Reviewing My Income and Expenses

Jacob at Early Retirement Extreme is having a 30 Day Early Retirement Extreme Makeover.   One of the goals of this makeover is cut your expense level to $10,000 or less a year.  I thought I was close to this goal already since I try to keep my monthly expenses at $1000 a month or less and I knew I was below that level a few months this year.  After reviewing my expenses for the year I realize I’m farther away from the $10,000 goal than I thought.  Although I did have some months below the $1000 level I had more months above the $1000 level.  I’m estimating that my total expenses will be about $15,000 for this year and  my total income at about $12,000.  This is not as good as I thought but that is part of the reason why I track my income and expenses; so I can review them and tell how I’m doing.

Looking at my expenses my budget busters are transportation and entertainment.  The transportation category is somewhat misleading because I drove my car delivering pizza most of the year.  Some of that expense should really be a deduction from income.  Still there is plenty of room for improvement in the transportation category and I will be making some major changes there.  Some of the increase in my entertainment expenditure is from having a GF but most of it was just the result of stupid decisions on my part.  This expenditure can easily be reduced just by choosing more free or low-cost options for entertainment.

Since the new year is almost here I’ll go ahead and set a couple goals now.  The first is to have my expenses under $10,000 next year.  The next is to have my income higher than my expenses.  These are reasonable goals and I will be planning specific measures to achieve them.

November Investment Income- $39.17

November was another bad month for my retirement savings.  My monthly investment income went down from $41.34 last month to $39.17 this month.  I actually made more money in interest and dividends last month than what I’m projecting as my income.  This is because I received a quarterly dividend payment and I earned interest on accounts that I don’t consider part of my retirement savings.

Disclaimer:This is not my actual investment income. To get this figure I first add up my retirement accounts, emergency fund, and any other money I consider permanent savings. What the total of my savings would earn at 6% interest for a month is my monthly investment income.

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November Expenses- $1027.14

Here is a breakdown of my expenses for November.

Household $530.00
Transportation $127.09
Food $33.31
Entertainment $212.47
Debt/Education $90
Phone $34.27
Total $1027.14

I just missed my target of $1000 for monthly expenses.  My household expenses were high because they include Christmas shopping.  I have very little shopping left to do this month so my household expenses will decrease.  Entertainment was way too high for the month.  Now that I have the gambling bug out of my system this expense will be significantly reduced.  I did manage to get my food expense lower and plan to maintain this expense at the same level this month.  My food expense only includes lunches out or snacks that I buy.  I plan to get rid of my car this month so my transportation expense will decrease.  The total for November is artificially high because it includes payment of my auto insurance.  I will get back most of that when I cancel my insurance after I get rid of my car.  I expect to get my expenses well under $1000 this month, I just have to make sure Christmas or other unexpected expenses don’t get out of hand.

November Income- $630.09

Here is a breakdown of my income for November.

Online Income $369.03
Cash Back $22.40
Interest $12.77
Dividends $35.89
Medical Study $175.00
Surveys/Mystery shopping $15.00
Total $630.09

My income was down quite a bit from the previous month but that was mostly expected.  I did do some things to try to increase my income but any results will not be seen until this month. I count my income when I receive it, not when I make it.

I do have a new category this month for stock dividends.  I will be receiving dividends every month but the total will be lower this month since I won’t be receiving any quarterly or semi-annual dividends. Overall, my income will probably stay the same this month but I will try to increase it.

October Investment Income- $41.34

Last month was not a good month for my retirement savings. I lost about $1000 in my Roth IRA which was a significant amount considering I only had $5500 in there.  I managed to increase my monthly income but only because I added $3000 to my savings last month.  Increasing my monthly investment income from $32.01 to $41.34 was good though.  Unfortunately I won’t be able to add a large amount to my retirement savings until sometime next year.  I’m rethinking my investment strategy for retirement and I’ll share that strategy in a post later today.

Disclaimer:This is not my actual investment income. To get this figure I first add up my retirement accounts, emergency fund, and any other money I consider permanent savings.  What the total of my savings would earn at 6% interest for a month is my monthly investment income.

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