Income/Expenses For June 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 June 2013:

$3,644–Regular Paycheck
$553–Dividend Income
$321–Online Income/Bonus

Total Income: $4,519

Expenses from June 2013:

$522–Rent
$189–Student Loans
$130–Health
$127–Fast Food/Pizza/Takeout
$109–Groceries
$45–Restaurants
$22–Public Transportation
$37–Pharmacy
$40–Mobile Phone
$30–Gym
$10–Fuel
$332–Everything Else*

Total Expenses: $1,598

*The Everything Else category includes expenses I don’t have a regular budget for. This month, most of the costs were due to a plane ticket I purchased ($215) to fly home to Michigan at the end of July for my sister’s wedding reception party. The ticket was incredibly cheap, but came with the restriction that I have to fly out of Tampa – which is a little over an hour away. So, a car must be rented in July and the expense for it will be accounted for then. The great thing is that my girlfriend is flying with me and we’re going to split the costs of the rental car. I also had to purchase some gifts for Father’s Day and my other sister’s birthday. Finally, I purchased a scooter helmet for safety’s sake ($78). Looking back on it, I overpaid a bit for the helmet as I could have purchased one online a bit cheaper, but I like supporting local retailers when I can.

This month was pretty solid. Income was again wonderful. I had a slightly above average month at work, while my dividend income was off the charts. That was delightful! My online income came in at a solid $185, and we ran some bonus programs at work for selling tires. I also cashed in some reward dollars on one of my credit cards ($36).

Expenses, overall, were mostly held in check. As I mentioned above, my only large abnormal expense was a plane ticket to fly home to Michigan. Other than that, everything else was solid. I try to keep overall food costs down to about $280 per month when possible, and I achieved that this month. That’s also factoring in taking my girlfriend and I out to eat 2-3 times per month. I would have had an even cheaper month food-wise, but I uncharacteristically ordered too much food on one Saturday night when we decided to get some Chinese delivery. We had enough for three meals. I need to learn the difference between pints and quarts!

There was no internet expense this month. As I mentioned in last month’s budget report, I called my provider and got a cheaper rate going forward as well as a statement credit. I have no bill this month and I’ll probably have a light bill next month too. 

You’ll notice rent was a little higher, and that will continue from here on out. That’s because my girlfriend and I agreed that I’ll pay half of the electric bill ($45) from here on out. We had a different arrangement before (I was paying for internet costs and also whenever we went out to eat or out on the town), but the internet bill is a bit cheaper now and we decided it would be best to pay half of everything plus pick up the tab when we go out. It’s the right thing to do.

I managed to save 64.6% of my net income this month. I’m extremely happy with that. If I could average that every single month I’d be ecstatic. Life has a habit of getting in the way of such things, but I continue to strive for my best day in and day out. Looking forward, I’m going to have some rental car costs in July and I also recently found out I need a root canal in a tooth I had filled about five weeks ago. Not fun. However, I’m currently applying for dental insurance to help foot the bill!

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
57% – March
71.4% – April
64.2% – May
64.6% – June

I’m now at an average of 63.5% for the year so far. That’s above my goal and I’m fairly confident I’m going to exceed my goal by the end of the year.

How are your budgets? Any unexpected expenses? Maintaining a high savings rate?

Thanks for reading.

Photo Credit: RambergMediaImages

Comments

  1. Spoonman says

    64.6% is awesome, DM, well done! I’m sure you’ve answered this question many times, but I am assuming you’ll do the same thing I will do with my studend loan: continue making payments but pay the whole thing off right before pulling the FI trigger. Right now I pay $118/mo (@1.8% interest rate), so I’m in no hurry to pay it off right away.

    $280/mo on food is pretty darn good. Once I hit FI, I’m hoping to do $200/mo by cooking at home a lot, with an occasional restaurant meal here and there. Do you guys do any batch cooking to keep food costs down?

    • says

      Spoonman,

      Thanks a ton! I really appreciate your ongoing support. You’re doing phenomenal over there with your dividend income (over $10k now, right?).

