One of the main reasons I started a Blog was to publicly record all of my Income and Expenses each month.
There were two main reasons why I decided to do this:
- Accountability - Just knowing that I'm going to be writing down all the pounds and pennies that I spend each day is reason enough not to go too crazy with my spending. I've already thought twice about spending money because I would have to record it. It also encourages me to invest as much money as I can. The act of writing everything down will motivate me to spend less and save more. I have a Goal of saving more than 50% of my monthly wage every month for the rest of the year.
- Evidence - I want to prove that anyone can become financially independent, including someone like me on a fairly average salary (under £30,000 pa). You'll be able to see what I spend every little penny on, every month. You'll also see what I earn every month and what percentage of that I'm able to invest with. I want this Blog to represent a real-time document of how someone can go from earning less than £10 in one year (2013) in dividend income, to earning enough passive income to cover all monthly expenses and spending.
Income
I will rarely have the same wage every month as I have a commission based job. I might also be eligible for bonuses at certain times of the year, which will impact on the total of my wage. My wage figure will be the net sum I'm paid after tax, national insurance, company pension, salary sacrifice for pension, and student loan. I will only include one figure for my wage but I will mention if my commission is high/low and I will also let you know if I've triggered a performance based bonus.
Expenses
The first two expenses are fixed amounts. 'House Bills' is an account where my fiance and I pay into each month to cover mortgage payments, council tax, water, TV licence, telephone, electricity, broadband and oil. 'Food Account' is another joint account we use to pay a fixed amount into for food shopping.
Here's a breakdown of my Income and Expenses for the previous month:
Income from March 2014
| Wage |
£1,513.05 |
| Dividends |
£5.64 |
| Ebay |
£26.46 |
| TopCashBack |
£6.76 |
Sports betting
Interest from Savings |
£44.16
£14.03 |
|
|
| Total Income |
£1,610.10 |
Expenses from March 2014
| House Bills |
£520.00 |
| Food Account |
£100.00 |
| Mobile |
£8.30 |
| Car tax |
£77.00 |
| Birthdays |
£76.99 |
| Groceries |
£10.24 |
| Alcohol |
£5.99 |
| Greeting cards (3) |
£6.50 |
| Prescription |
£7.85 |
| Eating out |
£18.50 |
| Mothers Day |
£24.99 |
|
|
| Total Expenses |
£856.36 |
March Income was fairly average overall. My wage was just below average this month. It wasn't far off what I normally get, but I had a bit of help from other sources.
Dividend income was the lowest earner this month. I'm looking forward to the time when it's the second highest earner behind my wage on a consistent basis. It's worth pointing out that although it was the lowest earner this month, it was my highest ever monthly dividend payment. It eclipsed the previous best by 7p. :-)
Ebay contributed an average amount for me, as did Topcashback. This months 'one-off' was most certainly Sports betting. I haven't funded my account for 18 months, I've just been chipping away at the odd football or rugby bet here and there. I haven't taken any money out of the account for about 8 months now, so I won't be expecting another payment like this for another 6-12 months. Much appreciated though!
This is the first month I've tracked every penny of what I've spent, so I honestly can't tell you how it compares just yet. However, March Expenses included car tax, a big birthday present, and mothers day. So I would guess that it's bigger than a standard month for me.
My grocery shopping looks very low, and I'm not surprised, as I was completely aware of what I was spending money on. I decided not to spend money a couple of times due to me having to write it down. I've been pleased with how disciplined it's made me.
One area I see I can make an instant improvement on is gift cards. I bought an anniversary, birthday and Mothers Day card and it came to £6.50. That was more money than my monthly alcohol and almost 2/3 of my personal grocery shopping. I know it isn't a huge sum of money, but it did make me wonder how much I've spent in this area over the course of say..... 5 years. From now on, I make a pledge to make my own cards for the rest of the year. They will be more personal, I will spend more time on them than I did before, and I'll save money.
I'm taking some medication for the next month, and I don't intend to be on any next month, so my expenses should be without 'Prescriptions' for April.
I think the biggest saver this month has been the Fuel for the car. I normally spend around £50 per month, so to have no Petrol expense at all this month is fantastic. Living without a car is becoming more and more appealing.
I managed to save 60.6%* of my monthly income for March. One of my goals is to save 50% of my income for the entire year. I'm really pleased with this area! I wasn't sure how I would fair against 50%, and to have hit the 60% mark in my first month is a nice achievement, whilst hitting a milestone. It does ask the question, did I set the bar too low? It is only April now, so I do have a long time to keep that level going, so we'll see how I get on. I'm now keen on hitting the 70% saving milestone now.
*I have an amendment to make here. I have just been doing my April budget and found that I have not accounted £185 that I save every month for annual/'one off' spends. I put this money into a savings account and withdraw what's needed when a bill comes up. The expenses have been accounted for in March from this account (Car Tax), but I haven't included the money I save to fund these expenses. If I don't add this money, there will be £185 per month unaccounted for. I will add the £185 to March and every other month from now on. My saving rate has now increased to 72.5%. I am absolutely delighted with this finding!
March has been a really solid month for me overall. I've set myself some nice markers to start the year and compare future months to. I'm most pleased with my savings rate. I'm also excited by the potential to save more money in future months with a higher wage, coupled with lower expenses (months without car tax, birthdays and mothers day).
Thank you for reading!
How was March for you? Did you reach any milestones? Could you have saved more money?
Labels: Income & Expenses
