Budget Check & Cash Flow Update - November 2018

Budget Check & Cash Flow Update - November 2018

The saying goes that cash is king.  While that's true, a more accurate saying when it comes to finances is that cash FLOW is king.  Whether you're retired, still working or just starting out the only way you can improve your financial house is to have positive cash flow.  

If you're in the accumulation phase then that positive cash flow allows you to save and invest to build up your future cash flow.  If you're already retired, or FIREd, then congratulations because I'm sure your cash flow is well above what you need.


We've been fairly lax in regards to our budgeting, but the time is right to really get things moving forward.  One of our big goals for 2018 is to focus on our monthly spending.  When it comes to personal finance it's rather simple: income - expenses = savings and savings x investing = financial independence.  There's obviously two main levers there and while we'd all like to increase our income, many times reducing expenses is some of the low hanging fruit that you can go after to increase your savings.

Budget Check

Total income for November came in at $9,478.96 which was well above for me.  It sure helps when you get paid bi-weekly and you get that 3rd paycheck during a month.  The majority of the income, $9,157.26, came from my day job.  Expenses dipped slightly from October by just over $300.  

Through the end of November my 2018 average monthly income comes to $8,289.20 while my average monthly expenses are at $4,710.35.  Average monthly expenses less debt payments comes to $3,636.80.

That puts November at a net positive cash flow of $6,081.71.  The official savings rate for November was 64% based off all income sources and 63% based solely off of work income, i.e. excluding dividends/interest.  

Cash Flow Check November 2018

*A few notes about the budget check.  All income is only income that I receive and does not include my wife's income likewise for the expenses.  We've found it's easiest for us to just keep separate accounts since I'm gone most of the time for work.  Also, pre-tax withholding for the 401k (I currently withhold 6% in order to get the full 5% employer match) and the ESPP through my employer (8% post tax withholding) are not included in the above savings amount.  

Non-Work Cash Flow

Each month I like to examine the state of our non-work cash flow.  Since our goal is to become financially independent the monthly cash flow has to come from somewhere in order to cover our expenses.  

Truly passive income, dividends and interest, totaled $321.70 during November which was about a $5 increase from August.  *Dividends are from my taxable accounts only.  

Based on November's spending the passive income for the month covered 9% of expenses.  

Thus far in 2018 I've totaled $5,442.56 from income outside a traditional day job.

Conclusion

As with all things life likes to change your plans.  While I desperately want to be get to rid of our non-mortgage debt at this time it makes more sense for us to build up our cash.  So debt reduction is currently put on hold, outside of the normal payments that we're making.  

Our plans will once again be changing or at least altered slightly after the chaos that was November.

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Has your monthly cash flow situation improved throughout the year, backtracked or held steady?