Income/Expenses For February 2013

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 2013:

$2,256–Regular Paycheck
$215–Dividend Income
$178–Online Income/Bonus

Total Income: $2,649

Expenses from February 2013:

$485–Rent
$189–Student Loans
$166–Restaurants
$82–Groceries
$129–Fast Food and Pizza
$53–Internet
$43–Pharmacy
$8–Fuel
$41–Public Transportation
$40–Mobile Phone
$30–Gym
$104–Everything Else*

Total Expenses: $1,370

*The Everything Else category includes expenses I don’t have a regular budget for. In this case, it included $10 for my yearly domain registration for Dividend Mantra, $35 to file my annual income taxes with Turbo Tax and the rest was for Valentine’s day presents.

Obviously not one of my finer months, but that’s because my net income was way down due to owing the Federal government a healthy chunk of change for income taxes. I file a 0 for exemptions, but I still end up slightly in the red at the end of the year because my checks are usually very light on a weekly basis with just one major commission check per month. That seems to throw things off a bit. In addition, I had hefty capital gains and dividend income which I owed taxes on. The dividend income definitely helped!

Expenses were mainly in line. I tend to average around $1,200 or so a month in total expenses, but this month was up slightly due to Valentine’s Day. That day included a rather expensive dinner, flowers and a small present. Exclude that and my expenses were average.

Food was high due to aforementioned V-Day dinner. That dinner alone accounted for about 30% of this month’s food expenditures. Excluding that one dinner puts me slightly below average for food spending.

Everything considered I’m rather happy with how this month turned out. I wrote a fat check to the IRS and spent quite healthily on Valentine’s Day and still ended up pretty good. There were no crazy, unexpected expenses that came at me from left field, which is always nice.

I managed to save 48.3% of my net income this month. Obviously well below where I’d like to be, but still rather nice considering the annual taxes owed. I hope this is the lowest savings rate month of the year, as I really want to achieve my highest annual savings rate ever!

My goal is to average a 60% savings rate of my net income, monthly. So far, I’ve hit rates of:

75.7% – January
48.3% – February

I’m sitting at an average of 62% for the year so far, after only two months. I expect February to be one of my lowest months, so I have high hopes of crushing my goal. I do, however, have a couple of costly expenditures coming up over the next few months. For one, I plan to fly home to Michigan to see my father for his 50th birthday at the end of March. Also, I’m slightly considering purchasing a cheap car and forgoing the so-far successful car-free lifestyle. This is for a number of reasons, but suffice to say it’s a lifestyle choice rather than a financial choice (obviously). We’ll see. I do quite enjoy the savings that not owning a vehicle offers.

How are your budgets going?

Thanks for reading.

Photo Credit: RambergMediaImages

Comments

  1. says

    DM,

    Still a really solid month with the abnormal expenses and V-day. Glad to see you’re on track to meet your goal. With the dividend increases and monthly purchases I’m sure that’ll help to push the savings rate over the 60% mark even though you’re looking at some other possible expenses. I’ll be curious to see why you might be picking up a car again. It is convenient but if I could go car free then I’d love to. They’re such a money drain but the convenience is way up there.

    Congrats on a great month!

    • says

      Pursuit,

      Well, the car is a lifestyle choice. It’s certainly the more expensive route, seeing as how I’ve saved a lot of money by being car-free over the last couple years.

      There’s social engagements I have a hard time meeting without a car and it’s certainly more convenient. Also, I can only live in a few different spots in my city due to bus routes. Having a car would allow more flexibility with that, as well as many other things. We’ll see. I’m not totally sold on it. Like I said above, I rather enjoy not spending the money and a car is a big source of expenses.

      Congrats on your great month too. You’re killing it!

      Best regards.

    • says

      Dtmheat,

      I don’t spend the dividends, but rather selectively reinvest them. I do not participate in any DRIP programs.

      I count the dividends as income because that’s what they are. I’ll eventually be living off the dividend income, using it to pay my bills. Even though I’m not spending them now doesn’t change the fact that it’s a source of income for me, which I currently use to invest with (just like I do with my day job income).

      Take care!