      You’re right on the student loan debt. It has a low interest rate (under 3% last I looked) and that interest is tax deductible. Also, the debt is pretty flexible in that I could apply for an income-based repayment plan if I were to ever lose my job or otherwise face financial hardship. I’ll keep it for now, but I do look forward to the day I can get that albatross off of me.

      We don’t really do any batch cooking. To be honest, I could probably use improvement in the food category. I really love food and it’s amazing that we don’t go out to eat more than we do. We talk about food and eating all the time. If I had unlimited wealth, great food would be tops on my priority list. I wouldn’t have a real nice house or a private jet or anything…but I would be eating some amazing food every day! :)

      Best wishes!

    • says

      Jeremy,

      You two are living the dream! :)

      Do you guys plan on traveling indefinitely, or is there somewhere you eventually imagining settling into?

      Thanks for stopping by and I appreciate the support! :)

      Best regards.

    • says

      We aren’t really sure where we will be next week even, so its a little hard to predict if/when we settle.

      Current thinking is we do all of Central and South America (and maybe Antarctica), then Europe (West and East) and North Africa, then Trans-Siberian Railway, India, Nepal, Tibet

      After that… who knows!

  2. says

    Ha, in a most recent article on Dividend Investing for Young Investors, many readers disagreed that someone in their 20s can save $3,000/month. I guess they do not read Dividend Mantra.

    Keep up the good work DM!

    • says

      DGI,

      Thanks for stopping by! And thanks for adding that comment.

      As far as what you’re talking about I would agree that we all have different means. Different education levels, different goals, different careers and everything else.

      However, and this is a big however, I believe that most of us make excuses. And I’m not trying to preach or criticize. I say that because I was guilty of making excuses myself not long ago. I started this journey deep in debt and I was busy telling myself that there was nothing I could do about it. But there is something you can do about it. The power to change (and save) lies within, and only when you realize that will you actually start to make progress.

      I told myself I couldn’t make more money, but here I am now making much more. I told myself I couldn’t get rid of a car or spend less on food. And yet I now live car-free and spend much less on food. So I think that we are the biggest roadblocks to our own success most of the time.

      Can’t save $3,000 in your 20’s? Difficult, but definitely very far from impossible. If you want it, you’ll do it.

      Best regards!

    • says

      haha, funny, apparently they don’t!!

      I must admit it is impressive achievement. But there is one thing which caught my attention because of Spoonman’s post above. Do you guys plan starting a family? With two kids it seems almost impossible to slash the food budget below $250 / mo unless you want to feed them with junk food and bulk food such as pasta with cheese, pasta without cheese, paste with ketchup, pasta with eggs, etc.

      When I started my family, my finances got a severe hit, because I wasn’t thinking about it before I jumped into a family life.

    • says

      Martin,

      I don’t plan on ever having children. This is a personal decision that I made many years ago, well before I started the journey to financial independence. At some point in the next year or so I plan on getting a vasectomy to ensure this.

      I do quite enjoy the idea of a lifelong monogamous relationship, however I have direct plans to never get married. Marriage, to me, is simply a legal contract and it’s just something I’d rather avoid.

      I agree with you that feeding a family would be difficult on under $250/month, but not impossible. I think if you stuck to buying the basics in bulk and avoided expensive ingredients/meals (steaks, certain fish) and focused on cheaper items like rice, beans, chicken, pork you could probably do it. It would depend on the size of the family. One child would probably be fairly straightforward. Two or more children would be difficult, and certainly restaurants would be out of the question at that point.

      Best wishes!

  3. says

    I think it’s amazing how you can keep your expenses down so low! If you can keep that up you will be financially free in no time at all

    Congrats on another solid month,
    Michael

    • says

      Michael,

      Thanks! I hope you’re right about “no time at all”! :)

      As of now, if I keep my current pace of saving and investing I’ll likely be financially independent by 39. However, it might be tough to keep it up. We’ll see how things go. I take it one month at a time, but the progress so far has been very nice.

