Income/Expenses For October 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 October 2013:

$3,514–Regular Paycheck
$832–Online Income/Bonus
$248–Dividend Income

Total Income: $4,592

Expenses from October 2013:

$532–Rent & Utilities
$189–Student Loans
$143–Health
$166–Groceries
$263–Restaurants
$80–Fast Food/Pizza/Takeout
$78–Auto Insurance
$36–Fuel
$45–Public Transportation
$42–Pharmacy
$40–Mobile Phone
$30–Gym
$19–Internet
$3–Entertainment
$154–Everything Else*
$480–Car Prepayment Fund**

Total Expenses: $2,296

*The Everything Else category includes expenses I don’t have a regular budget for. For this month, I booked my girlfriend and I a 1-night stay at The Helmsley Sandcastle at Lido Beach to celebrate our 4-year anniversary together ($137). I also purchased flowers ($16) for the same event. We stayed at this hotel earlier this year to celebrate her birthday, and we really enjoyed our stay. So, I thought this would be a great way to ring in four years together. We actually spent this past Saturday night/Sunday morning there and had a fantastic time.

**The Car Prepayment Fund is money I’m setting aside to purchase a car with. I set aside $500 in last month’s budget, and the $480 represented in this month’s budget is the remainder of the costs associated with purchasing my Frugalmobile, including purchase price, taxes, registration, etc. The great thing is that after just two months of budgetary expenses I now have a car completely paid for and going forward I’ll only have to include insurance, fuel and repair costs.

Income was fairly solid this month. My regular, day job income was a bit light, coming in at one of the lowest months of the year. This was more than compensated for by a great month of Online/Bonus income, however. I earned a total of $801.35 from this blog, with the rest of the income in that category coming from a small bonus program we run at work. I also had a great month of completely passive dividend income.

The rest of my expenses were rather high, unfortunately. Higher-than-normal food costs were the main culprit. Although it may look like I really hit the town this month, it’s a bit misleading. The reason I spent so much on restaurants is due to the fact that I took my entire family (10 of us) out to a great Mexican joint for a birthday party. One of my parents and one of my siblings share a birthday in October, and I flew up to Michigan to see my family and celebrate. In lieu of purchasing any gifts I instead offered to take everyone out to dinner. We had a great time, and it was worth every penny. The rest of my food expenditures were rather normal, historically speaking.

I now have expenses that I’m not used to having since I’m no longer car-free and carefree. Auto insurance and high fuel costs are something I’m still getting used to. It’s wonderful to have so much flexibility now, being able to leave home for work later and getting back home earlier. However, there are costs associated with the trade-off, as there always is. On the flip side, I won’t have public transportation expenses any longer so that will reduce that area of my budget to slightly offset the higher transportation costs.

I managed to save 50% of my net income this month. This was my second lowest month of the year in that regard, but that’s due to my purchasing of a car and not my inability to control expenses. Now that the initial costs of the purchase price of the car are all factored in I can move forward and hopefully improve on my savings rate as we close out the year.

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
61.3% – September
50% – October

I’m now at an average of 63.7% for the year. I’m on pace to exceed my goal, although the margin isn’t going to be as wide as I thought it would be. Looking forward, I still have a couple of fairly expensive months in front of me as I recently decided to upgrade my wardrobe for the first time in about eight years or so, and I also have the holiday season coming up and all the costs and gifts that come with that. Though, I am quite excited to still be able to exceed a 60% savings rate over an entire year. It takes incredible discipline and consistency to acheive a savings rate well over 10 times the national average on what amounts to a middle-class income.

How was your October? Did you save as much as you wanted to?

Thanks for reading.

Photo Credit: RambergMediaImages

Similar Posts

55 Comments

  1. Jason,

    Apologies if I am asking a silly question but I don’t have as much info as you re: your assets/liabilities. What is your interest rate on your student loans and how much is outstanding? Depending on your answers, would a rapid pay down of this debt be better than investing in a frothy market?

