Monday, July 8, 2013

Income Update - June 2013

When it comes to succeeding in personal finance a good offense is great but I'm a firm believer in playing good defense in the form of limiting expenses.  By having your expenses in check it allows you to turn more of the increased income from better offense into capital that you can invest.  This is why I like to keep track of all of my expenses and post them live on the blog to help keep myself accountable and hopefully provide some inspiration to my readers.  Overall it was a great month despite some higher expenses.  Most of the increase was due to much higher then normal gas expenses for my car.  But when you have a 700 mile drive back home, 600 miles roundtrip for another job and then another 280 to another job the gas expenses tend to creep up.

My minimum expenses for June came in at $1,442.76 which was my highest for the year so far.  This raised my average minimum expenses from $1,376.01 to $1,387.13.  I'm still doing well on this since my goal is to average less than $1,400 per month for the year, but there's still work to be done after the increase.  Consequently, my total expenses also increased and came in at $1,600.89.  This increased my average monthly expenses for 2013 to $1,544.50.  I'm hoping to get this a bit lower because I've been slacking some on tracking my expenses lately.  Overall it was still a solid month despite the lower than average income and higher than average expenses.  That's why it's important to have a great offense as well and as large a gap as possible between the two.

As mentioned in my June dividend update, I received $433.93 in dividend last month.  Adding in the $5.91 in interest income, my total potential retirement income for June was $439.84.  Since June set a record for my dividend income this also led to a very high expense covered ratio of 30.49%.  My FI income, monthly income based on the 30 year US Treasury bond using my net worth excluding traditional retirement accounts, came in at $453.47 which covered 31.43% of my minimum expenses from June.  Most of the increase in my FI income was due to the increase in the 30 year Treasury yield.

*Minimum Expenses are only the expenses related to rent, utilities, car, food, minimum payment on debt and other necessities. In other words, the required amount of replacement income I would need for financial independence.
*Total Expenses are the total monthly outflow of money.
*Potential Retirement Income is income received from dividends, interest, cash back from credit card purchases and any other source of income not related to my job.
*FI is my liquid net worth invested at the 30 year treasury bond yield at the end of each month divided by 12 to get monthly income.

Monthly Income
Category Amount
Paycheck $5,037.08
Expense Check $1,696.54
TOTAL $6,733.62

Monthly Expenses
Category Budgeted Amount Actual Amount Subtotal
Rent $480.00 $480.00
Utilities $221.00 $135.62
Gas $150.00 $248.09
Car Insurance $95.00 $95.00
Groceries $200.00 $169.29
Restaurants $125.00 $78.92
Entertainment $0.00 $48.54
Cell Phone $100.00 $97.61
Other $49.06 $49.06
Miscellaneous $55.00 $98.76
Gifts $0.00 $0.00
Trip $350.00 $350.00
Roth IRA $0.00 $0.00
Emergency Fund $30.00 $4.17
Gifts $75.00 $75.00
FI savings $4,703.56 $4,703.56
Car Maint/Repair $100.00 $100.00
TOTAL $6,733.62

I've updated my Progress page to reflect June's changes.

How did you do on your budget for the month?  Is there anything you're going to focus more on in July due to June's spending?


  1. Wow nice deposit this month, good job. Congratulations on your progress; updates likes this motivate me!

    1. Robin,

      I'm glad that it helps to motivate others because that's one of the main reasons for me keeping the blog active. This was a down month for me on the income side but the expenses were relatively in line with previous months so I'm happy about that.

      Thanks for stopping by!

  2. Nice work!

    Just posted my dividend income update today.

    Reading all sites, including yours, about dividend income is motivating :)


    1. MOA,

      It's very motivating to keep up and follow along with other people's journey. I love getting to check on the progress of everyone else. I know that I don't have any vested interest but seeing them take control of their lives and progressing towards their goals is awesome and helps to keep me on track.

      Thanks for stopping by!

  3. Pursuit,

    Great month!

    Our expenses were almost exactly the same, down to the penny. I also had some travel-related expenses, as I had to purchase a plane ticket to fly to Michigan for my sister's wedding reception party. Your income, however, killed mine! As usual. :)

    Keep up the fantastic work. The wealth snowball is building!

    Best regards.

    1. DM,

      I just wish travel expenses could come in cheaper because I love to travel. I'm excited that I've reached $100k in portfolio value and $1k in dividend income during the first half of the year because now there's some actual traction that's being built and a solid base to work off of. That's funny that our expenses were pretty much the same. I'm just glad that even though they were higher than normal, they are still allowing a big margin to save and invest.

      Thanks for stopping by!

  4. Nice work keeping those expenses under control! (Now I'm too embarrassed to share mine...) You saved over 75% of your monthly income which is incredible - if you continue at this pace you'll be financially independent in no time

    Keep it up!

    1. Dividend Tactics,

      A big reason that my expenses are kept so low is because I work away from home in remote areas. When there's really no options to go and blow money other than just at a bar or buying stupid things from Wal-mart it's pretty easy to save. Whenever I'm home more my expenses usually creep higher, although I think in the long run that can be fixed with the economies of scale you can have by cooking for two instead of one or eating out of a box.

      I'm hoping to get there sooner than I expect. I'm ready to have all of my time to myself now. The saying goes "good things come to those who wait" and while that's true I'm tired of waiting for FI. I want it now!

      Thanks for stopping by!

  5. That's a pretty impressive savings rate. I think if you keep that up you'll be reaching FI sooner rather than later!

    1. First Million,

      I do my best to keep it as high as possible while still living comfortably. Luckily I'm just naturally inclined to a very simple lifestyle. Sure if money was no object I'd live it up but I'd also be just as happy living in a cabin in the woods. The plan is to do just that but life has a way of changing things. A house purchase and possible baby could be in the works over the next 6 months to 2 years and those are some big changes. Take advantage of your savings rate while it's easy.

      Thanks for stopping by!