First, I want to prove to the world that it’s 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. Oftentimes, 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 $40,000, and learning to get by on half of it means you’ll likely be able to retire if you want to within 15 years or so. Making less means you have less potential income to save, but spending less means you need less passive income with which to retire off of.
The 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.
And finally, knowing that every dollar I spend is going to be published for the world to see serves as reinforcement to stay frugal. There’s been more than one occasion where I decided against a particular expense after realizing I might be a bit embarrassed to write about it.
So each month I will post my income and 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).
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The online income was yet again really fantastic. What you see here is net of quarterly estimated taxes, and I’m incredibly grateful seeing net income from writing routinely exceeding $3,000 per month. I’ve opened up on how I make money online before, and it’s pretty much the same overall formula to this day (hint: I write a lot). The only difference is that all of those income sources are producing more income now than they were last summer when I wrote that article. But I want to quickly note that I wouldn’t be making any money online if it weren’t for the support of you readers. I do my best to give back through the best content I can possibly provide, but I also wanted to take a quick moment and thank you all for your continued support.
Dividend income for April was also wonderful. But how else can you describe collecting hundreds of dollars in passive dividend income for essentially doing nothing? Make a great decision by buying stock in a high-quality dividend growth stock, and you’ll very likely be rewarded for the rest of your life. What’s not to like about that?
Other income was largely related to the sale of my car. I’m going to spread the profit out over the course of the year so as to smooth any month-to-month variances out. So this will provide a nice boost to my monthly savings rates for the rest of the year, just like it was a drag on my monthly budgets last year. The other $40 was due to a credit card cash-back reward redemption.
*The everything else category includes expenses I don’t have a regular budget for. Almost all the expenses you see in this category were related to our wedding this past month. So that covers paperwork and the wedding ring. Not too shabby when the supposed average of a wedding in the US is now just over $25,000. We did relatively well. The only other expense in this category this month was the $16 I spent on the design of the cover for my book. I think I did pretty well there, too.
Expenses were overall quite high this month. Not only was there the wedding to pay for, but also the trip to Omaha to attend the Berkshire Hathaway Inc. (BRK.B) annual shareholders meeting (which doubled as a quasi-honeymoon for us). That’s why you see higher transportation costs this month (I had to book a rental car to get to the airport in St. Pete) and somewhat high restaurant expenditures. We went out to dinner after our wedding and then there were a couple of meals out our first night in Omaha. We refrained from going to any restaurants for the first three weeks of the month, saving all of that for the inevitable spending related to those special occasions that we knew were coming toward the end of the month. All considered, I think I did okay there.
Gift spending was also up. Claudia’s son had a birthday this month, and I paid for the cake that Claudia ordered for him. And then there was a 50th birthday party for Claudia. So I ended up covering the decorations for the party as well as most of the food. I don’t expect any more heavy gift spending for the rest of the year, save Christmas.
The engagement ring category will disappear after this month. This was the last monthly expense related to the amortization of the cost of the ring, so I’m glad that I don’t have to account for that moving forward.
I believe everything else is more or less in line. I did have to pay for an annual fee related to the MailPoet email system I use to send newsletters to readers that sign up for email alerts. That’s one less thing to worry about for the next year.
I managed to save 48.9% of my net income this month. I’m very, very pleased with that result. That’s rather impressive, in my view, when considering that I paid for a wedding and a good chunk of a honeymoon. I say a good chunk only because the hotel costs will be realized in May’s report, and we had some restaurant visits in Omaha our last two days there, both of which fell in May. But this is my best result thus far this year, and I’m slowly getting back to the savings rates I’m used to.
One of my goals this year is to save 50% of my net income throughout 2015, averaged monthly. So far, I’ve hit rates of:
I’m now at an average of 40.3% for the year. I’m behind, no doubt about it. But I’m very confident that I can climb back and get pretty close to my goal, barring a large unforeseen expense. I’m anticipating a very strong summer of savings, as I’m really hitting my stride in terms of maximizing income right at the same time that a number of large one-time and temporary expenses are disappearing. Things are absolutely looking up for me. And this is all being done without a traditional full-time job and the comfortable paycheck that comes with. I’m very happy with how this first year of working online full time is going.
I expect May to be quite strong as well. The cash flow is looking excellent thus far here as we’re near the halfway point of the month, and most of my regular expenses are being held in check. The only major expense that I see hindering my ability to register a fantastic savings rate for May is the hotel expense for our stay in Omaha. Other than that, things look really great for May and the rest of the summer. I’m incredibly excited. Stay tuned!
How did April turn out for you? Save as much as you wanted? Are you on track to meet your savings goal this year?
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