    Chuck in Ontario

    PS. Crunched some numbers and I am cautiously optimistic we’ll hit $38,000 in dividend income by the end of this calendar year. Setting an aggressive target of $45,000 for 2014. A 25% – 30% market correction ASAP would be welcomed!!!! 🙂

  2. Chuck,

    My assets are mostly laid bare for the world to see, as I just have some cash on hand and my cheapo car besides what you see listed in my portfolio.

    As far as the student loans go, my balance is about $19k at just under 3%. Not only is the interest rate fairly attractive, but it’s tax deductible. I think even with fairly expensive equities I should be able to do better than that. I guess if stocks continue to run-up from here I could look into aggressively paying these down, as that would lighten the load on my monthly budget. However, I still keep these around and pay the minimum because they are fairly flexible in terms of payoff, because if I were to lose my job or make significantly less money there are deferment, forbearance and income-based repayment options.

    Congrats on your immense success thus far. $38k in dividend income would easily retire me right now, today. That’s awesome! It’ll be many years before I see passive income like that. I hope you’re enjoying the fruits of your labor. 🙂

    Best wishes!

  3. nice job on your budget, i also recently took a bad hit to my savings rate. my income is drastically down for a while because i am taking an opportunity i hope will pay off in spades in years to come. i went from making 100k a year to 60k a year. 60k is still a great income for most people but i live in the peninsula just south of san fran. 60k = poverty line over here. However i do work in an industry where large incomes are the norm. I joined a team with 2 senior partners and I joined them as the junior partner. They both make over 500k a year, obviously i hope to be there myself in a couple years. in the meantime it is painful to see my savings rate plummet from 50-60% down to like 20-30%.

  4. Jason, experiences such as that family dinner are well worth the money spent. Especially as you get older and spend more time away from each other that time can’t be replicated.

    Your blog income has really be phenomenal the past 6 or so months. I am assuming the brief forays into the mainstream media really kicked that into high gear. If I recall you were in the $1-200 dollar range for a bit before jumping. Based on what I can see most all of your income is just Adsense and/or other PPC type ads. Pretty darn spectacular to be adding that as a continuing stream of income. Something to factor into your future post retirement perhaps as an added bonus! I know I’ll still be checking in and reading then!

  5. The figure that keeps sticking out like a healthy thumb is your blog income…801.35!!!! Holy macro that’s a chunk of change! It isn’t exactly passive income, but that kind of income can go a very long way in retirement. I mean, think of all the ice cream you could buy with that =).

    October itself was strange for me because of the house sale. I wasn’t able to make that many dividend stock purchases because I needed cash available for house selling expenses. The good news is that we were able to unlock quite a bit of equity, some of which we directed toward our dividend income fund. In essence, I got the albatross off my neck, killed it, and then feasted on it!

  6. I agree with your course of action. I didn’t know the rate was that low and that the interest is tax deductible.

    As far as enjoying the fruits of our labor…..we just reinvest the dividends so from a financial standpoint, we’re not relying on dividend income to acquire any fruits. 🙂

    For the most part, I enjoy my work (although if my employer were to stop paying me, my enjoyment would end immediately). My wife, however, is taking time off from work at the ripe old age of 50.

    Earlier this evening I was reviewing my employer’s internal website and was working on some “what if” scenarios re: defined benefit pension plan payments based on x number of years of continued employment. Who knows…maybe another 10 years of work? At this stage, we would like to continue to grow our dividend and rental income so when same is eventually inherited by our daughter, she will be able to make choices most people can’t make. We adopted her from a remote region in Siberia when she was 1.5 years old and we would like her to be in a position one day to dramatically change the lives of others less fortunate. It is a lot more difficult to do so if you’re broke so our intent is to generate a reasonable level of investment income by the time we expire. Having said this, we’re expecting her to work and to live within her means so she has sufficient money of her own to invest.

    Cheers.

    Chuck

  7. Man you’re killing it with the blog and dividend income! You still hit a 50% savings rate which is awesome even with the higher expenses! The end of the year is always great because there’s usually a lot of friends and family time, unfortunately its usually expensive. As I’ve grown older I find myself not wanting gifts for bday or xmas. I’d rather just get to spend time with my loved ones, especially since I don’t get to see them as often since I’m gone so much for work. Keep up the great work!

