Income/Expenses For August 2012

ByDividend Mantra Team

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 2012:

$3,742–Regular Paycheck
$208–Dividends
$154–Bonus and Spiffs

Total Income: $4,106

Expenses from August 2012:

$476–Rent
$189–Student Loans
$176–Groceries
$103–Restaurants
$60–Fast Food and Pizza
$53–Internet
$59–Public Transportation
$38–Pharmacy
$40–Mobile Phone
$30–Gym
$6–Everything Else

Total Expenses: $1,234

*The Everything Else category includes expenses I don’t have a regular budget for. In this case, it was flowers for my wonderful girlfriend.

This was a pretty great month in terms of my expenditure control and my savings rate. It was a very welcome departure from the past couple months. I took a break from hardcore budgeting and frugal living over the last couple months to try and “re-enter” normal society and live like everyone else. When you get enough funny looks and hear about how crazy you are, you sometimes start to wonder if it’s true. I’m glad to say that I’m extremely normal in an abnormal world. As I asked before, why would I want to spend all my money on “stuff” when I don’t even own my own time yet? Even better, I found I no longer have a desire for many material things any longer. When I first started this journey and started clamping down on expenses, I found it to be a bit of a drag but I continued on for the betterment of my future self. But now I feel I have transcended the attitude where “I’ll live frugally because I want to save money and because I’ll be much better off in the future for it” and now I’ve realized “I don’t even really want things anymore and saving money has become extremely easy because I know that time means more to me than any material object”.

A couple things to note. I begrudgingly and regrettably sold my scooter! I made a mistake here. I was almost in an accident one morning on my way to work when a truck entered my lane as I was turning. The thought of me plastered out on the concrete scared the shit out of me and I promptly sold my scooter. I now regret that decision because it was based out of fear and not rational thought. Instead of riding the bus more and the scooter less and adjusting to this incident, I acted irrationally. Unfortunate. I do plan on buying a scooter again as I still believe it’s an extremely efficient and cheap way to get around.

I’m going to post my savings rate from the months that I was away from the blog, and you can see these numbers below. The savings rates were much lower due to a reduced income during the summer months where it’s slower at work and increased expenses. I purchased clothing for the first time in a couple years and updated my wardrobe. I also purchased a plane ticket to see my family for the Labor Day weekend holiday. Food and entertainment expenses were also much higher than my historical average. I’m looking forward to getting back on track, and this blog helps keep me honest!

The only thing to note for this month’s budget is that food was a little high. I hope to get that back down to normal over the next month or two and keep it there. I’m still coming down from a bit of a love affair with food. It’s possible to still eat well and healthy on much less, and I’ll be getting back to that soon.

I managed to save 70% of my net income this month. This was much higher than the last couple months and I’m really happy to post that! Thanks for the mutual inspiration, readers.

My goal is to average a 65% savings rate of my net income, monthly. So far, I’ve hit rates of:

30% – January
74.7% – February 
39.6% – March
72.6% – April
55.2% – May
22.3% – June
29.9% – July
70% – August

I’m now at an average of 49.3% for the year. Not nearly as high as I had hoped to be this late in the year and it is highly unlikely I’ll come anywhere near my goal at this point. I’m now just hoping to match the 60% savings rate I achieved during 2011.

How are your budgets doing?

Thanks for reading.

Photo Credit: RambergMediaImages

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32 Comments

  1. i really love your blog, just wanted to say thanks for keeping up the good blogging.

    Im from from Sweden and have become a dividend investor 6 months ago. ontrack for 2000$ in dividends 2013.

    Is there anyway to come in contact with you? would really like to have a US “stock friend” and hear your perspectivs for that side of the earth. Since im almost investing all my cash in the US.

    Also, i might come to Florida next summer, would be nice to sit down and drink some beer and talk dividends for hours.

    / Tobias from Sweden

  2. Hey DM,

    I (and many others!) are glad you’re back to blogging. Your consistency is as inspiring to me as your perspectives on frugality and investing.

    Lately I’ve found myself wondering about your student loans, and if you don’t mind I’ve got a question (actually two) for you. How much longer do you have until they’re gone for good? And have you considered just paying them off when you get near the end? I think you mentioned a while back being steadfast about taking advantage of your low low interest rate for as long as possible.

  3. DM,

    Great job saving 70% of your income this month; that is incredible!

    Don’t get down on yourself for spending on clothes and visiting family. Like you say, those are irregular expenses and you still managed to make more money than you spent.

    I recently begrudgingly bought some really nice work shoes since mine old ones were literally falling apart. Though it temporarily hurt my savings rate, I feel it was a good decision in the long run because these shoes (Allen Edmonds) can last decades if cared for properly.

    Keep up the great work!

