Income/Expenses For September 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 September 2012:

$4,811–Regular Paycheck
$357–Dividends
$646–Bonus and Spiffs

Total Income: $5,816

Expenses from September 2012:

$490–Rent
$189–Student Loans
$124–Restaurants
$103–Groceries
$53–Internet
$99–Public Transportation
$66–Fast Food
$35–Pharmacy
$40–Mobile Phone
$30–Gym
$112–Everything Else*

Total Expenses: $1,344

*The Everything Else category includes expenses I don’t have a regular budget for. In this case, it was all gifts. I gave a gift to one of my sisters for her housewarming party. She just purchased her first house! I’m very proud of her. I also gave gifts to my mother and sister for their respective birthdays.

Income was huge this month! I’m very grateful for this. A couple things happened here. First, my regular income was higher than usual do to higher sales at work. I am on a 100% commission pay plan, so I get a percentage of my overall sales. These obviously vary month to month. September was particularly good in this regard.

My dividend total for September was the highest it’s ever been. So, that contributed to my outsized income total for this past month. Again, very thankful for that. Also, you’ll notice the bonus/spiff category was much higher than the norm. This was due to Google Adsense paying me out for the first time in many months and I also received a freelance writing opportunity. I was paid to write a few articles, and so that definitely helped as well!

Expenses were pretty well in-line, overall. The gifts obviously pushed me a little over my normal levels, but I’m always glad to give. The public transportation costs were higher than usual this month. This was due to visiting family in Michigan during Labor Day and when I flew back to Florida I had to take a taxi from the airport home. I took the bus to the airport, but I was unable to do so on my way home.

Rent is also higher. My rent was raised from $900 per month to a new rate of $915/month. I now pay $457.50 plus water, as my girlfriend and I split the rent. Food was a tad high. I’ve been significantly more flexible in this area lately, and increasingly so over the last six months. I spend a little more in this area, but I do get enjoyment from good food. I especially enjoy good food with good company. It’s an area I continue to monitor, however, as I don’t want it go get out of control. The $300/month range is now what I’m targeting. I don’t want it to go much over that, and landing at $250 or so would be optimal.

I managed to save 76.9% of my net income this month. That’s fantastic! It’s my highest monthly savings rate ever, so I am really grateful for it and proud of my diligence.

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
72.6% – April
55.2% – May
22.3% – June
29.9% – July
70% – August
76.9% – September

I’m now at an average of 52.5% for the year. Not bad, but way below my goal. I’m fairly confident I’ll approach a 60% overall savings rate, which will be what I accomplished in 2011. We’ll see. I’m not doing all that great in October, as I purchased tickets to fly home to Michigan for Christmas. It’s all about the journey, not the destination, however. I love setting goals and reaching them, and nobody is more anxious for early retirement than I am, but I’m also enjoying the path as I walk it.

How are your budgets doing?

Thanks for reading.

Photo Credit: RambergMediaImages

Comments

  1. says

    76.9% is very impressive! My company will get private funding next year so hopefully my pay will increase by then. I can save even more with the extra money. Anyways, keep up the amazing work! Happy investing and cheers.

    • says

      Henry,

      Thanks! I was lucky to hit such a large number. We’ll see how the rest of 2012 goes.

      That’s great news on your end. I really hope that you’re able to get a raise. That would be awesome to get a little extra cash every month to invest in high quality companies that will then also give you raises every year. That’s a raise on top of a raise!

      Best wishes!

  2. says

    DM,

    I’m with Henry, 76.9% is damn impressive!! Great job man. You are making strides one after the other. I thought you had a really nice 2011, but 2012 is shaping up to be a stellar year for you as well.

    Retired by 40? Please, you will be there by 35!! ;-)

    • says

      The Stoic,

      I appreciate the support, buddy. Thanks so much. I’m lucky right now to be doing as well as I am. I’m just taking it all in and taking advantage of the opportunities I have.

      2012 and 2011 have both been wonderful. I’ve been in a great position. The raise at the beginning of the year certainly helped. I’ve been working my butt off, so I’m glad that this is all paying off.

      35 would be nice, wouldn’t it? Even if I could keep going at this rate I doubt that would happen, but it’s certainly nice to dream. If I actually make it by 40 I’ll be in rare company and really, really grateful. We’ll see.

      Hope all is well on your end!

      Best regards.

    • says

      DGM,

      Thanks a lot!

      I got lucky this month. Income was at record highs and the expenses were kept mainly within historical norms. Food and public transportation were a tad high, but overall I’m pretty happy with where I landed.

      You’re doing a great job with the savings rate and investing goals as well. It looks like 2012 is treating us both very well, as did 2011.

      Best wishes!

    • says

      The Executioner,

      Sorry if that was confusing. That’s a common term for a bonus in my business. For instance, we might get a small $10 bonus for selling a certain brand of tires this month or for selling a detail. I include anything not on my regular commission check in this category.

      Best regards!

    • says

      Compounding Income,

      Man, I hope you’re right. Wouldn’t that be something? I definitely hope I’m somewhere close to that at 35, but I’ll still consider myself pretty lucky to get there by 40.

      Keep up the great work!

      Take care.

  3. says

    Oh, Internet..i was also paying $30/mth for 15mps high speed internet for 12 months, then they jack up the prices to $53/mth for the same speeds. It’s more expensive then cable TV!

    But almost completely needed for all types of wealth income these days from passive incomes, business startups, and for communications.

    • says

      FreeYourChains,

      Yeah, internet is definitely necessary these days. I no longer consider it a discretionary expense.