  8. Looking good DM,
    Congrats on keeping a high savings rate. It’s also awesome that your student loan rates are so low. My wife’s were 6%, so we just paid them off. My cousin’s are at 2%, so she’s just making minimum payments like you. Your blog income is pretty darn good Jason. What do you think it would take to boost it over the $1000 level permanently? Have you encountered scaleability issues or anything else you can share with us.
    -Bryan
    -Bryan

  9. Hi, I am new to your blog and I find it inspirational and fun. I have two question for you. Do you budget pre plan your budget and how? and secondly what book to your re comment for new investor. I want to learn how to find good businesses to invest in.

  10. As a family man with a mortgage, 2 cars, daycare… this budget looks like a dream. Good job on keeping expenses down!

    Your car insurance looks a bit high IF that’s per month. Are you carrying just the liability policy on that frugalmobile or is it fully loaded with collision as well? We pay about $30 per month on the two paid off cars that we own. I usually select the highest level of Liability and Uninsured Motorist coverage plus Comprehensive with a $500 deductible, but self-insure Collision. If you are interested, here is a bit more info: http://insourcelife.com/how-to-save-on-auto-insurance/

  11. This is really a great sum of this month!
    You can invest $ 2,000 in shares this month – great!

    I think this is also a way to measure its success:
    Target: $ 2000 per month to invest in stocks!

    The absolute level of income then no longer matters.
    You have only to reach the monthly $ 2,000 target!

    Keep going!
    D-S

  12. Hi Jason

    Great work on the savings rate and online income!

    I’ve worked my savings rate to 55% and budgeting for about 61 for next year.

    Truly inspirational stuff us aspiring to achieve FI.

    Kind regards

    Jarmo

  13. Chuck,

    I’m really glad you enjoy your work. That’s an envious position to be in. Personally, I find little satisfaction in what I do. It’s a combination of the long hours, general thanklessness of the position and constant grading.

    It sounds like you guys are in a great financial position, and passing along great lessons to your daughter. Keep up the great work.

    Best wishes.

  14. Took2Summit,

    Wow. Nice move. I really admire you for what you’re doing. Passing up more cash today for a better opportunity tomorrow is, of course, an awesome move to make, but not one most people would. Salute to you!

    I hope it works out for the best for you, and you eventually make senior partner. That would be fantastic.

    I often think of switching careers myself, but my pay cut would be much more dramatic than the one you received. It’s tough to balance the happiness quotient with the need to make enough money to continue saving toward FI. I’m doing my best with that delicate dance right now.

    Best of luck with the new position.

    Cheers!

  15. w2r,

    Thanks! Yeah, I agree that the costs are well worth it. Although I believe in frugality and sacrifice, this attitude is mainly towards unnecessary consumption, or buying things we don’t really need. Great experiences are usually worth the costs, especially when those experiences are shared with loved ones.

    Yeah, the blog income has been phenomenal. It’s all due to the tremendously supportive readership here. I’m really lucky in that regard. You’re right, the blog income shot up quite a bit after the media exposure. Before that I was usually around $150/mo or so in total earnings. It’s been amazing, and quite a pleasant surprise. It definitely allows for a margin of safety in terms of what kind of capital and dividend income I’ll need to live off of, because I have the extra income coming in from the blog. Of course, this can change at any time so I try not to rely on it in my forecasts.

    Thanks for the support! I hope our pursuit of passive income continues to serve us well. 🙂

    Best regards.

  16. DM great savings, being head of household, with 2 mortgage, 2 kids, car payment, this type of savings is difficult to acheive for me. But I try to spend on my needs rather than wants. Just the kids activities comes to $1200 every month. I max out my 401k. I wish I could save more!!!

  17. Spoonman,

    Haha! Definitely a healthy thumb. This blog has been far more successful than I ever thought it would be. I’m really lucky!