    Fi Geek

  4. Tobias,

    Thanks for the support and I’m really grateful you enjoy the blog!

    Congrats on your success so far and $2k in dividends for one year is fantastic!

    You can easily stay in contact with me through my email, which is [email protected]. I usually respond very quickly. I’m more than happy to talk investing anytime!

    If you come to Florida, I’d love to meet up. I can’t go extremely far from Sarasota as I don’t have a car, but if it’s reasonably close I’d be up for renting a car for a day.

    Keep up the great work and good luck.

    Best wishes!

  5. Mustachian Acolyte,

    Thanks for stopping by! You’re doing great on your journey towards Mustachianism!

    As far as my student loans go, I still have quite a while until they’re paid off. i originally borrowed ~$30k, as I was not financially intelligent back then. I plan on paying as little as I can for right now as the interest rates are just under 3% last I looked and the interest paid is tax deductible. I haven’t quite figured out what I’ll do once I get close to FI, but paying them off in one swoop might not be a bad idea.

    Thanks for keeping in touch. I’ll have to stop by your blog and comment soon. I do visit often.

    Best regards.

  6. Fi Geek,

    Thanks! I hope to keep up a ~70% savings rate up for the rest of the year to get my average back up.

    I’m more than happy to spend money on family, as one of the main reasons I’m doing this is to spend more time with my family and friends back in Michigan. The extra expenditures on food, entertainment and miscellaneous things that bring no long-term value to the table is what upsets me. I’m not cheap, but I like to be thoughtful about spending money. I think that it’s important to be mindful about it.

    I know what you’re saying though. Certain things do bring value to the plate, and you point that out with the work shoes above. I went through something like that recently myself as my work shoes were also falling apart. I had some Doc Martens from 2006 and I just recently replaced them. I don’t know if 6 years is normal or not, but I definitely didn’t want to spend money on work shoes. Ya’ gotta do what ya’ gotta do.

    Stay in touch and I hope your journey towards FI is going well!

    Take care!

  7. You had a great month DM~ keep up the frugality and conservative thought process.

    I agree with Fi Geek above on the purchase of his shoes. I went to goodwill today and bought 2 nice designer-suits for 29 bucks a piece. (Thats my idea of splurging).

    As for me, some changes were made with my family moving near my wife’s parents house. This allowed me to add a 3rd rental property to my R.E. portfolio. Now I can focus on my dividend investing and continue lowering my monthly expenses too! =)

  8. Investing Early,

    Great move on the suits at Goodwill! That’s a tremendous pick-up and a great value. You never know what you can find there.

    Congrats on picking up a third rental property. You’re practically a real estate mogul!

    I’m still a little skittish when it comes to real estate; either owning my own or owning a rental property. I may allow some real estate in the fold someday.

    Best wishes!

  10. What about to invest part of your portfolio into AU market? It’s not difficult to find here mature, multi-billion companies with yield about 10%. It would give you quite a boost. Plus Australia is expecting to grow population fast, have practically unlimited natural resources and very healthy national debt. Sure, if Chine slow-down will continue, AUD would go down for a while, but in long-term AUD is going stronger.

  11. DM,

    Great month man! 70% is incredible. I’m curious if I will be able to attain the high savings rates you do once I settle down. Your monthly reports give me inspiration that it can be done.

    Glad to hear you are ok from your near miss on the scooter. I just bought a motorcycle a month ago and have had a couple of those myself. Stay safe brother.

    The Stoic

  13. jlcollinsnh,

    Thanks for the support!

    I hope to be on two wheels again soon, just less often. The problem was not necessarily the scooter, but the fact that once I had possession of it I overused it and used the bus less and less.

    Thanks for adding me to your quotes hall of fame! I’m honored and humbled.

    Glad to see you back writing again, and that trip you went on was epic! Hopefully I can travel like that one day.

    Best regards!

  15. The Stoic,

    Thanks! I had a pretty solid month coming back from some ridiculous spending over the summer. I really wish I would have just continued on doing what I was doing, but after I stopped posting on the blog I just kind of floated away a bit. That’s my fault, and although I may not be as strict on my spending for the rest of my life as I am now…I won’t be quite so carefree with it either.

    I read about your motorcycle on ERE. I wholeheartedly recommend one (or a scooter) with the caveat of being really careful and also being really conscious about when and where you’re riding. I’m sure I’m preaching to the choir.

    What I should have done was alter my riding habits instead of getting rid of it. The nice thing is that I sold it for more than I paid and I can easily get another one pretty cheap. Live and learn.

    I’m sure you’ll be able to knock it out of the park with the savings rates when you’re ready. You were killing it there for a while overseas.

    Best wishes!

  16. DM,

    I know you probably think you wasted those months, but I think from time to time letting loose is a good thing, if for no other reason than psychologically.

