look very good, but the fact is that taxes were a one-time expense and I’ll most likely be well above 60% for the rest of the year. Without taxes owed, I would have been at a 74.1% savings rate.

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 
39.6% – March

I’m now averaging a monthly savings rate of 48.1% for the year. Not as well as I would have liked to start, but I’ve got the rest of the year ahead of me and I’m very excited for what the next nine months bring me!

How are your budgets doing?

Thanks for reading.

Photo Credit: RambergMediaImages


    • says


      Thanks for stopping by.

      Getting your savings rate to over 50% in the next year would be fantastic!

      Thanks for the support. It’s kindly appreciated.

      Best wishes!

  1. says

    This month your dividends covered 21.3% of your regular expenses. This is very impressive. Last month you showed dividends covering 11.1% of regular expenses, resulting in a 10% increase!

    Can’t wait until you hit the 100+% mark. Which shouldn’t take too long in my opinion.

    I have been somewhere in the 15% expenses covered range for some time, mostly from real estate, but with dividends rolling in and debts going down the numbers are looking better each month.

    • says

      Investing Early,

      Thanks for noticing that! Yes, my dividends covered a good portion of my income…my highest percentage ever. It was great to know that I only needed to cover 80% of my expenses this month through employed income.

      Covering 15% of your expenses passively is fantastic. That is a lot of burden removed from your shoulders and being as young as you are, you are well on your way to completely covering your expenses passively.

      Keep in touch!

  2. Dan says

    The tax man comith, the tax man takith!

    I don’t think Shakespear would be impressed, with the taxes of course. It seems like your well on your way to the $2000 mark! Good luck with the journey

    • says


      The first step is to definitely have a concrete and attainable goal. That gives you a point to start from and a target to shoot for. It also makes you accountable.

      Sounds like you’re doing a great job with paying off the mortgage and attacking debt. I think the first key to financial independence is most certainly paying off debt quickly and aggressively, unless it’s at a very low rate and tax advantageous. In that case, paying it down but also using your capital on other opportunities is probably not a bad idea.

      Best wishes on your journey!

  3. says

    Your expenses without the tax are close to $1,265 per month, which adds to just over $15,000 a year.

    A portfolio yielding a conservative 4% would need to be just under $400,000 to provide you enough income to be financially free.

    With reinvested (and growing) dividends you will get to that mark way ahead of the planned 40-year birthday. It probably feels awesome to have your goal within a visible reach, doesn’t it?

    • says


      Thanks for the math on that. I think you’re right in that I’m ahead of my goal. I actually anticipate hitting 100%+ of expenses by 38 based on my progress thus far. We’ll see, but I’m just really excited and blessed to have had such phenomenal success so far.

      I hope you are having a successful 2012!

      Best wishes!

    • says


      Thanks for your continued support.

      I would have liked to be a little higher, but I’m pretty happy to have landed at 40% with such a large tax bill. My increased income since last year is actually the only thing that kept my savings rate so high because my other expenses were pretty normal.

      I think April will be much better. You had a great savings rate in March, much better than mine. You’re doing a great job my friend.

      Best wishes.

  4. Eric FG says

    Here is my budget for March:

    $2,998–Regular Paycheck (I am an airline Pilot!)
    $899–Bonus and Spiffs
    $311–Net Perdiems after expenses

    Total Income: $5,532

    Expenses from March 2012:
    (Family of 4, one salary, one on mat leave no benefit)

    $1184–Mortgage and Municipal Tax
    $140–Family entertainement (mostly for the kids)
    $156–Cable+TV+Internet (thx rogers!)
    $86–Family Gifts
    $175–Kid School
    $140–Mobile Phone
    $276–House repair or maintenance
    $167–Health (chiro and pharmacy)
    $97–House insurance
    $143–Car insurance
    $471–Car Lease
    $15–407 Toronto
    $107–RESP one kid

    $635–Everything Else*

    Total Expenses: $5477

    Several things jump to mind, analysing my budget: don’t be a pilot! Don’t have kids if you want to invest! Don’t live in Toronto!

    • says

      Eric FG,

      Thanks for sharing that. You’re the first person to stop by and lay out your budget like that. Takes a lot of guts and I really appreciate that.

