Income/Expenses For August 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 August 2013:

$5,280–Regular Paycheck
$876–Online Income/Bonus
$342–Dividend Income

Total Income: $6,495

Expenses from August 2013:

$532–Rent & Utilities
$189–Student Loans
$143–Health
$188–Groceries
$162–Restaurants
$82–Fast Food/Pizza/Takeout
$77–Pharmacy
$43–Public Transportation
$40–Mobile Phone
$30–Gym
$19–Internet
$6–Entertainment
$4–Fuel
$236–Everything Else*

Total Expenses: $1,746

*The Everything Else category includes expenses I don’t have a regular budget for. This month, I had to purchase some headphones for the new podcast ($44), an air mattress for visiting family ($35) and I also had to reinstate my driver’s license ($156). I apparently had my driver’s license suspended quite some time ago because here in Florida if you cancel registration on a car and don’t turn in your license plate the state will suspend your driver’s license. That sucks, doesn’t it?

Income was simply fantastic this month! I didn’t go through all of my old budgets, but this has to be my highest month ever. Everything went just right here. I had a huge month at work, with my income for the month being far above what I normally earn for the month of September. In addition, I had a fantastic month of dividend income. Finally, my online/bonus income was superb. Most of this ($695) was income generated from this blog. The rest was extra bonus income I made at work for certain achievements.

Expenses were higher than I would have liked. Specifically, food was quite a bit higher than my average. This was due to the aforementioned fact that I had family in town for a weekend during the month. Two of my sisters, along with my new brother-in-law came for a weekend in August to spend time with me. It was a great time, but unfortunately there was quite a bit of extra food expenditures involved. For instance, I decided one night to take all six of us out to a great Mexican dinner which was $145. That’s a month’s worth of restaurant costs for me. In addition, I got pizza for us one night and that was $40.

The pharmacy expenses were also higher than normal. I had to stock up on bathroom supplies this month, in addition to laundry detergent and some kitchen utilities. I don’t have entertainment expenses every month, but there were a few Redbox $1 movie rentals in the budget this month. What can I say; I’m a cheap date!

The rest of the expenses were fairly normal. I was quite happy to keep transportation costs down to a minimum and there weren’t a lot of surprises. However, this wasn’t a particularly frugal month. I’m a bit disappointed by the amount of money I spent, but I’m hoping to improve on these numbers in September as I don’t have any big expenses coming up.

I managed to save 73.1% of my net income this month. I’m very pleased with hitting such a high savings rate, as I consider anything above 70% the product of maximizing opportunities as often as possible and the type of savings rate necessary to achieve financial independence at an extremely early age.

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
71.4% – July
73.1% – August

I’m now at an average of 65.7% for the year so far. With only four months to go, I’m extremely confident I’m going to smash this goal! I’m really excited, as I believe it’s my ability to maintain a high savings rate rather than my investment returns that will dictate my chances for an early retirement.

How did things work out for you in August? Stayed true to your budget? Any unexpected expenses?

Thanks for reading.

Photo Credit: RambergMediaImages

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39 Comments

  1. Hi DM, that’s great.

    I got rid of my gym fee’s by purchasing some weights – 6Kg, 10Kg dumbbells and a 8Kg medicine ball in addition I walk at least 90 mins every day and do the weights in the evening at home listening to music. Try to incorporate this into your schedule and you save on time/money trip to the gym. The weights (good quality) did cost around £150, but its a one off cost.

    You have to keep chipping away at those expenses one bit at a time ….

    Jon, London

  2. great job, you had a fantastic weekend with your family, you were generous enough to pay for their meal (so much for being a cheap skate as some would like to call you) your expenses were higher than normal (even tho I think your expenses are higher than normal every month 😛 ) and you still saved 73% of your income!

    Fantastic job.

    Took2summit

  3. Jon,

    Great advice there! I actually quit the gym for a while there and documented it on the blog. The problem I ran into with working out at home was motivation. It was hard for me to stick with it. When I got home, I ate dinner and then naturally migrated to the blog and researching investments and before you knew it the workout was over before it began.

    With a gym, I’m motivated because I’m already there and I’m gonna get something done. Plus, there’s a lot of like-minded people there training their asses off. It gets me going, I suppose.

    I may try working out at home again some day, but for now I’m okay with the $30. I look at it like cheap entertainment.

