My minimum expenses for August came in at $1,489.46 which was my highest for the year so far. Not exactly a good trend that I have going as July set my previous high for the year. Luckily it's not expenses just creeping up but is more due to reasons I can't really control. My average minimum expenses for the first 4 months of the year were $1,370.09 and are at $1,446.57 for the last four months. Almost all of the difference is made up due to increased car expenses, which are almost completely attributed to rising gas prices coupled with driving more. At least there's an explanation for the increase, although the only real way for me to decrease gas expenses is to not work, which that doesn't make sense. August raised my average minimum expenses from $1,396.74 to $1,408.33. Well, I'm now over my less than $1,400 per month average I set as a goal for the year, but as I mentioned above it's largely out of my hands as I can't set the price for a gallon of gas. Luckily, my total expenses didn't increase as much and came in at $1,620.28. This increased my average monthly expenses for 2013 to $1,560.66. It's pretty good to see that while my expenses have increased over the year, my total expenses are keeping steady with my required expenses as far as the increase goes so it's not that I've been having random purchases creeping into my budget. Going forward my minimum expenses goal will have to be revised since my wife and I are closing on our house on Monday, which will bring added expenses.
As mentioned in my August dividend update, I received $174.32 in dividends last month. Adding in the $5.11 in interest income and my total potential retirement income for August was $179.43. My expense coverage ratio just from dividends and interest was great at 12.05% of my minimum expenses. This was higher than May 2013's coverage of 6.55% and August 2012's coverage of 1.34%, so I'm quite pleased. August was my first non-March, June, September, December month to cross the 10% threshold for my potential retirement income. My FI income, monthly income based on the 30 year US Treasury bond of 3.70% using my net worth excluding traditional retirement accounts, came in at $539.29 which covered 36.21% of my minimum expenses from August.
*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.
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I've updated my Progress page to reflect August's changes.
How did you do on your budget for the month? Is there anything you're going to focus more on in September due to August's spending?