Income Update - September 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.

September wasn't the best of months for expenses but at least they were back on par with the average for the year.  Total expenses for the month came to $2,655.90 which was about $16 higher than my YTD average through end of August.  The worst categories continued to be grocery and restaurant spending with both coming in over budget.  I wasn't too surprised by that since there was a lot of back and forth throughout the month between the issues with our son, Lucas, and then my grandfather passing as well.  It's been a really rough second half of 2014 so far although things might start looking better for Lucas.  Maybe.  Who knows.  We're waiting on FDA approval right now.  With all that was going on I settled for a lot of convenience foods because I honestly didn't care to focus on my budget all that closely.  Hopefully October will settle down a bit and I can get expenses back on the right track but I'm not expecting things to calm down too much.  My average monthly expenses through September came to $2,641.54 for just a slight $2 and change increase.  Maybe they'll start moving back in the right direction in October.  At least that's the plan.

As far as dividends and passive income are concerned it was a banner month.  I received $698.60 in dividends and another $2.83 in interest which was my highest monthly total yet.  My monthly expense coverage came to 27.38% which is pretty cool to see considering my expenses are still much higher that I ultimately want them to be at.  That was around a 3% increase from June 2014.  As a dividend growth investor seeking financial independence, my goal is to eventually have enough dividend income coming in on a monthly basis to cover all of my expenses and allow me to consider early retirement.  So it's great to see that the long-term trend is higher.

My FI Income, monthly income based on the 30 year US Treasury bond yield of 3.21% using my net worth excluding traditional retirement accounts, came in at $702.04.  That was a solid increase from the $669 mark from the end of August, owing mainly to the increase in the 30 year Treasury yield.  My FI Income for September covered 27.76% of my 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 $6,291.35
Expense Check $1,629.29
TOTAL $7,920.64

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 $169.67
Car Insurance $228.82 $228.82
Groceries $200.00 $217.18
Restaurants $100.00 $151.35
Bars $0.00 $0.00
Debt Payment (Fridge) $300.00 $300.00
Cell Phone $10.81 $10.81
Gym Membership $40.00 $40.00
Miscellaneous $55.00 $127.23
Gifts* -- --
Car Maint./Repair* -- --
Trip* -- --

Emergency Fund -- --
Investing $5,400.17 $5,264.74

TOTAL $7,920.64
*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.

Overall I'm pretty happy with the way the budget ended up considering all of the other issues that were much more important.  I'm hoping that October will calm down in real life and thus allow the budget to start being under closer watch as well.

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

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


  1. i constructed a budget six months ago and I am finding groceries as a major item. For two of use, I have $550 in the budget and we are surprisingly spending around $750. It is amazing to see people spending only $200 - $300 each month. There must be no meat or other expensive items. I take my lunch each day and eat leftovers. We continue to look for ways to cut that expense.

    1. EAW,

      The expenses you see here are just things that I spent money on. Due to my work situation I'm away from the house/my wife for a significant portion of each month so we essentially keep our own separate budgets. It's just easiest that way. So if you add in the money she spends too then we're probably in the $500-600 range each month. I know we can probably cut some of that down if we were both home all the time through better meal planning and more efficient purchases but I wouldn't say that your $750 is that out of whack. Keep in mind that where you live will play a big role too. I live in Texas and food is relatively cheap compared to other parts of the country. Just continue to look for ways to improve your spending on food and you'll eventually settle on the right balance.

      Thanks for stopping by!

    2. $750/month for two people on groceries only or does that include alcohol, dining out, and bar expenses? Food expenses for my family of three is around $450/month, and I live in a very expensive part of the county, and we only purchase organic fruits/veggies, pastured/grass fed meat, eggs, and milk, and most of that is locally sourced including grains.

      alcohol, dining out, and bar expenses are tracked as separate categories as those can be controlled and managed differently.

  2. JC,

    You continue to kill it, bud. You might have spent a tad more than you would have liked, but you still had an excellent month. Your high income continues to smooth out any expense fluctuations, allowing you to maintain an excellent savings rate.

    I hope everything continues to work out okay for Lucas.

    Keep it up!

    Best regards.

    1. DM,

      The expenses are definitely higher than I'd like but over the next year or two I expect to be able to decrease them. Well hopefully, depending on inflation. The high income sure is nice since it gives a huge cushion.

      Thanks for stopping by!

  3. I'm in agreement with DM here. You continue to rock a tremendous savings rate even given your short-term expense challenges that are related to some of things going on in your life right now. I wouldn't worry too much about it and instead focus on the health and well being of you family!

    Also, way to bang out a $700 passive income month! That is incredible! Keep on rocking!

    1. w2r,

      Since there's a large cushion I'm not concerned with my expenses yet. Heck I didn't even tally them all up until the 28th or so of September. There's so much more to focus on right now. I'm hoping we can hear news from the doctors today. We're waiting on FDA approval for a procedure that could drastically increase Lucas' odds.

      Thanks for stopping by!

  4. Wow, and you are what? 28 years old? I hope my finances look as solid as your when I hit your age (in 3 years ish). I'm sorry to hear about your grandpa and the issues with your son.... Best Wishes.

    1. Clay,

      I wish I was still 28 but I'm 30. Just keep at it and eventually you'll be set up nicely. Hopefully you'll be getting a nice salary bump once you get your MBA. Devote most of that to savings and you'll be able to supercharge your saving/investment.

      Thanks for stopping by!


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