    “I don’t even really want things anymore and saving money has become extremely easy because I know that time means more to me than any material object”.

    Coming to this realization on your own is priceless and well worth a few months of “normal” living. You are correct, you’re the normal one and society is the abnormal.

    It won’t be long and you will be sitting back reaping the rewards from your efforts now.

    If I’m ever in the Sarasota area I’m dropping in to share a cold one. If you are ever in Ky. you always have a place to crash.

    Cheers.

  17. The Stoic,

    You make some great points there! I suppose the increased expenditures over a couple months were well worth the price of admission to true freedom from desire of material possessions.

    I’d love to have you swing in and have a great talk about the good life. If I’m ever in KY, I’ll take you up on that offer!

    Thanks again for the support! Much appreciated.

    Take care.

  19. DGM,

    Thanks for stopping by.

    Yeah, 50% is certainly nothing to sneeze at. Perhaps I was getting a little ahead of myself with that 65% savings rate goal for the year. It sounded pretty reasonable when I made it at the beginning of the year, but it’s easier said than done.

    If I can get it up near 60% on the year and come close to what I achieved last year I’d be pretty happy with that.

    It seems like 2012 is treating you and I very well, and just as well as 2011. Let the good times roll! 🙂

    Best wishes.

  20. Anonymous: But Australian companies get franking credits to prevent double taxation. Simple example: yield is 10% and the company paid their taxes in AU (30%) so you as a shareholder will get 10% + franking credits on another 3% and then you pay your own taxes depended on how much you earn (0-45%) so in the end Australian get somewhere between 13% and 8.5% …. In your case 10% because that 30% is canceled by franking credits… Only if the company paid here just let say 50% of their taxes and the rest in oversea you get 15% credits…

  21. Hey Dm,

    Both myself and a friend used scooters and have both since given them up due to close calls. Its better to pay alittle more for the safety of public transport dude.

    Geoff (NZ)

  22. I’ll have to research those franking credits, and how they effect US holders. That’s the first time I have heard of them. thanks

  23. Geoff,

    I hear what you’re saying. Safety is #1. I originally only bought the scooter as backup to when the bus was late…so I could still get to work on time. Unfortunately, it became all too easy to just jump on the scooter and go to work. The bus is actually just as cheap, or cheaper, than the scooter. I’ll have to stick with the bus for now.

    Thanks for adding that. I appreciate your thoughts on the matter.

    Best regards.

  24. I just found your blog through another site ( http://www.thedividendguyblog.com/ ) and I must say it’s an inspiration for me. I have a similar mindset as you, save as much as I can now and invest that in to dividend stocks. I’m not at 70% saving like you ( you make alot more than me ) but I’m close to 50% and watching those dividends grow every month is great to see. Site bookmarked and looking forward to more.

  25. I’m really jealous that your expenses are down to just over $1,200. I’m hoping to get mine down that low but I’ve got about a $150 gas bill every month mainly due to work. Great job getting back to a 70% savings rate.

  26. I thought that AU franking credits wasn’t available for foreign investors in ADR. Can anyone confirm this point?

  27. Hi DM,

    I’m also hitting about a 50% savings rate for the year. As you’ve stated is nothing to sneeze at but I understand how when you set a goal you really want to reach it.

    Glad to see your back at it!

  29. Larry,

    I’m glad you found the blog. Please stay in touch!

    Saving 50% of your income is great, and that’s my savings rate average for this year…so you’re doing excellent.

    Watching the dividends grow month after month is really encouraging and the tangible benefit is hard to ignore. Keep up the great work!

    Best wishes.

  30. Passive Income Pursuit,

    Thanks for the support.

    It’s impossible to get around that gas bill if you have to drive to work and there is nobody to carpool with. I’m lucky in that the bus goes straight from my apartment to work. Of course, I did move here purposefully for that reason.

    I’d like to get the expenses even lower, but there really is no wiggle room from here. At this point, I’m just trying to maximize income and keep the dividends rolling in. All part of the get-rich-slow plan!

    Best regards.

  31. The Kechi One,

    Congrats on hitting a 50% rate. That’s awesome!

    Yeah, I’m a little upset about not being further ahead and knowing that I will definitely not reach my goal. But, if I can hit 60% again even after taking the summer off I’ll be pretty happy.

    Glad to be back at it!

    Take care.

  32. Compounding Income,

    Thanks! Yeah, it was nice to post up a great budget after failing pretty hard over the last few months. You’re doing pretty great with your budgeting too!

    I definitely didn’t spend it all. I guess it wasn’t too bad when you compare it to the relative savings rate of an average American, but it was disappointing for me.

    I didn’t go to crazy after all!

    Best wishes.

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