      I hope you had an excellent June!

      Take care.

  4. says

    DM,
    Congratulations on your very low expenses. Your cell phone expense is high. Consider two things I am doing: $10 Airvoice plan with 250 minutes https://www.airvoicewireless.com/
    And for any other longer phone calls, consider the OBi100 VoIP which uses a google account – you can call for free anywhere in the US – I bought it off Amazon and it works great.
    RODENT

    • says

      Rodent,

      I’ll have to consider that. I looked extensively into different cell phone options before settling on what I have now. I even used a VOIP-only service for $10/month but the call quality sucked and only being able to make phone calls when I had wi-fi around didn’t help things.

      I’ve been happy with the service. I could probably shave $20 or so off this expense. We’ll see.

      Thanks for stopping by and adding that. I always enjoy a fresh perspective on areas where I can be more efficient! Sounds like you have a pretty good setup there. Do you have any kind of text message service with Airvoice? My family and friends like to text (I don’t), so that’s an important service for me.

      Best wishes.

  5. says

    so envious of your rent, I pay $925 and I am just renting a room in someone’s house..of the joys of SF real estate. However, I have a nice income for a 26 year old so I guess it comes with the territory.

    My expenses have increased slightly lately due to a gf. Including 401k, company match, and savings after expense I was able still save around $3500. I really need to get it back up to $4000 a month, not allowing the gf to persuade financial decisions will get me there.

    Good job on another great month! BTW you should at the end of the year tally up all expenses as I think that will be a better indicator.

    • says

      Took2Summit,

      I love me some dividends too! :)

      It sounds like you had a great month too. Saving $3,500 in a month in your mid-20’s is pretty fantastic, and well ahead of the curve. Keep it up!

      I hear you on relationships being expensive. It’s a quality of life thing. You could be single and likely spend less (going out less), but would you be as happy. There’s always a tradeoff.

      Keep up the great work. That’s some serious savings.

      Best regards!

    • says

      MFIJ,

      Thanks! I appreciate it.

      You’ve got a killer savings rate there. 55% is fantastic. That’s been about my average for the last couple years, so I’m really hoping to eclipse the 60% mark this year. I think if you could average 55% for a decade or more you’d be sitting very, very pretty at the end of it. I’d be very happy with 55%.

      I hear you on surprising expenses. I hate when people do basic budgets and try to show people how much they spend and only include rent, food, gas, etc. I find that the unusual expenses like gifts, airfare, clothes and things like that eat up a lot more cash than people like to admit. That’s why I track every single dollar and display it here. You can see my “Everything Else” category is usually at least $100. Life adds up!

      Beset wishes.

  6. says

    Another solid month. It’s great to see you ahead of your goal by the summer months. Those months always seem to loosen up the purse strings a bit with the better weather. Maybe you won’t be as effected by it since you have great weather for most of the year anyways. Keep up the good work!

    • says

      Pursuit,

      Yeah, our summers down here are a bit opposite from everywhere else. The summer is the worst season for us down here, and usually involves trying to stay cool in the A/C, whereas when I lived up north winter was the worst season when everyone tried to avoid going outside. So, it’s relatively easy to save money during the summer here. Kind of counter-intuitive.

      You keep up the great work too!

      Best wishes.

  7. says

    Thats a fantastic savings rate. Keep up the good work and thank you for sharing this with us. I am trying to up my savings rates, but have only been able to get to an average of 45% this year.

    Cheers!

    • says

      Roadmap2Retire,

      Thanks!

      I hope your road map is serving you well so far! It sounds like you’re doing pretty good, as a 45% savings rate is way above the average. Last I looked, the average American saves somewhere around 3%. So, you’re doing awesome! Keep it up.

      Take care!

  8. says

    DM
    Do you contribute any of your income to Tax Advantaged IRA programs? Can you explain the choices you’ve made? I’d love to hear your thoughts on this topic.

    Thanks! Love the site!