    • says

      Journey,

      Thanks for stopping by. I appreciate the support!

      Sounds like we’ll both be buying airline tickets in March. So damn expensive. I’m currently shopping for tickets and the cheapest I’ve been able to find after a week of looking is $485. Sheesh! But what choice do we have?

      Good luck in trying to keep March under control.

      Best wishes.

  2. says

    DM even though your passive income didn’t cover as much of your monthly expenses as you like, you still had a good month. Its great to see how you continuously focus on the finish line and how you monitor your expenses monthly.

    I guarantee you most Americans either: 1-Dont have budgets 2-Spend all their income as soon as it comes in or 3-Don’t really know where a majority of their money goes….

    • says

      Investing Early,

      I’m with you. I’m sure the majority of Americans have no idea of exactly how much money they’re spending, and where it’s really going. I think people tend to guess at what they’re spending. I know I certainly did before I set up my Mint account. It’s much harder to look the other way when the expenses are staring you right in the face. :)

      February wasn’t overly fantastic, but the tax bill was the main source of my monetary pain this month. Hopefully March is a little kinder.

      Hope all is well!

      Best regards.

    • says

      Kanwal,

      Thanks for stopping by!

      The dividend income is wonderful. It’s income that I didn’t have to clock in and bust my ass 50 hours a week for. Companies instead do all the work for me and return a portion of profits to my brokerage account. That’s an arrangement that I really enjoy!

      It will continue to grow, but not to stratospheric amounts. That’s because I plan on living off of it at a very early stage in my life. Life is short and I plan on exploring as much of it as I can.

      Best regards!

  3. Anonymous says

    Great job! We came in at 73% up from 68% in January which is 70% avarage so far this year. We will have a couple of even better months most likely in the first half of the year but then the second part will become more challenging as my wife will be on maternity..and we are planning an extended family vacation. Still hoping for about 60-70% for the full year…

    • says

      Anonymous,

      Wow! Phenomenal savings rate there. Keep up the great work.

      I’ve had many months over the 70% rate, but my average is always brought down by annual expenses and intermittent large expenses (air travel for one) here and there which causes the overall average to lag.

      If you can hit over 60% while having to tackle maternity leave and an extended vacation, that would be fantastic. I wish you luck!

      Best wishes.

  4. says

    wow, I never really thought about how out of whack living in California is compared to the rest of the country, but my rent is more than twice all of your expenses put together…yikes! the beautiful weather here does take away the sting a tad, but still…:) seriously though, it just gives me even more of a reason to continue on the path of DG investing..

    • says

      kolpin,

      Yikes! That’s incredible. I definitely do not plan on moving to California anytime soon.

      I find location very important not only to building assets and aiming to achieve financial independence, but also trying to stay independent. I purposely moved to Florida a few years back because there are no state income taxes and the weather is very favorable. I also found it easier to make more money down here. It worked out pretty great.

      States that tax dividends make it much more difficult to achieve FI, and keep it. Michigan, for instance, taxes at over 4%. That’s a pretty healthy chunk of change.

      Best wishes!

  5. Anonymous says

    Well done! But please remember that dinners, flowers and presents are also investments! ;)

    You got few more readers from Scandinavia…please do keep updating your blog…

    • says

      Anonymous,

      Great points there! I agree that those things are investments as well…investments in a relationship (some of the best investments!).

      Thanks for stopping by from Scandinavia! Wonderful to have a worldwide audience! :)

      Best wishes.

  6. says

    DM, I have good news! Your savings rate for Jan and Feb is actually closer to 66%! Instead of averaging the rates of each month, do (Jan savings + Feb savings) / (Jan income + Feb income).

    You’re doing better than expected! Keep it up!

    • says

      Mustachian Acolyte,

      Thanks for pointing that out! That’s the second time that’s been brought to my attention. Perhaps I’ll have to change the way I average my savings rate and no longer just average the month’s final numbers.

      On the other hand, if the way I’m doing it is showing a smaller number than what is actual then I’m erring on the conservative side which gives me a small buffer.

      Thanks for mentioning this. I’ll have to consider this.

      Hope all is well on your Mustachian journey!

      Best regards!

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