      A couple things come to mind, since you shared. First, I thought airline pilots had higher incomes…no offense intended, just my preconceived notions on that. Second, your dividend income is absolutely huge. You must have a very large portfolio that you’ve been cultivating for quite a while. That’s really fantastic. Your dividend income could retire me.

      Being the sole income earner in a 4-person household can be really tough. I realized early on that my personal goals do not jive well with having children or living in expensive places, so I planned my life around that. Even so, I think you have significant freedom in cutting down your expenses. I could easily see cutting the food bill down significantly, the everything else budget is more than 10% of expenses so that should be carefully analyzed and the wide-ranging entertainment budgets could probably be trimmed. All in all, I do wonder if you could get that budget down to $4,000 or so and really start kicking your savings into high gear.

      Thanks again for sharing. It’s really interesting to see other budgets.

      Keep in touch!

    • Anonymous says

      Toronto – ya i can see that, i’m over in Vancouver and the rents are hideous for the sq footage – having said that, i got locked in 6 yrs ago, i know if i leave they will crank it up another $400 per month so i’m using time wisely.

      Re: cable – i cancelled all my cable etc, i just have internet. I am a brit so the tv over here, no offense was not doing my brain any favours 😉 I tend to download ‘legal’ tv shows from torrents or just use netflix $8 per month.

      Phone same thing, give rogers a call – i spoke to them after 1 yr on the contract and said can you shave $5-$10 down, i do this now and again. They will subtract a little with a push…….also found some plans they don’t have online but they will find if you keep hounding them…no harm in trying.

      Groceries , same it’s the big one but i love cooking – i used to eat out all the time so just by switching to making stuff myself, cut by expenses down massively…then on top of this you get better at cooking meals that last 2-3 days, freeze stuff over, my restaurant bill is virtually $0 every month unless for special occasion. I read somewhere just by making your own lunch you save something like 500-1000$ a year..can’t remember the exact figures but it’s quite substantial.

      Little things aswell like i don’t drink any coffee from the stores – again, i used to all the time, 1 starbucks a day 5 days a week x 20 days – go figure. Reality sunk in, got a k-cup brewer so the coffee was 10% of what i was paying…then i just got a re-usable kcup and ground coffee which turned out even cheaper. If you don’t drink coffee at all even better ;)..

      even just cutting out a little bit here and then can bring in an extra $50-$100 per month, it all adds up.

    • Anonymous says

      oh and one other thing, i use the mbna smart cash CC, i pay it all off every month but it pays 5% back on all grocery shopping and has no annual fee..if you spend more than $600 per month, it’s capped but that still equates to $30 or so back to you every month. After 6 months or so it drops to 3%……again it’s small potatoes but all useful.

  5. says

    I’m continually amazed at your ability to vigilantly and diligently save for the future. It’s truly an inspiration.

    Now if you’ll excuse me, I’m so motivated that I’m on my way to the grocery store to buy some grits and day old bread.


    • says


      Thanks for the support and I’m glad you find the reports inspirational!

      Day old bread? That’s nothing. You need to be buying the week old bread from the back of the store. Haha! :)

      Take care.

  6. Anonymous says

    Hi! Mantra!

    Thanks for a great blog. I have some questions below:

    – Your expenses related to groceries are very low, do you have any advice for keeping them on this low level?

    – Will you actually quit working when your dividend/cost ratio hit 100% or will go down and work part time?

    – Except Vodafone, have you been keeping track of more European shares?

    Wish you the best!

    • says


      Great questions.

      As far as my grocery expenses, I try to eat cheaply as I’ve outlined before. Keeping your grocery bill down is a matter of portion control, keeping track of sales, staying away from lots of snacks and eating cheaper food like sandwiches.

      I plan on quitting work completely when I manage to exceed 100% of expenses with passive income. The only deviation of this plan that I would consider at the current moment is dropping down to part-time work before I get to 100%. I would consider semi-retirement if I was able to cover 50% or so of expenses with passive income.

      I track some European shares. I currently own VOD and TOT. I also track UL, BP, RDS among others.

      Hope that helps.

      Best wishes!

