Budget Check & Cash Flow Update - March 2019

Budget | Cash Flow | Personal Finance
Budget Check & Cash Flow Update - March 2019

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 2019 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 March came in at $9,255.19 which was just shy of $1k higher than February's total.  Since we're still in the accumulation phase it should come as no surprise that the bulk of my income, ~87%, came from my day job with the remainder coming from interest, dividends and my blogging/writing.
Budget | Income | Passive Income
Monthly Income Breakdown - March 2019
Income for March showed a nice improvement, but unfortunately expenses were much higher than I'd like and ended the month at $5,967.16.  Before you get mad at me let me explain!

What I consider core expenses came in at $3,436.42 which was still high but all things considered it wasn't too far out of the ordinary.  The problem was our "other expenses".  I made an extra payment on my car which accounts for $425 of the $2,530.74 and there was also just over $200 spent to renew the zoo membership for our family which is money well spent.  

The big problem was the extra $1,753.38 that we spent on some new chairs for the house.  My wife has complained about the rocker we have in the nursery since we got it and with the new baby on the way we went shopping for a new chair...and ended up with two.  Ooops!  

We purchased 2 La-Z-Boy recliners and while I hated to spend that much money on them the quality is very good so they should last us 10+ years pretty easily and they were ridiculously comfortable which should make dealing with a newborn and the sleepless nights that come along with a newborn ever so slightly easier.  We had gone to a few stores looking at recliners but the ones we liked were all roughly $400-500 while the La-Z-Boy's were ~$800 each.  

All things considered I'm pretty happy to say that we were still cash flow positive by $3,288.03 despite the extra $2,500 spent on non-core expenses.  Our savings rate from all income sources was 36% and from work income alone it was 26%.  
Budget | Cash Flow | Savings
Cash Flow Check In March 2019

*A few notes about the cash flow check in.  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.  I break our non-work cash flow into 2 categories: (1) Passive Income - dividends from taxable accounts and interest, and (2) Non-Work Income - all income from outside of my day job.

Passive income for March totaled $1,052.82 and covered 30.6% of core expenses.  Non-Work Income totaled $1,243.21 and covered 36.2% of core expenses.

Through the end of the 1st quarter of 2019 passive income has totaled 1,766.70 while non-work income has totaled $2,646.87.


Last year saw a bunch of changes and other needs for our cash that didn't allow us to make as much progress as I would have liked throughout the year.  However, things are settling down and once we get back to our regular schedule after my time off with the newborn we can focus on reducing our consumer debt and then hopefully get back to regular investing sometime in Q3.  Reducing our expenses is going to be our main focus for the year which will be accomplished by (1) paying off my wife's car loan and (2) by looking for ways to save whether that's cutting back on some things or searching for new and cheaper alternatives.

March was a great month on the income front and despite higher than normal expenses we still managed over $3k of positive cash flow for the month.  A positive cash flow month is never something to complain about.

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What are you doing to improve your cash flow situation?  Are you working on reducing expenses or increasing income?