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 October
|Interest from Savings
|Pearsons Sale – Profit
|Index Fund Sale – Profits
|Expenses from October
|Gift at work
October's wage was predictably low for me. It was actually my lowest wage of the year so far. My overall Income for the month ended up being very healthy, so lets look into each section in a bit more detail.
My Dividends were lower than average (as I expected them to be). It's a large improvement on 2013, where I didn't receive any!
I sold a pair of trainers and a DVD on Ebay for a nice profit. After charges and post and packaging I was left with just over £40.
The interest from my savings has continued to fall as I take more money from the pot to invest with in the stock market instead. I'm unlikely to take any more cash out now as I have enough to cover my expenses for 2-3 months, and I'd like to keep it there in case I need to call upon it.
I've had a fantastic month for profits by trading. By selling shares I held in Pearsons and three different tracker funds I made £469.38 after commission and charges.
My Peer to Peer lending account - Funding Circle passed it's threshold of £20, so I took more money out of the account to invest with.
To cap off the months income I had just over £60 in birthday money (5th November) from my 'mother-in-law to be'. She's so sweet, and she does it every year, bless her.
The combination of all of the above has meant that my lowest month's wage has been part of an above average income month overall. Perhaps there's something to be said for 'side-hustles' after all.
The first five lines on expenses were pretty standard from Mortgage/House Bills to Birthdays.
My groceries were around slightly above average (I think). At the end of the year, I'm going to spend some time adding up all of these sections and calculating what 'average' means to each one. Groceries seem to fluctuate month to month so it'll be interesting to see what the end of year average will be here.
Alcohol most certainly increased in October. My office has a large ratio of women (and there's nothing wrong with that!), over the last 8-10 months we had a few guys join and it's nice to spread the ratio out a little bit. We decided to celebrate the higher than normal male percentage and have a night out in our local town. We had a fantastic time, and we plan to repeat it on a monthly basis due to the fun that was had. I don't do enough of this sort of thing nowadays, and it was a great reminder of how important socialising is to my well-being. This is money well spent in my view.
My Coffee spend was fairly stable. Miss FFBF and I went out for one coffee lunch. We're likely to do this 1-2 times a month on average.
My 'eating out' and 'fast food' shot up this month. This was primarily down to buying a meal for another couple we went out. They've hosted us for a few meals over the course of this year, and they've not been able to make it over to our house - This is mainly due to them looking after their pets. When we went over their house we insisted on buying them a meal as we weren't comfortable in continually being fed by them.
I bought my powerlifting singlet for the competition in the month. This was a good quality 'entry level' suit. I plan on using it in the future, and I was pleasantly pleased with the performance of it.
I was really pleased with my clothing purchases this month. We have a shop in our town that I don't use a lot, but I'm a big fan of. It sells fashionable clothing from companies like Paul Smith, Ralph Lauren Polo and Armani but they're all second hand. It's similar to TK Maxx or a charity shop but it only sells 'high-end' brand names. I've been looking for a new/used pair of jeans on Ebay for a few weeks now, and I came across a lovely pair of Paul Smith Jeans that fit me perfectly for £15. Originally these jeans would have been north of £70 brand new. I also purchased a nice Jack Wills Rugby shirt for £10. I've only seen a couple of these shops before in the UK, I'm sure there's more. I'm a big advocate of buying quality clothes at a low price! I finished off my clothing purchases with some trainers from Ebay which set me back £45.
I don't own a kindle and I was running out of books to read, so I decided to buy a couple that have been on my wish list. The first was 'The New Buffettology' - which is an insight into the investing strategy Warren Buffett uses. Its focus us on value investing. My second book was 'How to be a productivity ninja' - The book uses techniques including Ruthlessness, Mindfulness, Zen-like Calm and Stealth & Camouflage you will get your inbox down to zero, make the most of your attention, beat procrastination and learn to work smarter, not harder. I've started reading Buffettology and I've been very impressed so far.
A childhood friend of mine is getting married in December, and Miss FFBF and I decided to stop overnight. The accommodation was fairly cheap and we can REALLY enjoy the evening then!
My expenses were wrapped up with a small public transport expense and a charitable donation.
I have a goal for 2014 which is to keep my expenses below £950 per month, averaged out over the year. Here are my total expenses to date:
My average spend at the end of September was £827.18. It's now dropped by £1.50 to £825.68. I'm still well below my goal of keeping expenses under £950 per month. I've previously mentioned that I would like to keep my expenses below £800 per month for 2014. I think this is just out of reach now. In order to achieve this, I would need to keep November and December's spending below £697 each month. It's not impossible, but I've only achieved that once this year, and doing it for the next two months is unlikely, especially with Christmas approaching. £800 might be more achievable for 2015.
I have a goal to save/invest at least 50% of my income every month for the remainder of 2014.
I saved and invested 65.3% (£1,348.02) of my income this month. My average for the year has now decreased to 70.2%. I would like to keep my saving rate around the 75% mark for 2014. This is also looking less likely now, as I would need to save 94% of my income for the next two months!
Thank you all again for supporting me and for taking the time to read about my month.
How was October for you? Are you still on track to meet your goals this year? What have you learned or improved on?
Labels: Income & Expenses