    Thanks again for the great suggestions.

    Take care!

  4. Took2Summit,

    Haha! I agree with you. It does seem like my expenses are averaging higher and higher. I think that is mostly due to the health insurance expenditures I didn’t have until recently along with the higher food expenses now that I’m eating a little healthier these days. I realize health is important and I was a little lean in this department before.

    Yeah, the weekend with the family was great. I’m super close to my family, even though that seems at odds with living so far away from them. It pains me to live here in Florida sometimes because of that, but we all try to see each other as much as possible. I’m actually flying up to Michigan the first weekend of October and then again for Christmas. We try to make it work. 🙂

    I hope you had a great month too!

    Best wishes.

  5. DGM,

    Thanks so much! I’ve been really lucky lately. September is shaping up to be both lower in income and expenses, but hopefully the overall savings rate is still high.

    I hope everything is working out great for you in your new situation! 🙂

    Best regards.

  6. Very impressive? Is this saving rate pre or post tax? Do you publish your gross or net taxes? Thanks for any reply, I love the blog and follow it regularly for ideas and inspiration.

  7. Captain Dividend,

    Yeah, my income has been abnormally high this summer. Last summer, my job income was about 20% lower and I didn’t have anywhere close to this type of online income either. It’s been really great over the last few months. I’ll take it as long as I can get it!

    Keep up the great work on your side too. 🙂

    Cheers!

  8. Anonymous,

    Glad you enjoy the blog! Thanks for your support and readership. Inspiration is exactly why I’m here.

    My income is net income, so it’s all after tax. It’s my “true” spendable income, as my gross income doesn’t reflect my purchasing power.

    Stay in touch.

    Best wishes.

  9. In August I prepaid a business expense which my business pays monthly. I received a 15% discount on a 2 year prepay, which is 15% gain on that money no matter how I look at it. I am not seeing anywhere else that will give me a guaranteed 15% gain on any of my money so I hope I might find a few more of these but I doubt it! Other then that I saved and/or invested 88.90% of what I took in in August, this will not be so for September, do any of you ever splurge?!

  10. Jason,

    Your savings rate continues to amaze me. Keep up the great work!

    Chuck in Ontario

    P.S. Enjoy your podcasts with Kraig.

  11. What a monster month! That’s a very beefy income alright. The blog income is nothing to sneeze at. I mean, $695 is almost like a second job! So, is the blog income we’ve been observing a sustainable trend? If you can sustain that kind of blog income you will be FI in no time. You are on fire!

    If forgotten to tell you how I plan to become rich: I will get your autograph now and then sell it 20 years from now for 2.2 million dollars when you are a world renowned FI guru! ;-).

    Have you thought about switching your phone plan to a pay-as-you-go scheme? I switched over to Platinum Tel three weeks ago and I have been very happy with the switch.

    Keep up the good work!

  12. I just wonder if you could have a look at ETF mdiv? It pays monthly div and seem plike a good addition.

  13. Are you going to consider US bond or CDs as rates start to increase? Don’t provide grow the way stocks do, but they yield guaranteed returns, that some stocks may not with less risk.

  14. Ok, first, nice job! The biggest part of your savings seems to be how low of a rent you pay. How are you able to rent at just $532/month (8% of income)? Most people probably pay closer to 20%.

  15. why would you want to invest in bonds when interest rates are about to rise ???
    The value of bonds tends to fall when interest rates rise.
    Stocks are a good hedge against higher interest rates and inflation.

  16. Hi Man,

    Amazing figures, especially the online income!!!

    Also congratulations for the podcasts, great way to learn and improve my english.

    Very truly,
    Manefla

  17. Katz,

    Wow. That’s an amazing figure! Keep up that outstanding work. I’m jealous. 🙂

    I do splurge once in a while. I think this month was a good example of that, taking part of my family out to a nice dinner. Experiences like that are exactly why I’m doing all of this.

    Take care!

  18. Chuck,

    Thanks for the support. Glad you like the podcasts!

    The savings rate could have been improved this month. It was a good month only because of the outstanding income. The expenses got a little out of control. But you only live once, right? 🙂

    I hope your journey is going well up there in Ontario.

    Cheers!