      I could probably get my rate temporarily lowered a little if I took the time to do so, but last time I tried that I was only able to get it cheaper by lowering my speed and I really didn’t want that. I think a solid internet connection is worth $50 a month, personally.

      Take care!

  4. says

    Great month here, DM…

    …and I’ll alos add a +1 to The Stoic’s comment.

    A couple of questions:

    I notice ads here on your blog. Do you include that income?

    Is your GF on the same path?

    • says

      jlcollinsnh,

      Hey, I enjoyed your podcast. That is a pretty cool thing going on over there. Also liked the MMM podcast.

      My online income is always accounted for and included in the “Bonus” income category. This month it accounted for about $200 of that income. I don’t get paid every month, as my threshold to trigger a payment from Google is $100.

      My girlfriend is on a bit of a different path. First, she’s much older than me; more than 10 years older. So, there is that. Second, she lives frugally like I do (she also has no car), but she isn’t particularly interested in retiring early. She’s always had a really nice work/life balance as she has mostly worked in education. So, she’s never made a large salary and she’s never really spent one either. She has just chosen to live a different way, and that’s fine too.

      Best wishes!

  5. says

    Hey,

    I was impressed by your diligence before this, but wow, a 76% savings rate is extremely impressive! Outstanding job! I am shocked by how much you make and how little you spend. I just discovered your blog and am excited to keep reading in the future. Great strategy!

    • says

      Kraig,

      Thanks so much for stopping by!

      This month was particularly good. If I could duplicate this month’s results every single month, I’d be in excellent shape. All in all, I do hope to save 60%+ of my net income long-term (until I’m retired).

      Glad you find some inspiration here. Please keep in touch!

      Best wishes.

    • says

      grox01,

      Great point there. My savings rate was particularly high this month due to a higher-than-average income. This is unusually large. However, I would stress that the easiest way to increase your savings rate is to cut expenses as much as possible, as those are largely in your control. My income varies, and is not totally in my control.

      I would also add that my spending level is far below the average middle class man in my age/income range.

      Best regards!

    • says

      DM,

      Another question, do you count your dividend income after tax or gross?

      I am guessing everything (Income, dividend, bonus..) is net, but just want to be sure.

      Have a good day and keep up the good work :)

    • says

      grox01,

      Great questions there.

      My regular paycheck income is net, or after tax. Same goes, for the most part, for my bonus income. Some of that income is from my employer, and some of it comes from online ventures. This was the first month where there was a significant amount of income in that category, and it’s hard to back out taxes.

      However, my dividends are listed as a gross. The problem is I include my tax payments, as I usually owe money to the IRS, in my income/expense reports. So, if I tried to back taxes out of my dividends now it would distort my taxes in February.

      I hope that helps!

      Best wishes.

    • says

      Ok, so what you are saying is that you are not charged the 15% tax upfront, but will cover it when completing your tax report in February and you are doing this like a business… you will deduct expense to reduce tax?

      I am fron Canada, so they take it up front… I only receive 85%.

      Any suggestion on how you manage to save some tax over it?
      Maybe you could cover it in a blog?

    • says

      grox01,

      Okay, I can see where you’re coming from now. I was unaware that Canada took taxes out of your dividends right away like that. Interesting.

      Yes, here in the U.S. the dividends hit your brokerage account as a gross amount and you have to either pay quarterly estimated taxes or you pay at the end of the year in one lump sum. Right now I’m paying one lump sum because my dividends are still relatively small. I’ll have to switch to quarterly payments very soon to avoid underpayment penalties.

      As far as saving for taxes the best thing to do is just to send in estimated quarterly taxes here in the U.S. and settle up at the end of the year. That’s most cost-effective, in my opinion, albeit with a little lost opportunity cost (minor).

      Best regards.

    • says

      grox01,

      Dividends are taxed here in the U.S. at either 0% or 15%, depending on your personal income tax rate.

      My dividends are taxed fully at 15% currently. This 15% shows up when I disclose my taxes in the winter, and that will come out of my net income. That’s when the reduction is actually realized for me.

      Best wishes!

  6. says

    DM,

    Outstanding savings rate this month! Looks like you are back on track and doing better than ever. Congrats.

    I’ve found that getting to and maintaining a 70%+ savings rate is a pretty challenging task. For whatever reason, I usually end up spending more on food or misc. purchases than I would like.

    Like you said, we’ve got to also enjoy the journey and not just be set on reaching the destination. Glad to see you are still making time for the important stuff – not sure if you are a Tigers fan or not, but they are off to a great start in the playoffs. Perhaps you’ll have even more to celebrate when you visit back home.

    Cheers!

    • says

      FI Fighter,

      Thanks! I had a great month in September. I doubt I’ll be able to repeat this again for the rest of the year, but I’m hoping I can average 65% or so for the last few months. Wish me luck!

      I agree with you. 70% is a pretty difficult number for me to exceed and maintain on a regular basis. It’s nice to exceed it once in a while, but my income is just not high enough for me to maintain that high of a savings rate and still enjoy my life to a large degree. 60%-65% is more attainable and realistic for me.

      The Tigers have had a great start. The team is loaded. I went to games when I was a kid when they played in the old Tiger Stadium. Haven’t been to the new stadium yet. I’ll have to check it out.

      Best wishes!

    • says

      PIP,

      Thanks! I hope the rest of the year is just as good though, however I doubt it due to lower sales forecasts and higher expenses due to the holidays.

      You’ll be receiving dividend totals much higher than me in short order, as you have now paid off debt and have a pretty high income. You’ll be killing it very soon! I wish you the best of luck.

      Take care.

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