    It sounds like you’re happy to have the house sale behind you. I’ve never owned a home, but I always have this nagging feeling that having a mortgage would be stressful. Just the thought of having that kind of financial responsibility gives me the shivers. I mean I know that housing will always come with costs, and rent will never go away either. I don’t know. I would just somehow feel shackled by a mortgage. Enjoy the new freedom!

    Take care.

  18. Pursuit,

    The holiday season definitely comes with its set of costs. But, I still really look forward to this time of year. It’s taken on a new meaning for me now that I live so far away from family. Flying home and seeing the family for the holidays is really a gift all in itself for me. I’ve always been pretty close to my family, so living so far away is extremely difficult and it’s not getting any easier with time. I do sometimes contemplate moving back, but I also have a life down here in Florida. It’s tough.

    I hope you get to spend plenty of time with the family through the holiday season. I know what you’re going through in living far away from everyone for most of the time. Enjoy that time!

    Best wishes.

  19. Pursuits,

    Thanks! The blog income has surpassed all of my wildest expectations. To be honest, I’d be delighted with half the income I receive from Dividend Mantra. It’s actually gotten to the level to where it’s a part-time job in terms of time outlay and the income I receive from it. And I’m really happy with that arrangement. If I could do nothing but write and be compensated for my time I’d be very happy. That would be a job I wouldn’t really want freedom from.

    Thanks for stopping by!

    Best regards.

  20. Kinski,

    Thanks! It’s taken a lot of hard work and sweat to build the portfolio into what it is today, and I’m really glad I’ve done what’s necessary to put myself in the position I’m in today.

    I hope your journey is serving you just as well.

    Cheers!

  21. Bryan,

    Great job paying off the loans. At 6%, I’d be doing the same thing.

    As far as the blog income, I’m sure I could get it over $1k/mo if I really worked at it. For instance, I don’t have any affiliate partnerships yet. From what I understand, that’s where the real money is made online if that’s what you’re looking for. I guess I’ve always just tried to focus on the content, and throwing up some passive advertisements allowed me to do just that while still receiving some compensation for my time. Actively selling via an affiliate partnership isn’t something I really set out to do, but it’s something I consider sometimes. If I could make a really solid income from the blog I would definitely consider leaving my full-time employment behind and doing something part-time. If I could make say $1,200/mo from the blog and $1,000/mo from outside employment, I could still keep investing and probably keep up a 40% or so savings rate while working much less. I guess we’ll see.

    Thanks for the continued support!

    Take care.

  22. Anonymous,

    Thanks for stopping by. I’m glad you found the blog, and I’m really happy you find inspiration here. That’s why I write. 🙂

    As far as budgeting goes, once you start tracking every penny in and out for a month or two you’ll get a good feel for what you spend and where the excess fat is. From there, it’s easy to focus in on what you have to spend, and where you spend too much.

    As far as books go, there are a few I would recommend. First, I would check out Dividend Monk’s book at: http://dividendmonk.com/dividend-book/. Also, The Dividend Playbook by Josh Peters is pretty good. I would also recommend checking out The Single Best Investment by Lowell Miller. Although it’s not about investing directly, I would also recommend Your Money Or Your Life. That’s a classic.

    Best of luck to you!

    Take care.

  23. Insourcelife,

    I can imagine how having a family makes it difficult to attain a streamlined budget and save excess income. Although, I’m also quite sure that it’s worth the trade-off. 🙂

    That insurance is per month. The reason it’s so high is because I haven’t had car insurance in a while. Insurance companies penalize you if you haven’t had insurance recently. I have a great driving record and excellent credit, and I shopped the hell out of insurance and this was the best rate I could find. However, this will change once I get a record of insurance going again. In a few months I’m going to shop again and I’m quite sure I’ll find cheaper rates.

    Best wishes.

  24. D-S,

    Yeah, absolutely. Being able to invest $2k per month in high quality companies is a great position be in, regardless of income and everything else. However, I focus on the savings rate because it’s the primary determiner of how early you can retire. You can have two people, where one makes $1 million/year and the other $10,000/year, but if both people have a 70% savings rate they’ll both retire around the same time (around 9 years from the start).

