Expense/Income Tracking

April was another good month on my progress towards financial independence. My SWR went down to 49.50% from 54.50% the month before. My goal is to get my SWR down to 4% at which point I’ll consider myself financially independent. The safe withdrawal rate isn’t decreasing quite as fast as it was.  Now that I will be making much less money the decreases will be even smaller but I’m hoping I can still decrease the SWR every month.

My goal is to save 50% of my income each month and I met that goal in April. I made $3815.80 and managed to save $2000. That amounted to a 52.41% savings rate.  I didn’t put quite as much money in savings in April as I could have because I wanted to leave myself a little bit of a cash cushion with the tax job ending and my part-time job not being quite enough to cover my bills.  My part-time job has turned into a full-time job so I will be able to decrease my cash a little and move that cash to savings.

The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. I have 24.24 months of living expenses saved now. It is nice to have two years of living expenses in savings.  Most of the money is in retirement accounts so it isn’t easily accessible, but it is still nice to know it is there.

The way I am determining my SWR is by tracking my trailing 12 months expenses divided by the amount of my investments. Since I don’t think the preceding 12 months accurately reflect my expenses going forward I am using my monthly expenses starting in November 2012 to set the average so every low month of expenses makes a big change in the average right now.

Here is a breakdown of my income for April.

My April income was great.  Since my tax job ended in April my future monthly income totals are going to be a lot smaller.  I am at least making a decent amount of income from my alternative and  passive income sources.  I didn’t receive any mystery shop income in April because I didn’t do any mystery shops in March and most of the mystery shopping companies pay the following month.  I will have a little mystery shopping income this month. I also received a surprise check from a class actions suit against Chase credit cards that I didn’t even know about.  I really don’t think my Chase credit card ever ripped me off but I’ll still cash the check.

My part-time job is converting to full-time this week.  That will help my income a little bit.  It is a low paying job so it really will be just a small help.  I’m going to need to increase my online income if I’m going to maintain my over 50% savings rate.

Here is a breakdown of my expenses for April.

My April expenses were higher than I’d prefer . I missed my goal of keeping my monthly expenses under $1000 for the first time this year. I did at least meet my main goal of keeping my expenses under the minimum wage level of $1274 a month.

I once again spent too much money on food.  The total was lower than in March but still too high.  Food is my biggest weakness right now.  I’m eating way too much fast food and junk food.  I’ve complained about my eating habits a lot but haven’t changed them.  Eating better needs to be a priority this month.

Household expenses were a little higher because my cell phone stopped working and I purchased a new one. There isn’t much room for things to go wrong in a $1000 budget.

My transportation expense was also a little higher than I’d like.  The expense was all for gas. I did have one trip to SW Missouri but I should have spent less on gas.  I need to cut back on the unnecessary driving.

All other expenses should be about the same this month.  If there are no unexpected expenses I should get back under the $1000 mark again.

March was a decent month on my progress towards financial independence. My SWR went down to 54.50% from 62.54% the month before. My goal is to get my SWR down to 4% at which point I’ll consider myself financially independent. I’m seeing big declines in my SWR right now because I’m saving over half of my income and I’m reducing my monthly expenses. The way I am determining my SWR is by tracking my trailing 12 months expenses divided by the amount of my investments. Since I don’t think the preceding 12 months accurately reflect my expenses going forward I am using my monthly expenses starting in November 2012 to set the average so every low month of expenses makes a big change in the average right now. The big drops in my SWR will slow down once my trailing 12 months average is closer to my current monthly average.

My goal is to save 50% of my income each month and I met that goal in March. I made $3935.19 and managed to save $2350. That amounted to a 59.71% savings rate. My savings should have been better in March. I actually ended up with more cash on hand than I intended. That surplus will be invested this month. My full-time job ends this month but I get two full paychecks. My goal is to save 75% of my income this month so I can get ahead on my 50% savings for the year goal. That way if I have a couple months with a less than 50% savings rate after the end of my job I’ll still be on track.

The 4% SWR translates into having 25x your annual expenses in savings or 300 months of expenses in savings. I have 22.01 months of living expenses saved now. I should have over two years of living expenses saved by the end of the month. It is nice seeing my SWR go down in big chunks each month and my months of living expenses saved go up each month. That is why I’m working the crazy hours right now, so I can reap the reward in the future.

Here is a breakdown of my income for March.

My income was great in March although it was down slightly from February.  I expect my income will be about the same this month.  My full time job is ending but I will still get two full paychecks. Next month is when I will have a challenge to keep the income level up.  I doubt I’ll be able to keep my income at this level but if I’m able to keep it high enough to save 50% of my income that will be good enough.

I plan to work on increasing my online income and do more mystery shopping once my job ends.  The mystery shopping will be guaranteed extra money although not a lot of money.  The online income has potential to be much more but I can never be sure if my efforts will actually result in increased income.  I will still have my part time job so if I can make a decent amount from my passive income and my alternative income I should still make enough to save 50% of my income.