Wednesday, May 7, 2014

Income Update - April 2014

I'm a big proponent of tracking every single penny that comes into your hands if you're really wanting to make a change to your finances.  Mental accounting is too difficult to keep track of and the mundane everyday expenses get forgotten.  Once you keep a detailed history you can see that you're really spending $400 per month on restaurants or $100 on coffee or whatever little expenses that are fine by themselves but add up quickly to destroy a budget.  This is why I like to keep track of all of my expenses to help keep myself accountable and looking to see what areas I'm just plain doing poor in.  If you want to improve your finances, then please track everything for a 3 month span and then take action to make positive changes.

My expenses continue to come in pretty much in line with just minor fluctuation.  Luckily though I caught April on the downswing of that fluctuation and they came in at their lowest level over the last 5 months.  It's still way more than I'd like as total expenses ended up at $2,616.11 which is well above my goal of $2,350 in average monthly expenses for the year.  Yep, that goal is pretty much DOA but I'll continue to do my best to look for inefficiencies and where I can try and cut.  Overall food spending continues to be a thorn in my budget but I'm still not concerned with them.  I just want to be more efficient with my food spending and doing more cooking will help out with that.  Fuel expenses ended up slightly over budget thanks to a combination of higher gas prices and more driving.  There's not much I can do to curtail these costs because I don't do much useless driving so I expect these costs to continue to rise on average as gas prices continue to tick higher as the summer gets in full swing.

Total expenses for the month came in at $2,616.11 which was my lowest for the year so far, but it was still essentially a flat month since my high for the year is just $64 higher.  But progress is progress and I hope to be able build on this little bit of improvement.  My average total expenses are $2,658.35 so far in 2014.

The good news is that expenses made a little bit of improvement but my passive income made big strides.  I received $203.98 in dividends during April which was a 37% increase from January 2014.  Adding in the $3.26 in interest and my total passive income for April was $207.24 which covered 8.53% of my expenses, excluding my savings for my trip.  That compares quite nicely to January's coverage of just 5.66%.  Even better is that I received payments from Adsense and Seeking Alpha which totaled an extra $456.03.  Adding in that income brings my expense coverage up to 27.30% for the month.  As a dividend growth investor, the rising dividend stream is what I'm most concerned about but the extra income from online sources is great as that's extra money I can use to invest and build towards my goal of financial independence.  My FI Income, monthly income based on the 30 year US Treasury bond yield of 3.46% using my net worth excluding traditional retirement accounts, came in at $709.52.  I'm most concerned about the dividend income rising month after month but I also like to keep track of my FI Income to get a better overall picture of the potential monthly passive income I could generate.  My FI Income for the month covered 29.21% of April's expenses.



*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 Income 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 $6,596.75
Expense Check $2,068.78
TOTAL $8,665.53


Monthly Expenses
Category Budgeted Amount Actual Amount Subtotal
Mortgage $911.84 $911.84
House Insurance $127.92 $127.92
Property Taxes $371.08 $371.08
Gas $175.00 $177.12
Car Insurance $163.25 $163.25
Groceries $200.00 $207.44
Restaurants $100.00 $119.83
Bars $0.00 $41.72
Debt Payment (Fridge) $300.00 $300.00
Cell Phone $10.81 $10.81
Gym Membership $40.00 $40.00
Miscellaneous $55.00 $145.10
Gifts* -- --
Car Maint./Repair* -- --
Trip* $1,500.00 $1,500.00
EXPENSES SUBOTAL

$4,116.11
Emergency Fund -- --
Investing $4,710.63 $4,549.42
SAVINGS SUBTOTAL

$4,549.42
TOTAL $8,665.53
*Savings that is earmarked to be spent.  
**Expenses shown above are only expenses that I paid for.  My wife and I have split our expenses up due to my job having me out of town most of each month.  The current split is around 65/35.

I did better tracking my expenses throughout the month which is probably the reason why expenses came in lower for the month.  I still need to do a better job tracking but April was a good start on getting back on the wagon.

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

Also, I'm starting a newsletter that I hope to get going over the next month or two so go on and be the first to sign up to receive new posts to your email and newsletter!

How did you do on your budget for the month?  Is there anything you're going to focus more on in April?

18 comments:

  1. JC-
    I'm also a big proponent of tracking every single penny. I have a budget that I update each week to keep track of all of my spending based in different categories and keep track of my income. Maintaining and following the budget has allowed me to cut down in some areas and make sure I am saving/investing enough to reach my goals. It's always nice to keep track of so I can see my progress.