    Best regards!

  25. Jarmo,

    Great stuff! A 55% savings rate is awesome. And 61% is even better. If you can keep that up for a decade or so you’ll be in a great position!

    Thanks for stopping by. I hope you stay in touch. 🙂

    Cheers!

  26. Dividend Mom,

    It sounds like you’re doing a great job in spite of having much more financial responsibility than I do. That’s great! You have a very nice portfolio and you’re maxing out your 401(k). I’d say you’re doing great. Keep up the good work!

    Best wishes.

  27. The Biz of Life,

    Thanks for the support!

    Kids can certainly make saving difficult. I decided a long time ago that having children wasn’t for me, but it wasn’t for expense concerns. Just a personal decision. That being said, I’m quite sure it gives me an advantage over those that have a family to raise. Although, the fact that you’re aware of your situation and generating wealth is fantastic. Too many people just give up.

    Take care!

  28. Congratulations on 4 years together. Good relationships are worth their weight in gold

    One idea for car insurance: If you buy one B Share of Berkshire Hathaway (~$120), Geico gives a steep discount on car insurance to stock holders. It’s like a tax free dividend 🙂

    If you ever make it down this way, dinner at the best Mexican restaurant in town is on me 🙂

    Cheers

    Jeremy

  29. Nice job again DM,
    Who knew that writing about dividends could bring in more $$ than the dividends themselves!. Congrats, you deserve the success. It’s a fine job that you are doing helping more folks become self directed investors.

  30. Jeremy,

    Great tip there on the Geico discount. I wasn’t aware of that. Very cool stuff! An 8% discount on the premium would definitely be worth the 1 share.

    Thanks for the dinner offer. I hope I get a chance one day to take you guys up on it!

    Thanks for the support. I really appreciate it I hope you and Winnie are doing very well (as I’m sure you are).

    Best regards.

  31. Integrator,

    Ha! Yeah, the blog has been incredibly successful thus far. I guess instead of writing about dividend growth investing I should be writing about blogging. I will say, however, that in the end it’s all about achieving freedom and independence, and I’m more than happy if part of the income necessary to fund freedom comes from inspiring others to seek the same. It’s a great position to be in.

    Keep up the great work towards $50k! 🙂

    Best wishes.

  32. The Helmsley Sandcastle at Lido Beach – Brown chicken, brown cow. Whoooooo Hoooooooo!

    Living Large !

    Roger H

  33. DM, you’re doing great. Even your “worst” month this year is extremely impressive.

    I’ve been thinking about your wardrobe upgrade. What makes you want to buy a bunch of new clothes all at once? I ask because, like you, I’ve run my years-old college student wardrobe into the ground. The button down shirts I wear to work are the same ones I had when I was a high school intern. Anyway, I’ve been slowly upgrading my wardrobe over time. For example, it took me a few months but I’ve managed to assemble a collection of four or five pairs of jeans that fit my needs pretty well. I cobbled them together from all over the place, like Costco, various Amazon sellers, and a trip or two to a retail store. Now I’m doing the same with my polo collection. I think I have four new polo shirts, all that I bought off Amazon, over two or three shipments.

    I see a few advantages. First, you’re not dropping a ton of money all at once. Second, I’m more comfortable incorporating one or two articles of clothing into my wardrobe at a time, and then retiring the saddest piece of clothing in that class. Third, often times I buy some article of clothing that isn’t as great as I thought it was, and this lets me return it without making returns a huge hassle — this works especially well buying from online retailers. Fourth, it has gotten me into this process of continually pruning my wardrobe. Every few months I try to give away some clothes, get rid of certain articles I never seem to wear, make my wardrobe a little more efficient and more effective.

    Your mileage may vary, but I’m definitely curious to hear what you think.