    • says

      Shermat98,

      I invest 100% of my free capital into a taxable account. This is because I plan on accessing the passive income the investments throw off (dividends) at a very early age (by 40, hopefully). If I started to divert some of my firepower (capital) towards an IRA I would have a much less likely chance of meeting my goal. I’m aware that I’m giving up a slight advantage through tax efficiency, and therefore I’m leaving a little money on the table, but that’s okay. The thing people forget is that I’m leaving A LOT OF MONEY on the table by choosing to not work through my 50’s and 60’s. I’ll likely be giving up over $1 million, so in the end my freedom as soon as possible is much more important to me than money.

      Best wishes!

  9. says

    Another fantastic month here. Is it weird that I secretly hope you do better than myself? Realistically, how long do you think it will take before you reach FI? I think 5 years, 7 years tops.

    It would appear you have enough for another purchase. I’m staying tuned!

    • says

      CI,

      You’re doing fantastic over there! You’re still ahead of me, so I hope we both continue to prosper. :)

      As far as being FI, I’m not sure it’ll be that fast. Right now I’m forecasting another 8 years, which would put me at about 39 years old. I think if things go just right it might be as fast as 7 years, but I don’t know if I can keep this kind of pace up that long. We’ll see. Life brings about changes, but I am extremely happy with the success I’ve been able to achieve so far. I’ll keep it up as long as I possibly can.

      I do probably have enough for one more purchase, but I’m likely to be sidelined for the rest of the month. I’m a bit confounded by the rising market, and it’s really tough to find any semblance of value right now. Also, simultaneously I’m trying to increase my cash position significantly over the next year. There may be a project that I might be a part of this time next year, and it will require significant capital. We’ll see.

      Looking forward to seeing what you do as well! :)

      Best wishes.

  10. Anonymous says

    Fantastic Job. Im also hovering around 60 percent of my income investing in mostly dividend stocks. I maxed out my Roth IRA today and Now I’m putting surplus to another brokerage with Scottrade. Jason you and Mr. Money Mustache, and Jason at Extreme keep me motivated. Kudos.
    By the way I killed the cellphone with a Voip OBI 100 which lets me make free phonecalls with Google voice at absolutely no charge. That will give me about 75 extra dollars toward building assets every month.

    • says

      Anonymous,

      Thanks so much! I’m glad that this site, among some other really high quality blogs, keeps you motivated and inspired. We’re all mutually inspiring each other!

      That’s awesome on the phone. Great job slaying that monthly bill! I have yet to part with my cell phone, especially seeing as how an emergency could happen at any time with me riding my scooter around. I could cancel the cell and pick up an Ooma or something, but I have yet to do so. Also, it’s tough for me to make phone calls at work, so if I don’t have a cell phone I might not be able to keep in touch with anyone during normal business hours.

      Keep up the great work! 60% is amazing. That’s really in the upper stratosphere of savings rates.

      Take care!

  11. Anonymous says

    im old enough to be your father,so I can tell this “thanks for getting a helmet”you are a good guy to remember your dad on dads day. BE CAREFULL on that scooter. Im 60 and I ride one as well I always have my helmet on

    • says

      Anonymous,

      Safety is definitely a priority. Hard to enjoy retirement if I get killed on my scooter.

      I rather like the helmet. Makes me feel a bit safer on the road, even if the danger is still incredibly high. :)

      Best regards!

  12. Anonymous says

    Thank’s so much for sharing your experiences. It’s been a very large inspiration into how i’m approaching life going forward. I’m at the beginning phases of putting together my own dividend portfolio and picking up the pieces of the last decade.

    My story on how i got into my financial hole since you were kind enough to share yours. I’m 32, make about 100k, had a wife for about 2 years (3 years date before that). Then she *ahem* decided to pursue other interests. That was of course after she convinced me to buy our dream house @360k right before the recession hit now worth 275k. Oof. Didnt sound that financially bad because the intention was to pay the house off with her salary in roughly 5 years. Long story short, at divorce time she was ready to default/threw a hissy fit/ect (god bless her little heart) and i ended up with this massive albatross of a house. I’ve been scrimping for the last couple years and i finally had enough money to do the re-fi resulting in a very large cashflow increase. I dont EVER EVER want to feel like i did for the last 4 years with that much debt hanging over my head always wondering if i would lose my job, ect.

