I started tracking my Income & Expenses in March 2014. By committing to tracking these numbers and sharing them with you all on a monthly basis, I benefited from questioning every single penny I spent. For the rest of 2014, I managed to keep my expenses under £10,000 a year or £833 per month.
I will continue to record my income and expenses for 2015, but I don't intend on setting a goal for a specific saving % or an amount for keeping expenses below. I noticed that in 2014 my goals were effective in keeping my costs down, but they also influenced me not to spend money on certain things. That might sound good, but it impacted everything, including charitable donations and personal development, which are usually really important to me.
My priority for 2015 is making money. I want to challenge myself to earn a lot more. I'm hoping that by having more disposable income, I'll have more money to invest with. This should then speed up the process to becoming FI. Easy right! I want to call Tom Cruise at the end of the year and shout "Show me the money!"
Here's a quick breakdown as to what goes into numbers below:
Income
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 or low and I will also let you know if I've triggered a performance based bonus.
Expenses
The first two expenses are fixed amounts. 'Mortgage/House Bills' is an account where Miss FFBF and I pay into each month (£440 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 (£70 per month) for food shopping.
Here's a breakdown of my Income and Expenses for the previous month:
| Income from March 2015 | |
| Wage | £1,564.02 |
| Dividends | £172.36 |
| Interest from Savings | £2.10 |
| Kindle Sales | £9.50 |
| |
| Total Income | £1,747.98 |
| |
| |
| Expenses from March 2015 | |
| Mortgage/House Bills | £440.00 |
| Food Account | £70.00 |
| Mobile | £8.22 |
| Petrol | £20.00 |
| Birthdays | £3.50 |
| Groceries | £3.79 |
| Alcohol | £28.68 |
| Mothers Day Gifts | £30.49 |
| Eating Out | £102.89 |
| Fast Food | £3.50 |
| Coffee Shop | £6.70 |
| Kindle Course | £125.53 |
| Dentist | £18.50 |
| Book | £13.32 |
| Car Parking | £1.00 |
| Microsoft Office | £9.95 |
| Charitable donations | £20.00 |
| Laptop | £274.99 |
| |
| Total Expenses | £1,181.06 |
Income
March's wage was below average for me. Thankfully my dividends were on hand to bump up my Income total to some degree.
My dividend income was a Personal Best of £172.36 for March. My average dividends were a shade under £50 per month in 2014. My monthly average has now climbed over £100 (£104.02) thanks to March. My Goal for 2015 is to reach £2,000 in Dividend Income. I'll need to increase my monthly average up to £167 to reach this total. My average is heading in the right direction. April's dividends are more in line with my 2014 average, but I'll be setting a new PB in May and June will also be huge for me. I remain optimistic!
I have a new category for income. One that I'm hoping will be a main feature in the months and years to come - Kindle Sales. Amazon make payments into your account 60 days after the month has finished. For example, in March I was paid the royalties I received in January. I opened my account mid way through January, so this is only a couple of weeks worth of sales, and I had two books out at that time.
There's one part of Kindle income that I haven't factored in when it comes to receiving money from Amazon, and that's the payments you receive for Kindle Unlimited. Some people pay for a subscription service for Amazon products, and if they download your book with that membership, you receive a royalty for it. All the monetary amounts I've provided on this Blog for Kindle have not included this extra payment. I've decided to include my Kindle payments in my monthly Income and Expenses reports to keep track of them all. In the table below, I've confirmed the amount Amazon paid me in black. The numbers in grey italics are estimates without the Kindle Unlimited factored in. I'll update these numbers once I have the money in my account and it's confirmed.
I'm hoping that Kindle and Dividends payments are going to provide more than enough money to cover my expenses in time to come. I have a goal to increase the Kindle Income to £1,000 per month by December. I'm not sure if I'll achieve this goal. The current sales still have a long way to go, but the % increases from month to month are substantial. I know it can't continue to double my income each month, but I'll enjoy it whilst it lasts. I estimate that I'll earn approx £160 in sales in April, which is close to doubling the income from March.
| Dividend & Kindle Income - 2015 |
| | | |
| | Dividends | Kindle |
| January | £83.47 | £9.50 |
| February | £56.22 | £43.14 |
| March | £172.36 | £84.75 |
| April | - | - |
| May | - | - |
| June | - | - |
| July | - | - |
| August | - | - |
| September | - | - |
| October | - | - |
| November | - | - |
| December | - | - |
| 2015 Total | £312.05 | £137.39 |
| 2015 Average | £104.02 | £45.80 |
To summarise, March was another low paying month for me. When I look back at what I earned each month in 2014, and if I discount what I received for selling my car (as a large one off), it was £2,033 per month. March was £250+ below my 2014 average income. My goal to achieve £50,000 income this year is looking increasingly more difficult, but there's a lot of work to on Kindle and some big potential returns to be made. It's great to see the first payment in my account. This should be the first of many, and like my dividends, these payments should add up quite nicely over time.