  34. DM: Saving 50% of your net income is still great. Occasional expenses like the hotel stay and family dinner are very justifiable and show that you’re not sacrificing everything to be frugal. Car-related costs will unfortunately become a recurring expense for you (like they are for me), but once again, they’re justifiable because the car will get you to work. Now that I’ve moved, I’ll be shopping around for car insurance soon to see whether I can get a better rate than what I’m paying now. (I discovered after my last cross-state move about 5 years ago that the rates from different companies can change substantially based simply on where you live, regardless of your driving history.) Regarding wardrobe additions, check out off-price retailers like Ross and TJ Maxx. When I moved I had to upgrade my wardrobe to look more respectable for my new job and I bought all my new pants at TJ Maxx for great prices (about 2/3 less than department store prices). The main negative at those places is that selection can be rather limited. Anyway, keep up the good blogging (the blog income is fantastic!)

  35. “Though, I am quite excited to still be able to exceed a 60% savings rate over an entire year. It takes incredible discipline and consistency to acheive a savings rate well over 10 times the national average on what amounts to a middle-class income.”
    This last part resume all the thing 😀
    For my part I’m now fully invested until January 1, I taken a cash advance to buy some bargained stocks in some dips (thanks Mr Irrational Market).
    So I reimburse this advance until mid December, taking a passive stance and waiting.
    Keep it up DM.

  36. Acolyte,

    Thanks for stopping by!

    Great question there regarding the wardrobe update. For me, it’s a bit more complicated than just being outdated. I used to be really into heavy weightlifting (I grew up a competitive bodybuilder) and so when I purchased most of my clothing I was a bigger guy. Now that I’m more interested in a sustainable lifestyle and simple living I’ve found slimming down and become much more active in cardio as attractive, and hence I’ve become much smaller. I didn’t want to spoil the surprise, but right now I’m killing my weight loss goal for the year and I’m currently clocking in at 178 pounds. I’m in great shape, and thus my old clothing not only looks ridiculous on me based on age, but also based on my size. I don’t spend money on clothing often, so I hope this is the last time for a decade or so.

    I’ve actually already completed the shopping, and did most of the heavy lifting at a local outlet mall. I found some really nice/high end clothing fairly cheap there. Although I spent my entire budget, I feel like I have a respectable wardrobe that fits very well. I tried to stick to quality materials that should last a while. We’ll see.

    I hope that explains some of my thoughts. 🙂

    Best regards.

  37. DGM,

    Thanks for the support! Although I had a poor month compared to most of the year, it is still a lot better than what I was looking at just a few years ago before I started this journey. 50% is great, but it’s funny how we can adapt to really high savings rates and be somewhat disappointed in otherwise great numbers. I guess hedonic adaptation cuts both ways!

    Good luck shopping for new car insurance. I hope you get a great rate. I’m definitely going to be shopping here pretty soon to see if I can get it down 20% or so.

    Cheers!

  38. DiYPensionFund,

    Great way to look at it! I could compare the monthly income to what a dividend portfolio would yield at 4% looking at the cash flow. If I was able to earn $800 every single month from the blog than that would value it at $240k using a 4% interest rate/withdrawal rate. Pretty crazy stuff! I think I’ll write an article about this soon. 🙂

    Best wishes.

  39. Jeff Baconnet,

    Thanks for the kind words.

    I hope for both of our sakes we get that long awaited pullback of 10% or more. It’s not looking good so far, but things could turn south quite quickly. Let’s keep our fingers crossed. 🙂

    Take care.

  40. DM,

    Great blog! I can’t believe I’ve been into dividend investing for over a year and just found you. I have a question regarding the amount of cash you keep on hand. I used to hoard cash like I currently hoard quality stocks, but I’m still clinging to what most would consider too much cash in a checking/savings account.

    Here is my situation…28 years old, no debts, Portfolio Value of $85,000 in quality dividend payers, monthly mortgage of $580, annual income of $45,000-$55,00.

    I’m currently sitting on $40,000 of cash. I invest regularly about $800-$1,300 per month, but never leave less than $40,000 in my savings account. Within the next couple years I could see having to purchase a newer, but used car and finish paying $15,000 for my wife to finish up grad school.
    Does this seem like too much of a safety net? How much cash do you hold?

