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 crazy with my spending. It also encourages me to invest as much money as I can to boost my monthly saving rate. 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 and spending less than £950 per month for the rest of 2014.
- Evidence - I want to prove that anyone can become financially independent, including someone like me on an average salary (under £30,000 pa). You'll be able to see what I spend every little penny on, each month. You'll also see what I earn 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 (2022).
I will rarely have the same wage each 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.
The first two expenses are fixed amounts. 'Mortgage/House Bills' is an account where Miss FFBF and I pay into each month (£470 each) to cover mortgage payments, council tax, water, TV licence, telephone, electricity, and broadband. 'Food Account' is another joint account we use to contribute a fixed amount (£50 per month) for food shopping.
Here's a breakdown of my Income and Expenses for the previous month:
|Income from August 2014
|Interest from Savings
|Expenses from August 2014
|Bulk buy – Protein
|Camera Battery charger
|Hotel – refund
|Euros – Work trip
August's wage was below average for me. The same pattern seems to happen every year. July's wage is brilliant, August is lacking, September tends to be high and October's is one of the lowest months of the year. It looks like 2014 will be no different.
I mentioned in last month's Income and Expenses post that I used 1/3 of my savings to invest in SSE and National Grid, and purposely saved 2/3 to purchase a company in August. That money went towards the investment of Catlin Group. If I didn't reserve those savings last month I wouldn't have been able to purchase anything in August.
My Dividends were the forth highest I've received since doing DGI. I am pleased with this. By the end of the 2014, I'm hoping to have dividends that average out to £50 per month. I might class a £40.79 payment as 'below average' at that point, which seems strange seeing I was pleased with £5 six months ago. I wonder what I'll be achieving in six months time or at the end of 2015? How times change!!
I sold two items on Ebay. I would normally save that money to invest with the following month. My expenses were high for this month, so I used the profits to pay for some of my outgoings instead.
The interest from my savings account were predictable and low. I will continue to allow the interest in this account to compound without adding any additional capital to it. I'm not 100% sure what to do with this money yet, but for the time being, I'm happy for it to sit there.
As I mentioned above, this was an expensive month for me. I was dreading doing my expenses and Income. It turned out a bit lower than I had initially expected but it was still higher than I would like it to be. I just want it all don't I!
The first four lines start well. Mortgage/House bills, Food Account, Mobile, and Petrol are all in line, but it goes downhill after that!
August crossed over with my Dad and sisters Birthday, so this was a little higher than normal.
I took three small stints of annual leave from work during August, and I was intrigued to see how my spending turn out. My groceries were higher than normal, which was expected. I was away from home for good chunks of the month and I had to feed myself during these periods where I didn't have access to a kitchen. My alcohol spending remained the same with one bottle of wine for the month. My fast food spending went up, as I opted for a quick meal fix on a few occasions.
I purchased 9kg of Whey Protein with Discount Supplements via Topcashback and received £5.54 cashback. TCB will highlight any discount codes the company have out (if they have any). I was fortunate enough to time a 12% discount code which I used to bring the price down from £80 to £70.40 (That's not including the cashback I'll receive too). This stash will last me around 12 months as the last order I made was in July 2013. I cover the cost of this in my annual 'one-off spends' account.
I purchased a new battery charger for my camera, as mine had stopped working, and we were due to go on holiday to Devon in August. I picked one up on Ebay for £9.99.
Our Hoover caught the same virus as my camera charger and died on us during July. Miss FFBF and I split the cost of buying a new one. I paid more than I would have liked, but Miss FFBF felt strongly about getting a hoover from a local shop (which aren't the cheapest) because her family work in a hardware store in Sweden and she likes to help the community out. Blast her generosity!
Not to be outdone by the Hoover and camera charger, one of our toilets decided to constantly leak water. It was barely noticeable. It was one of those problems we were meaning to get fixed but didn't get around to it for whatever reason. Welsh Water sent out a letter saying they were going to charge us more money each month due to our consumption, which had since doubled! We knew it was down to the toilet so we quickly got a plumber in and he thankfully sorted it out for us.