    Aside from the above stupid decision (or was that two by getting married!) i’ve always lived conservatively. I look forward to using the same guiding principals of living frugally and building a steady stream of income such that i can pursue interests i chose at my leisure instead of being bound to an extremely stressful corporate culture (that does however pay well).

    Cheers :)

    • says

      Anonymous,

      Sorry to hear about some of the troubles, especially the divorce. That’s really rough. It’s hard to get ahead financially if your partner isn’t completely supportive and like-minded. I’m lucky in that regard right now.

      The best thing you’ve got going right now is that high income. That gives you some pretty thick armor that makes it hard to totally harm you. What do you plan to do with the house? If I had some big home/mortgage that I was stuck in I would try to rent out rooms or get the hell out of there. That’s just me.

      I wish you nothing but the best as you try to rebuild and make your future brighter than what your recent past has been. Sounds like you’re already moving in the right direction!

      Best wishes!

    • Anonymous says

      Recently had my new girlfriend move in with me which has been a great help financially. Between time/savings/refi i’ve managed to take the mortgage down to a very manageable level. Getting out wasn’t an option until just recently because it was sooo far under water a few years ago.

      So i have a tough choice of keeping a really nice home with a now-modest mortgage or just ditching it and renting. Unfortunately the area i’m in is NOT a low-cost area and rents are outrageous. So the math isnt exactly cut and dry.

      The piggy bank took a big hit with the refi. I think for the next year or two my goal is to use the big increase in cashflow from the refi to rebuild my safety fund back up to 5-6 months and any extra goes towards the dividend growth strategy.

      To be perfectly honest i think the only thing that saved me from having to file bankruptcy through the whole ordeal is that i’m naturally pretty frugal. I don’t take on debt that i dont have to, car paid off, student loans paid off, ect. So that gave me enough free cashflow that i could save enough to actually get out from under the house by myself. Bankruptcy probably was the option in hindsight but my ethics/morals wouldnt let me go down that path, it just wasnt how i was raised.

      I dont know if i could ever go as hard-core as you’ve done but its definitely an inspirational goal that im workings towards! I just dont ever want to be in that situation of feeling so helpless again, which is a pretty strong motivator. And that dream of near unlimited free-time… that would be nice to achieve in the next 10-15 years.

      Once again, thanks for your story. Wish you all the best going forward.

    • says

      Anonymous,

      Sounds like you’re making some good moves right now. I agree that cash flow is extremely important. If you’re living frugally and you have plenty of excess free cash flow and a strong balance sheet, it’s hard to sink the ship. I look at my own personal income statements, cash flow statements and balance sheet just like I would look at a company. Am I investment grade? Would I invest in myself?

      Sounds like you’re turning that ship around. I am sorry that you were held down by someone else, but I’ve found that every mistake I’ve made in my past made me a wiser and stronger person…even if it sucked at the time.

      Best wishes!

  13. Anonymous says

    1) A good place to get free entertainment is a public library. Most public libraries have DVDs.

    2) A good credit card to get is the Fidelity American Express card. It pays 2% cash back on all purchases.
    https://www.fidelity.com/cash-management/american-express-cards

    3) If you want to save money on dental work, a dental plan might be a better deal than dental insurance. The Careington 500 dental plan is one of the best.

    • says

      Anonymous,

      I agree the library is wonderful. I don’t go as often as I’d like because it’s all the way downtown, which is almost an hour by bus.

      I’ll have to look into the Fidelity card. I currently use a couple cards, but I do like my AMEX Blue Cashback which allows for a tiered reward program. It’s pretty nice.

      I’m currently in the process of getting a dental insurance plan. We’ll see what the final rate is. It sounds great so far, and be assured I’ll post up some information on it if it goes through!

      Best wishes!

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