I’ve been tracking my income and expenses online since I initiated this blog back in early 2011. I do this for a couple of reasons.
First, I want to prove to the world that it’s indeed possible to become financially independent at a relatively young age even if you don’t make a lot of money. I don’t make a six-figure income. I never have and I probably never will. But it’s not necessary. Often, people focus on income too much. Expenses are just as important because if you make $200,000 per year, but spend $190,000 of it you’ll never become financially independent. Conversely, bringing home $40k and learning to get by on half of it means you’ll likely able to retire if you want to within about 15 years or so. Making less means you have less to save, but spending less means you need less to retire off of.
Second reason I do this is because I want this to be a live look at one man’s journey. You can find countless books by financially successful people, but often it’s long after they’ve completed their trek to significant wealth that they’re then telling you how they did it. It’s easy to postulate. It’s much more difficult to actually show the whole process in action, for better or worse.
So 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 January 2014:|
|Day Job Paycheck||$3,899.00|
|Expenses from January 2014:|
|Rent & Utilities||$538.00|
*The Everything Else category includes expenses I don’t have a regular budget for. In this case, I spent $50 for an annual membership to Sony’s online membership for PlayStation 4. I received a PS4 for Christmas from my parents and it requires a paid membership to play online with friends, which, of course, one buys if you have any interest in playing games online. It’s cheap entertainment on an hourly basis, so I’m okay with this annual expenditure. The other $40 was for household goods including cleaning supplies and an A/C filter.
Income was fantastic. This was just a great month with really no area that requires improvement. I had a great month at work, and the new guy isn’t fully operational yet so my income hasn’t taken a big hit so far. Dividend income, as recently discussed, was fantastic. And the big surprise was the online income. I no longer track small spiffs for miscellaneous sales programs we have at work in the same category as online income, and will henceforth include these small bonuses into my regular paycheck income category. This is so I can tack my online income as a separate category due to my goal to achieve $12,000 in online income for the year. Obviously, this is a great start to that end as this was my biggest month ever! I had a great month here at the blog and combined that with new writing opportunities which allowed me to achieve this new level of success. And I thank all of you readers for your continued support!
But as you can see it was an extremely expensive month. It was one of the most expensive months I’ve had since I started this journey. Most of this was due the fact that I had to get a root canal. So you see a larger-than-normal health expense due to this. The root canal expense is behind me as well as most of the charges related to the crown. I still have a small amount due to the dentist once the crown is in later this month.
Food was a tad high again. It seems I bounce up and down on this from month to month. I’ll have a great month and then slack off for a few weeks. I’ll then get takeout once or twice and before you know it I’m well over what I want to spend. I think February will be expensive once again in regards to food expenditures due to Valentine’s Day, but looking forward I have a good feeling I’m going to reduce this down to the mid-$250 area for the rest of the year even as I continue to eat healthier than I used to.
Student loans are now higher than they have been for the last few years. I’m on a graduated payment plan, and I just hit the next threshold. It’ll be this expensive for at least the next year before it goes up again. Ahh, the costs of being a college drop-out!
You’ll see that car insurance went down quite a bit. I scored a small victory here as I switched from Geico to Progressive. While my rate was already much less right off the bat even with increased coverage on my 2006 Corolla, I also allowed them to mail me their “Snapshot” product to monitor my driving habits. Obviously, I’ve been taking it even easier than normal and they already gave me a 20% discount. Score!
I managed to save 49.8% of my net income this past month. It wasn’t a total disaster only because I had a great month income-wise, but I’m hoping to get my expenses down to normal soon. The cash flow situation is a bit better than it looks, however, because the $300 auto expense is just me amortizing the cash purchase of my car.
My goal is to save 50% of my net income, averaged monthly. So far, I’ve hit rates of:
49.8% – January
A pretty solid start to the year as I’m right on pace. I had a great chance to come out of the gate hot, but the root canal slowed my roll. That’s okay because even though I’ll likely see my income slowly drift lower throughout the year, I also don’t have such expensive months very often.
How was your January budget? Save as much as you wanted to?
Thanks for reading.
Photo Credit: RambergMediaImages