Miss FFBF and I were booked into a hotel in North Devon during August. Unfortunately, Hurricane Bertha decided to visit our shores and the weather was awful. The roads had huge amounts of surface water and they closed the entrances to the local beaches. The thunder, lightening, wind and rain forced our hand and after talking to the hotel manager we decided to cancel the holiday. We were planning on visiting the local countryside and beaches. As most of the beaches were closed and the weather was so unpleasant we decided to cut our loses. The manager was fantastic and offered us a full refund. This wasn't a form of income, so I decided to put it down as a minus number on expenses. So what what we end up doing instead??
The weather was that bad we decided to stay in and watch films. I don't tend to buy DVD's and if I do, I do it on Ebay. As I didn't have time to wait for them to be delivered to our home, I decided to buy some from our local supermarket and HMV. I went back into spending spree state that I used to get quite regularly. I felt a bit down about not going on holiday, and I tried to 'spend' my way to happiness. It did work, but it was concerning as I haven't done that for a long time. I plan on selling the DVD's when I've watched them, so I can recoup some money back. It wasn't a smart move financially, but I did enjoy the films!
Our sales office went to Paris for a educational/teambuiding purposes, and we had a fantastic time. I took out £22.12 worth of Euros and decided not to spend a penny more. I kept within the budget easily, as most of the food and entertainment was covered by my employers. I didn't want to get into exchange rate, or recording Euros and pounds, so for simplicity I've kept the expense in pounds to cover everything in the trip. I had some left over Euros, but I'll keep them in cash to use next time rather than paying for an exchange.
I played snooker for the first time in years with one of my best mates this month. We used to love the game and we would play every now and again and use the time to catch up. We thought we would rekindle the 'good old days'. After two games we were both really bored. I think we just got fed up from being so bad at it. We decided to hit the Cinema instead and Watch Sin City 2. I LOVE the cinema, but I only go 1-3 times a year. It is expensive, but I get a lot from it. I haven't broken my habit of buying Popcorn and Coke when I go. It's almost a ritual for me. It's a blatant rip off, I know, but it doesn't feel 'right' eating smuggled in nuts and water. Not from an ethical point of view, but from a satisfaction point of view. This is 100% psychological, and just like any other habit. I could break it, but part of me doesn't want to, and uses it as a treat. Do you 'suffer' from any similar habits?
I finished off the month with buying more Powerlifting plates. I won't bore you with the details, as they're just plates. There were required for me to continue training in the manner I want to train so it was forced purchase. I am happy with them though.
I could summarise by saying it was a very social, liberating, and expensive month. I thoroughly enjoyed it, but I intend on tightening the purse strings leading up to Christmas.
I have a goal for 2014 to ensure my expenses stay below £950 per month averaged out over the year. Here are my Expenses to date:
My average spend at the end of July was £832.82. It's now increased by £4.53 to £837.35. I predicted last month that I might not see any improvements in this area, and deep down I thought it would go up. August was an expensive month, I had more categories in the spending column than I ever have before. I'm still comfortably below my £950 Goal for 2014 which I'm happy with. I still believe I can bring the average down to £799 by the end of the year.
I have a goal to save/invest at least 50% of my income every month for the remainder of 2014.
My below average wage and high expenses have contributed to me saving and investing 56.8% (£964.49) of my income this month. My average for the year has now decreased to 71.6%. It's clear to see that my Goal of 50% is way too low for me now, so this has been my lowest saving rate since I've been recording Income/Expenses, and it's still comfortably higher than it. I would like to get my average above the 75% mark by the close of 2014.
Thank you all again for supporting me and for taking the time to read about my month.
How was August for you? Were you treating yourself during the summer holidays? Or did you manage to run a tight ship?
Labels: Income & Expenses