Expense/Income Tracking

Here is a breakdown of my expenses for December.

My December expenses were quite a bit higher than my November expenses. Ideally, I would keep my monthly expenses below $1000. I came close to that level in November with expenses coming in at $1113.82. My December expenses came in at $1580.99. The high amount was mostly from my transportation expenses. I paid sales tax and licensing on my new car and six months insurance for both my van and car in December. Some of the insurance money will eventually be refunded once I’m able to sell the van. My gas expense for the month was $208.96 compared to $571.96 in November. That is a significant improvement, but I would like to do better. I had three trips from KC to SW Missouri in December and shouldn’t have any this month. That alone should result in a significant drop in my gasoline expense.

My food expense was also higher than I would prefer. One reason it was high was from eating fast food too often. The other reason was that I bought a lot of groceries when I moved into my apartment. I’ve barely made a dent in my groceries so I should have a much lower food bill this month.

The household bill will be a little larger since I will be paying a full month’s rent. I will also have to pay my first electric bill. I expect it will be about $25-$30 since I haven’t been using much electricity.

In order to meet my goal of living on minimum wage, I will need to keep my expenses below $1274 a month. I shouldn’t have any large expenses this month so I should easily keep my expenses below that level and perhaps I might get them below $1000 for the month.

If you have been reading the blog for a while you may remember that I used to track my monthly investment income. The idea was that once I got my monthly investment income to $1000 a month I would have enough money to be financially independent. This was hypothetical investment income and I decided the numbers didn’t accurately reflect how close I was to being financially independent so I discontinued tracking my monthly investment income. If I had continued tracking I would have seen my income go way down due to various factors that resulted in me withdrawing money from my investments.

I’m now at a point where I am able to contribute to my investments. For now, my investments consist of the dividend stocks in my broker account and my Roth IRA which is currently invested in a TIPS fund. I have decided on a new way to track my progress towards financial independence. I will be tracking my safe withdrawal rate. The way I will be doing this is by tracking my trailing 12 months expenses divided by the amount of my investments.* For this first calculation I am going to take last months expenses time 12 to determine my trailing 12 months expenses. This is because I don’t think my expenses in the previous months accurately reflect my current spending since my living situation has changed dramatically this year. Eventually, the 12 months trailing expenses will be based on my actual expenses.

The generally accepted rule is that you need to get your safe withdrawal rate down to 4% in order to be able to safely retire. I am setting that as my goal. In order to reduce my safe withdrawal rate I can increase the amount I put in my investments and/or reduce my living expenses. The return on my investments will also be a factor, but if I am contributing 50% or more of my income each month it should not be that much of a factor.

My November 2012 safe withdrawal rate is 86.22%. That is obviously not a safe withdrawal rate at all. On the plus side, starting with such a big number should allow me to see measurable progress quickly.

*I’m not 100% sure this is the correct way to determine my safe withdrawal rate. If the calculation should be different, please let me know.

Here is a breakdown of my income for November.

My income was up slightly in November. My job income went up quite a bit due to it being a three paycheck month at my attorney job and my online income went down quite a bit resulting in a very small increase in overall income.

The amount of money I’m making from my jobs doesn’t seem like enough compared to how much I’m working.  When the online income was going good, I was making a lot more money from a lot less work.  I guess that couldn’t last forever.  Since I’m mostly sleeping at the part-time job, I can’t really complain about how little it pays.  I have taken some action that will increase my overall income and am looking for ways to increase it even more.

My sources of passive and alternative income didn’t add up to much, but every little bit helps. I got a nice bonus of $150 for signing up for a new cash back credit card. I got $34.04 from Mr. Rebates which was almost all from my referrals’ purchases. It is nice to have the residual income coming in without any more effort needed on my part.

I will likely have a significant decrease in income this month.  This is because I quit my attorney job so I could move to Kansas City.  I’ve already got a new job with higher pay at a local CPA firm.  It doesn’t start until January though, and it is only for the tax season.  For now, I am picking up extra shifts at my part-time job and might have a possible 1-2 week temporary job starting next week. Once I start working at the new job my income should be even higher than it has been the last couple of months.

Here is a breakdown of my expenses for November.

My expense total for November was very good.  It looks like I will soon be able to get my expenses under $1000 a month. I did not include my vehicle purchase in the expenses.  The money I receive from selling my van should cover my car purchase and associated expenses, any money leftover will be income for December.  If the van sale doesn’t cover the car purchase and associated expenses than I will count the deficit as an expense for December.  Assuming I am able to sell the van this month.

My big expense was once again transportation. I spent well over $500 on gas in November. I’m moving to Kansas City so this expense will go way down this month.  It will be offset by having rent, but my rent will still be less than what I’ve been spending on gas.  My car insurance is due at the end of the month so the transportation category will still be my biggest expense in December.  The category should be way down in January though.

It will be difficult to meet my expense goal of $1000 this month due to moving expenses and my semi-annual car insurance bill.  I should still come close and I think I will be well set up to get my expenses under $1000 in January.

Here is a breakdown of my income for October.

My income was up sharply in October. Since I started a new part-time job as an attorney and continued my other part-time job an increase was to be expected.  My online income was up sharply as well and was more than my two jobs combined.  That isn’t really a fair comparison though because the job totals are after tax and the online biz total is before tax.  It is very hard to predict what my online business income will be.  I made most of October’s money in about a five day span and not much happened the rest of the month.  It is nice to see that even with all the time I’m spending working at my jobs the online income is still going strong.

I only received one paycheck from my law job and it didn’t even include my normal number of days.  Due to the way my paydays fall I will have three paychecks from my law job in November.  My job income should be up quite a bit this month.

My other sources of passive and alternative income aren’t too significant, but they are nice to have.  I got $28.79 from Mr. Rebates which was almost all from my referrals’ purchases. It is nice to have the residual income coming in without any more effort needed on my part.

I hope that I will make at least as much this month as in October.