Now that I've proven to myself that it's possible to live on less than £10,000 a year, I feel like I can challenge myself in other areas. This doesn't mean that I'm going to go on a mass spending spree, but I'm not going to decline Personal Development opportunities to keep my expenses below a set figure this year.
March was my first month of 'freedom' spending and I made the most of it!
Stand out purchases this month include a Kindle course for £125. This course is based around helping you form a team and helping me outsource work.
I bought a laptop, which was a refurb model from PC World (I got a little bit of cashback from it too). Lou and I have been sharing a laptop up until now. In honesty, I've just been using it the entire time, and poor Lou hasn't had a chance to use it herself. I made the call to buy my own so we can both work on our respective computers at the same time. I bought 2013 Microsoft Office through my company for £9.95, which I was really chuffed with. I need Word for Kindle Publishing. We have Open Office on the other computer, which isn't compatible with Kindle Publishing. Up to this point, I had to email my work address, edit the book during my lunch hour and then upload it to my KDP account. It wasn't the end of the world, but it was a pain when I had edited a couple of books on the weekend, and had to wait for work to put them online. Having Word is a dream now!
Eating out and alcohol were huge for me this month. It was the Spring UK Gathering, and for a bunch of Frugal Goer's, we didn't hold back that day! I had a few coffee's, paid for two meals (lunch and dinner), and bought a round of drinks. That might be normal for most people, but I tend to eat out every couple of months and keep alcohol consumption down to a minimum. I had an amazing day, and I wouldn't have changed anything about my spending that day. These meet up's are one offs, and I treat my spending differently. My frugal behaviour throughout the year allows me to relax the purse strings for these days.
I had my twice yearly check up at the dentist, Mothers Day, and I bought I book which are all out of the norm for a monthly spend. The combination of these purchases has resulted in my biggest ever spending month since I've been recording expenses - £1,181.06.
How do I feel about that?
To be honest, I'm not too worried. I'm not delighted with it, but most of the 'big ticket' items (laptop and course), should pay 'dividends' in time to come (My comical genius didn't even notice the pun - It's all natural people!). I wanted to loosen up my spending a little to allow me to develop and earn even more money moving forward. Buying cakes and coffee won't do that, but books and courses will.
There's a fine balance between the living frugally and developing yourself, but I believe I can continue to spend wisely and keep expenses relatively low, whilst significantly increasing my income.
Do you find the balance between living frugally and developing yourself difficult?
Last year, I fought the urge to develop myself because I wanted to keep my expenses low. I want to change that in 2015.
My aim is to generate more disposable income by the end of the year. I haven't shown any signs of that just yet, but I'm expecting bigger increases towards the end of the year. Let's see how I get on!
Income/Expense Average
I don't have an expense goal for 2015, but I receive a lot of questions about my expenses, perhaps more than most other things I write about. I thought I would keep tracking them as people are interested, as am I. Whilst I was tracking the average for that, I thought it would be worth doing the same thing for Income, as it's an important goal for me this year.
| 2015 | Expenses | Income |
| January | £728.45 | £2,030.19 |
| February | £725.03 | £1,793.69 |
| March | £1,181.06 | £1,747.98 |
| April | | |
| May | | |
| June | | |
| July | | |
| August | | |
| September | | |
| October | | |
| November | | |
| December | | |
| 2015 Total | £2,634.54 | £5,571.86 |
| 2015 Average | £878.18 | £1,857.29 |
My average spend at the end of February was £726.74. After a Monstrous March, the average has jumped up to £878.18.
My income average was £1,911.90 at the end of last month. It's now down to £1,857.29.
April has been much better on both ends for me, so I'm likely to see a nice rise in income and a noticeable decrease in expenses.
Saving Rate Average
| Saving Rate 2015 - % |
| January | 67.3 |
| February | 62.8 |
| March | 65.5 |
| April | |
| May | |
| June | |
| July | |
| August | |
| September | |
| October | |
| November | |
| December | |
| 2014 Average | 65.2% |
I managed to save/invest £1,145.25 in March which was 65.5% of my income. My saving percentage for 2015 is currently 65.2%. I think this figure represents a solid average for me at the moment. In the next few months, my dividend and Kindle income should increase this figure above the 70% mark on a more regular basis.
Overall, a low income and big spending month, but a ground breaking one too. We'd had our first big UK Gathering, I had my first Kindle royalty, and I have my own laptop.
Thank you all once again for your continued support. It means a lot!
How was March for you? Do you struggle to balance living frugally and keeping expenses down? I love to get your thoughts!
Labels: Income & Expenses