    Thanks,
    Rob

  41. Rob,

    Thanks for stopping by! Glad you found the blog. 🙂

    That article you reference does sum up my feelings regarding an emergency fund. However, like I stated within the post the necessary size of an emergency fund will vary quite a bit. I keep a small amount of cash on hand because I rent, don’t have a family, have a large cushion between income and expenses and I also have a fairly large LOC.

    If I were you I might keep the cash necessary for a car, school and then a little on top of that for true emergencies, relative to the size of your budget. Perhaps $30k might be a nice, round number?

    At any rate, best of luck to you. You’re in a great spot! I was 28 when I started and I certainly wasn’t in excellent financial shape like you are. You’re already way ahead of the curve. Keep up the great work! 🙂

    Best wishes.

  42. Hey DM, Love the blog,

    A small suggestion, my wife and I use Esurance for our insurance and its really check just renewed for 6 months $311 bucks total. $51.83 a month. This is for a 00 Jeep Cherokee Full Coverage and a 07 Chrysler 300 Full Coverage. I don’t know if your insurance in FL is more than I pay in CO but that’s a big difference. My portion of the insurance is 21 bucks a month. Big time savings!

  43. Anonymous,

    Thanks!

    I really appreciate the suggestion. I’m embarrassed to pay so much for insurance right now. I actually plan to do some shopping this weekend.

    The reason I’m paying so much is because insurance companies penalize you for not having insurance prior to opening a policy. I wasn’t aware of this before being car-free for so long. Now that I have a policy, this should make it easier for me to find a cheaper rate. We’ll see.

    Congrats on your cheap insurance. Sounds like you’ve got a pretty good rate going there!

    Take care.

  44. Hello Mantra.

    I’m going to comment your monthly expenses bacause it seems that
    you have been struggling to get that 70 % average saving rate monthly basis.

    Let’s face it, getting steady 70 % saving rate with your income is very hard. You simply need to earn more money or start living even more frugally or take more risks when saving money.

    $532–Rent & Utilities

    C: This seems to be very cheap. In my country you would get just a doghouse with that rent.

    $189–Student Loans

    C: You have so much money already saved and still hang some student loans. Is it really more profitable to hang your loan capital and pay for interests than eliminate that whole loan away? Stockmarkets are bubbling unhealthy hights due to money printing. There might be correction coming downwards soon. I would sell some stocks and eliminate that loan which you do not need anymore.

    $143–Health

    C: I know this is personal stuff but still I would atleast try to cut this down. I’am not sure is this health insurance or what but if it is health insurance I would gamble and stop paying for it. Mostpeople might think I’m crazy but this is the one component of risk taking which is needed to get that 70 % saving rate.

    $166–Groceries

    C: For one person this is not much. I have use around 200 just for normal food even if I seldom buy any brand name food or pay for the normal price without discount.

    $100–Restaurants

    C: For frugal person this is a luxury thing. If this is your luxury thing, then you have to save more aggressively on something else. I never go to restaurants it is not on my alley, seen?

    $100–Fast Food/Pizza/Takeout

    C: I reckon fast food is very cheap in America. Therefore, I would suggest that you allocate your restaurant expenses to fast food category. With above numbers, for instance, you could eliminate your restaurant expenses and increase your fast food luxury for 50 bucks. Thus, you would save 50 bucks and get “50 dollar-more” luxury fast food. I call fast food joints luxury because I basically never buy their food. Instead, I buy frozen fast food from grocery store. That is my luxury.

    Nevertheless, 166+100+100 = 366 dollars per month for food and drink per person is way off the line. At least, in my opinion.

    $33–Public Transportation
    $7–Fuel
    $500–Car Prepayment Fund**

    C: I think the above costs are too small (SIC). In America, cars and driving costs are very cheap. Therefore, I would invest more money to the car than you did in your Ford. Unless, you are able to do the car repairs and maintenance by yourself. If not, I would invested like 4000-7000 thousand dollars to Toyota Corolla because that brand’s engines can take the “teeth of time” and burden. If you do not believe me, get inspection statistics from 7-12 old cars. Toytota’s were most seldom failed cars in the inspection. The only explanation for this is that Toyota is able to make good (frugalmobile) cars.