  7. says

    Wonder if you considered (I’m sure you already did) contributing just enough to HSA or deductible retirement accounts to reduce tax bill? I know that you want to retire early and access to retirement accounts is restricted until you are 59 1/2. I don’t have a HSA account myself. Just speculating a “What if” situation.

    • says


      I don’t have an HSA or any healthcare accounts right now. I do plan on changing that soon, however. Thanks for the tip. Once I go FI/ER I plan on having an HDHP.

      Best wishes!

  8. says

    I think your income/expense posts are some of my favorites! I need to get more diligent on tracking. How will I know how I’m doing unless I track better! Congrats on another successful month, even with those pesky taxes. Have a great day!

    • says


      I’m glad the income/expense reports are you favorites. These posts, along with the dividend income posts, are my favorites as well because they show real, tangible and measurable success.

      I hope your budgeting treats you well!

      Take care!

    • says

      Steve Mertz,

      Thanks for your support and congratulations. Very kind of you.

      The dividends are definitely adding up and quickly compounding themselves. The snowball effect has started.

      Keep in touch!

  9. Anonymous says

    Hello DM.
    Your dividend income from 4/11 to 3/12 was $1587, which is very close to the $1686 of federal taxes owed (paid in 3/12). In effect, you borrowed $1686 from the feds, and used your dividend income to pay back 94% of it. You had to use $99 of your hard earned money for federal taxes owed.

    I see this as a good thing (better than getting a federal refund at the end of the year – because in the case of getting a refund, one has lent the feds money, and not really rcvd anything for it). You used fed money and had your “soldier-dollars” pay it back for you.

    Thinking of your taxes owed in this fashion (borrowing from the feds and paying it back with divys), is a bit of a silver lining in the cloud of the US tax system, no?

    • says


      That’s an interesting way to think about it. I honestly didn’t look at it that way. Either way you slice it, money left my wallet which always sucks. But, it is what it is. I look at it that a large tax bill means I must be doing well, and for that I’m blessed and very thankful!

      I also agree that owing is much better than getting a big refund, because in the latter case you are giving the government an interest-free loan as you pointed out. However, it’s not good to owe too much as underpayment penalties can hurt.

      Best wishes.

  10. says

    Just writing to say I picked up some COP today. Not sure if the separating of the “Phillips” part is going to do for the stock, but I wanted to be a part of it :). It’s also under the 50 day MA, 10% off it’s high and been going the opposite way of the S&P in the past month or so. I also find investing a bit easier once I have an initial entry point.

    • says


      COP looks like a solid buy to me, and adding to your position before the split comes could pay off very well! I really like COP right now, but I don’t want to be too heavy in energy.

      Good luck with your investment!

      Take care.

  11. says

    Wow even with the high tax bill, you still had a decent month. You still get to buy a position or 2 and get closer to your goal, it’s not that bad. I was lucky enough to put HGIC in my ROTH and avoided the capital gains on that one.

    Looking forward to seeing how you do next month.

    • says


      Thanks for the support. I’m blessed to have had a decent month even with the large tax bill. Nice move on putting HGIC in your ROTH. I’d have a ROTH if not for my plans to access my capital early in life.

      Looking forward to your progress as well!

      Best wishes!

    • says

      I think you should do a Roth either way.

      1) you plan on living past 59.5 year anyway (I assume), so you can tap your Roth earnings tax free.
      2) your contributions can be taken out at any time w/o taxes, so theoretically you can take out what you have put in before 59.5 if worst came to worst.

      Can you imagine your tax bill if you were able to just live off the dividends of your Roth at 60 years old?

      Oh yeah, zero 😉

      With the amount of money you are putting in your investments every month I would think $5K a year for you is a drop in the bucket. And as stated above, you know you can use it at 60. You can’t contribute without earned income so it will be too late once you retire….

      Heck the perfect plan would be to put just enough into taxable to live from 40 to 60 then all ROTH. Take that Mr. Tax Man!

  12. Anonymous says

    Our savings rate was 55% in March and 53% avarage so far this year. That does not include retirement that is paid by the employer including that the savings rate is closer to 60-65%. Looking to get that up further since both me and my wife want to retire by our early 40’s and i turned 36 last week.

    / Olin

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