  19. Spoonman,

    Thanks! It was a great month. The blog income has been a welcome surprise. I can’t really say for sure if it’s sustainable. Obviously, it’s definitely not “passive”. However, I do love writing and inspiring, and so receiving a modest income in return for my time is wonderful. I would venture a guess the online income will be very erratic, so I’ll take my blessings when I get them. It’s great when I have huge months like this, but it doesn’t come with any type of regular schedule or certain assuredness like dividends do.

    That’s funny about the autograph. When the Today Show came out to my work I was promising co-workers a fantastic investment. The joke was that they could by my autograph for $50 now because it’ll likely be worth $55 one day. Haha. It was something along those lines. I had no takers, oddly enough. 🙂

    Thanks again for the support! Keep up the good fight.

    Best wishes.

  20. Stefan,

    I don’t invest in any ETFs at all. They’re just not my thing. I’ve talked about that in the past.

    Of course, for most investors out there I highly recommend index investing as a way to passively build wealth and generate income.

    Best regards!

  21. Hadamard Business,

    Haha! I can only wish it was that fast. I likely have nine years or so. I wish it was faster, but I’m definitely giving it all I’ve got.

    Thanks for the support and readership. I appreciate it!

    Best wishes.

  22. Anonymous,

    Rates have a long way to go before I’m interested in fixed income. I’ll likely have fixed income as part of my portfolio some day, but I don’t anticipate that being any time soon. Equities are just way more attractive right now. I’m almost 100% equities for this reason.

    Thanks for the great question!

    Best regards.

  23. Anonymous,

    Thanks!

    Good question on the rent. That represents my half of rent on the two bedroom apartment I share with my girlfriend and her child. Our rent is $925 per month. What you see above is my half of that as well as my half of associated utilities (electric, water, trash).

    I’d love to live in a cheaper place, but unfortunately this is the only one in town that is conveniently located along the bus line as well as many of the things we need. We have a grocery store, gym, mall, movie theater, shopping center and a couple restaurants all within walking distance. It’s the best location for living without a car in the entire city.

    Best wishes!

  24. Mantra,

    Congratulations on another great month!

    I had a question regarding your income and savings rate. I understand that you use net income for your paycheck, and that makes sense. However, for your blog income & dividend income, are you using “gross” (pre-tax), or are you reducing each of those by your estimated taxes on that income?

    If so, it seems like you’re mixing apples (post-tax work income) and oranges (pre-tax dividend, and possibly blog income), no?

    Curious to know if that’s what you’re currently doing, and what your thoughts on it are. Not as big of a deal now, but as your blog & dividend income continue to grow, it will start skewing your monthly % savings rate more.

  25. Anonymous,

    Great question there.

    My income from my job is net of taxes. Unfortunately, my dividends and online income can’t really be calculated as such because the income is paid up-front and the taxes are paid later. However, my overall savings rate will still be correct because I reconcile the taxes early in the year. That’s why you see a big dip in my savings rate in February. The taxes that I pay reduce my income and since I average my savings rate for an entire year the taxes are still figured in and my savings rate (on an annual basis) will be correct.

    Best regards!

  26. Aspenhawk,

    Thanks for the continued support!

    Looking forward to seeing what your budget looks like after you’ve cut expenses down to the level you’d like and you’re willing to share. Best of luck! 🙂

    Take care.

  27. Very glad to see you doing very well. May the lucky strikes go on and on and on… We all need to control our expenses, indeed ! I’ve got many useless expenses to cut, and only once I’ll have done I will tell you. Carry on your good works.

  28. My gym gave me a 10% discount just by asking. That’s more than €50 annually!
    There’s a lot of competition and they want to keep their loyal customers… 😉

    Another good saving tip is DIY liquor: Distill Your Own Alcohol.

  29. Anonymous,

    I’ve tried that, but with no luck. Our fees over here are fairly fixed. However, a gym will occasionally run a special period where memberships are specially priced. Even so, I consider $30/mo a good value for a gym membership. I definitely use the equipment and go enough to where it’s worth it.

    Thanks for the suggestion!

    Best wishes.

  30. Slight Edge,

    That MSFT dividend raise and subsequent buyback was a blockbuster. I regret not buying into MSFT when I was looking at it and it was trading around $26/share. You just can’t win them all. So many stocks, so little capital.

    Congrats on the big raise!

    Take care.

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