    One thing I like to do with my Adsense and Seeking Alpha earnings is take that cash and immediately turn around and invest it in dividend growth stocks. There is something poetic that I like when it comes to writing about investing and using any money earned from that to help grow my investments!

    Anyways, looks like a great month and keep up the good work!

    ReplyDelete
    Replies
    1. Dan Mac,

      That's not a bad idea. I might have to open up a new brokerage account and transfer the cash I earn online there to get a fully extra income source portfolio started. Plus it wouldn't hurt to diversify brokerages a bit too.

      Thanks for stopping by!

      Delete
  2. Well done PIP, yet another great month. Keep up the good work!

    ReplyDelete
    Replies
    1. Dividend Dream,

      Thanks. I try to be consistent, although also looking to make improvements. I think things are going quite well.

      Thanks for stopping by!

      Delete
  3. Good job!
    I do live by a budget and have for the past 30 years since I bought my first computer. I don't keep track of every penny of outflow. Just not my cup of tea.

    It is interesting that you and I are at about the same monthly income requirement to cover expenses. I require about $2,400 p/mo to make that happen. Once my rental real estate is paid off over the next two years, I could conceivably fully retire as my rental income would just about meet my minimum expenses. That will be a great day of personal financial liberation!

    You continue to remain on my blog roll because I enjoy your posts. Keep up the great work!

    ReplyDelete
    Replies
    1. Pay off my rentals,

      There's times where I'm not too concerned with tracking every penny but I think that's essential for people that are looking to make a big financial change. The biggest thing is to find out what works best for you. But after doing it for a while your expenses won't fluctuate that much.

      That truly will be a great day! I can't wait to get to that point although I think you'll be getting there a lot quicker than me.

      Thanks for the kind words and thanks for stopping by!

      Delete
  4. The numbers all look good to me. I need to bring in more income!

    ReplyDelete
    Replies
    1. WE,

      High income and low(ish) expenses is a great combination. And even better is increasing your income but keeping your expenses the same.

      Thanks for stopping by!

      Delete
  5. Excellent work budgeting and I'm excited to see rising income from all your contributions online, it's very well deserved :) Thank you for sharing!

    ReplyDelete
    Replies
    1. Ryan,

      It's pretty good to see and I hope to keep building on them. I didn't really start my blog for the purpose of earning money but every little bit helps.

      Thanks for stopping by!

      Delete
  6. Over $4,000 to invest in one month!? WOW.

    Keep it up!

    Mark

    ReplyDelete
    Replies
    1. Mark,

      It sure is nice although the problem I'm running into right now is finding investment opportunities.

      Thanks for stopping by!

      Delete
  7. JC,

    Even with higher expenses, your very high income continues to push that savings rate up. Impressive!

    I'd say the biggest difference between your higher expenses these days and what they were before is the house. Would you agree? I'm sure the house is completely worth all the costs, but I'd say that's the only real difference. Renting was obviously cheaper for you guys.

    Keep up the great work. I can only dream of that kind of income! :)

    Best wishes.

    ReplyDelete
    Replies
    1. DM,

      Yeah the house and related costs is pretty much the only real difference in my expenses. There's so many more expenses than just the mortgage. I think all the other expenses add up to around 2/3 of the mortgage payment. Renting was definitely cheaper and if it were completely up to me we'd have rented for another 2-3 years to continue building up our passive income. The house is great though and we both enjoy it a lot. I still need to work on getting pictures up for the house just to let you all see what we we got going on.

      Thanks for stopping by!

      Delete
  8. Great month and congrats on the side income earned from Adsense and Seeking Alpha. I'm working on building up alternative income streams as well. Keep up the great work!

    ReplyDelete
    Replies
    1. FI Fighter,

      The Adsense and SA income is nice and I hope to continue building both throughout the year. Every bit helps and since it's from doing something I enjoy doing, that's all the better.

      Thanks for stopping by!

      Delete
  9. Nice work! Even with the trip expense, you still managed to invest a large portion of your income. BTW...You have a great income! Do you get an expense check every month or are they done quarterly?

    ReplyDelete
    Replies
    1. AFFJ,

      I get one crappy paycheck each month and one awesome paycheck. Think $1k vs $6-8k. The only bad thing is that I get taxed like crazy on that big paycheck. I also get an expense check which is tax free and covers mileage, per diem and expenses incurred while working. Sometimes that's one check a month and sometimes it's two. It really depends on the timing of when jobs end during each month.

      The income sure is nice but it comes at a price. I'm away from home a good chunk of time which is all the more reason that I'm looking to reach FI as quick as possible.

      Thanks for stopping by!

      Delete