January ended up being a decent month as far as the budget goes but I've still got a lot of work to do to try and get things lowered. I mentioned in my 2014 goals post that I'm changing the way I calculate my expenses and savings. I usually save for expenses like gifts, property taxes, car insurance, travel, and more each month and some of those categories were counted as savings, even though they were earmarked to be spent. With the new year I'm now counting all of those savings categories as expenses rather than savings.
Total expenses for the month came in at $2,674.54. This was still well over my goal of $2,350 per month but at least it was a decrease from December's $2,721.19. The expense categories I'm focusing on for the year continue to be my food expenses, both groceries and restaurants. Well, groceries didn't go so well during January coming in over-budget by 19%. Ooops. I started doing much better with cooking during the second half of the month though so the grocery expenses started to slow down a bit and I'm hoping to continue that trend during February. Luckily though my restaurant expenses came in under budget. It wasn't by much but I'll take what I can get. Overall it was about par for the course considering that I didn't track my expenses during the month like I normally do. I've fallen off the wagon with keeping up on them as they come so I really want to focus on that to see what kind cuts to expenses that I can get.
Passive income expense coverage wasn't the best but I'm very happy with the progress considering how much expenses have increased over the last year, thanks mainly to our house purchase. I received $149.28 in dividends during January and another $2.09 in interest income brought my total potential retirement income for January to $151.37. I was able to cover just 5.66% of my expenses but that's still a big improvement from the 1.92% from January 2013. If you add in the $102.20 that I received from Adsense then the numbers look even better and expense coverage jumps to 9.48%. Since I don't consistently receive income from online sources I don't consider this to be a reliable source. Well, not yet at least. My FI Income, monthly income based on the 30 year US Treasury bond yield of 3.60% using my net worth excluding traditional retirement accounts, came in at $645.14 which covered 24.12% of my expenses from January.
*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.
|Category||Budgeted Amount||Actual Amount||Subtotal|
|Debt Payment (Fridge)||$300.00||$300.00|
I've updated my Progress page to reflect January's changes.
How did you do on your budget for the month? Is there anything you're going to focus more on in February?