    $19–Internet

    C: This is OK. Remember to compete cable companies every time when the current contract ends.

    $28–Pharmacy

    C: Personal stuff, It is hard to save from here.

    $40–Mobile Phone

    C: In my country it is cheaper to get prepaid than regular mobile phone contarct because of monthly fees. With prepaid you might avoid monthly fees depending on your country’s system. More important thing is to stop calling unimportant phone calls and shorten long phone calls. There is the same analogy as lights on and off. Some people say that there is not any reason to switch off lights when no one is in the room. However, if you do switch off the lights when there is not anyone in the room, it saves money. Not much, but in the long run it will save decent sum of money. NOTE, this does not lower your standard of living! Back to mobile phones, when you call, you say what you have to say and end the call. This is all about habit, it is basically not even a frugal thing

    $30–Gym
    $10–Entertainment
    $75–Everything Else*

    C: the above three expenses seems to be frugal level. Not much saving potential.

  45. Anonymous,

    Thanks for stopping by. I appreciate your suggestions.

    I think my budget overall has some room for improvement. However, I’m not sure about some of the areas you are suggesting.

    For example, my HDHP health insurance protects me from catastrophic financial loss. If I suffer a severe health problem I could potentially lose every dime I have. For the fee I pay every month, this limits my loss to my deductible ($10k annually). I went for years without health insurance, so I did take a gamble. However, now that I have sizable assets the risk didn’t seem to be commensurate with the reward. Furthermore, I’ll have to pay fees for not having health insurance as part of the new ACA. So if I were to cancel my health insurance I’d still have to pay a fee and get nothing in return. Seems like a lose-lose.

    As far as my student loans go, the interest rate is just about 3% and the interest is tax deductible. If I felt like I couldn’t achieve 3% returns in equities then I would definitely just commit to paying off the loans. However, I think 3% returns are achievable from here. Furthermore, my student loans carry a number of flexible payoff terms. For instance, if I were to lose my job or take a significant pay cut I could sign up for an income-based repayment plan which would cap my payments to a percentage of my income. Seems favorable.

    My food costs are actually not just for one person. That’s a bit deceiving. If it were truly just me I was paying for my food costs would likely be half. I live with my girlfriend and her child. We probably average 1-2 visits to restaurants per month, which is a compromise on my part. I can be pretty extreme, and my girlfriend is less so. Besides, I do quite enjoy going out a couple times per month and getting some great food. Whenever we do go anywhere I pay 100%. This is because my girlfriend makes significantly less money than I do and I think it’s only fair. I guess that’s a little chivalry at play, but I think it’s the right thing to do. If I were alone I’d probably be going to restaurants less and I’d be only paying for me when I did go.

    As far as the car goes, I agree with you. Maybe I should have purchased a Toyota Corolla instead. They have historically been much greater cars. I did mention how I was shopping for one, but unfortunately the prices were much, much higher than the Escort. I couldn’t find a decent Toyota with less than 100,000 miles for less than $6k. All of the Toyota’s in my price range ($4K or so) had way more than 100,000 miles – some with well over 200,000 miles. The few that had less than 100,000 miles were priced typically somewhere around six thousand dollars. Maybe I should have paid up for quality. We’ll see.

    My mobile phone is a prepaid phone. I prepay $40 every single month and get unlimited minutes and text. There are probably some cheaper options out there now, and this is something I’m going to investigate soon.

    My car insurance is also way too high right now. I hope to lessen that significantly very soon. The reason I’m paying so much is because I didn’t have a car for a couple of years and the insurance companies actually penalize you for this. It’s like you are a new driver all over again with no record.

    Thanks again for the thoughtful comment. I do appreciate it. I hope to lessen my overall expenses in 2014 and get back on track. Having a car is going to dent my savings rate a bit, however I’m confident I can make up for it in other areas.

    Best wishes!

Leave a Reply