Andy Hough

I made $4138.30 in February and put $2000 in savings for a savings rate of 48.32%. That is just a bit higher than last month’s savings rate. I’m happy with that savings rate. I’m not putting money into savings quite as aggressively as I did last year. I’m planning to hike and do a bit of traveling this year after I finish my tax job. It doesn’t make any sense to put money into savings and then have to pull it right back out for travel expenses so I’m trying to save a little travel money outside of my savings.

My safe withdrawal rate decreased to 42.89%. That is still a long way from my goal of a 4% SWR, but at least I’m continuing to make progress. I should be able to get my SWR into the thirties this month. The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. Once I reach that point I will consider myself financially independent. I now have 27.97 months of expenses saved compared to 25.91 months of expenses saved last month.

Keeping my expenses down helps my SWR a lot. I use my trailing 12 months of expenses when determining my SWR. Last March was a low expense month so even if I have another low expense March this year I won’t change my my trailing 12 month average much. May and June of last year were high expense months. I’m hoping to replace them with low expense months this year. If I am able to do that I should be able to reduce my SWR quite a bit even if I don’t manage to save much money those months. My current average monthly expenses based on the last 12 months is $1196.77. If I were able to get my average monthly expense down to $1000 then my SWR would only 35.84%. I think it is possible to get my average monthly expenses down to $1000 without impacting my quality of life and will keep working on getting my expenses to that level.

Here is a breakdown of my income for February.

February was a good month for income since I did receive two paychecks for full-time hours.  It could have been even better since I could have worked about 40 hours of overtime during the month.  Even though the overtime pay would be nice I’m just not motivated to work overtime right now.

My online income continues to do better than I expect. I’m not making anywhere near as much as I used to online, but it is still good money considering how little time I devote to it.

My passive income such as referral income from sites like Mr. Rebates and dividends is pretty small, but it adds up over the year.

The tax return was a nice bonus.  Last year I owed about $1000, including a penalty, when I filed my 2012 return so I upped my withholding in 2013. That combined with my online income being much lower resulted in a big refund this year.  I know you’re not supposed to want a big refund, but I like it better than having to pay.  I’m going to keep my withholding the same this year.  Maybe my online income will increase again and I’ll end up having just enough tax withheld for the year.

I also had a stock sale for a small profit.  I usually don’t count these as income or losses since I just add or subtract them to my savings amount.  This stock purchase was never counted as part of my savings and I purchased the stock with the intention of trying to turn a quick profit from it so I’m counting it as income. I participated in an IPO with LOYAL3  and managed to make a small profit. Not having to pay any trading fees helped.  I also managed to make about $20 in credit card rewards by using my Barclaycard Arrival™ World MasterCard® to make the stock purchase.  I’m not counting that as part of my profit.

*Post contains affiliate links for two products I use and recommend.

Here is a breakdown of my expenses for February.

My February expenses were nice and low. Not only did I make my normal goal of keeping my expenses under $1000 a month, I managed to keep my expenses under $900 for the month.  Having a short month helped some. The main thing that helped was that I didn’t have any unusual expenses or have any big bills due this month.

Getting my transportation expense down to $79 this month after spending almost $400 last month was the biggest difference in reducing my spending.  Since I only live five miles from work I drove a lot less than normal during the month.  I also had a credit card cash back amount that I used to cover some of my gas expense.  My car didn’t need any expensive repairs during the month. The only problem was a burnt out turn signal bulb which is something I can easily do myself and just had to spend five bucks on a new bulb.  I’m hoping my car maintenance stays that simple the rest of the year, although I doubt I’ll be that lucky.

My only travel expense was a $99 annual fee for my new Southwest credit card. This card came with a 50,000 mile bonus which is supposed to be worth at least two flights.  After looking at the reward miles options on Southwest, I think I will be able to get three or four flights out of the card. I thought about leaving the fee off since I’ll be getting a lot more value out of the card then the cost of the fee.  I decided it would be more accurate to count the fee as a travel expense.  The fee was reduced some by a travel redemption on my Barclaycard Arrival™ World MasterCard® – Earn 2x on All Purchases.   I do have a short vacation planned at the end of this month so this category might be a little higher unless I can get some more free travel from my credit cards.

The entertainment expense might have been a tinier bit higher than I’d prefer, but it was reasonable since there were a couple of special events during the month.  It will probably be a little high again this month since some of my vacation costs will likely be categorized as entertainment expenses.

My other expenses should remain about the same.  I’m hoping March can be another low expense month.