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 Lou and I pay into each month (£490 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 June 2015 | |
| Wage | £2,045.34 |
| Dividends | £224.94 |
| Interest from Savings | £2.04 |
| Kindle | £243.01 |
| Topcashback | £15.78 |
| |
| Total Income | £2,531.11 |
| |
| |
| Expenses from June 2015 | |
| Mortgage/House Bills | £490.00 |
| Food Account | £70.00 |
| Mobile | £8.29 |
| Petrol | £0.00 |
| Birthdays | £2.00 |
| Groceries | £26.87 |
| Alcohol | £13.99 |
| Eating Out | £0.00 |
| Fast Food | £20.79 |
| Coffee Shop | £4.00 |
| Charitable donations | £20.00 |
| Car Insurance | £76.32 |
| Fathers Day | £2.00 |
| |
| Total Expenses | £734.26 |
Income
June's wage was above average for me. My average wage between Jan-Jun was £1,848 per month. It was my second highest of the year. My income was supported further by my Dividends and Kindle Income.
I hit an all time high on dividend payments in May with £339.89, and my annual average has received a much needed boost from receiving £224.94 in June. My monthly average now sits at £163.11.
Kindle sales were fantastic in June. I hit an all time high of approx £741 (My ACX payments were lower than anticipated). This 'unconfirmed' total now put's my entire Kindle income to £1,527.94 for the year. An average of £254.66 per month for the 6 month payments.
I received £243.01 in my account for the sales I made in April, which is still great. This is my forth month of payments from Kindle, and I'm close to my average payment from Dividends now. This is likely to be the last month that my Kindle income is below Dividends for a long time.
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, which I'm now very confident of reaching. My new 'unofficial goal' is to bring in enough income from Kindle to cover my income from my current employer. I'm not sure if I'll achieve this goal but I'll give it a bloody good go!
| Dividend & Kindle Income - 2015 |
| | | | | |
| Kindle | CreateSpace | ACX | Dividends | Total |
| January | - | - | - | £83.47 | £83.47 |
| February | - | - | - | £56.22 | £56.22 |
| March | £9.50 | - | - | £172.36 | £181.86 |
| April | £51.47 | - | - | £101.80 | £153.27 |
| May | £101.03 | - | - | £339.89 | £440.92 |
| June | £243.01 | - | - | £224.94 | £467.95 |
| July | - | - | - | - | - |
| August | - | - | - | - | - |
| September | - | - | - | - | - |
| October | - | - | - | - | - |
| November | - | - | - | - | - |
| December | - | - | - | - | - |
| 2015 Total | £405.01 | £0.00 | £0.00 | £978.68 | £1,383.69 |
| 2015 Average | £101.25 | £0.00 | £0.00 | £163.11 | £230.62 |
May produced the most income I've received outside of my salary - £448.77. June has now taken that crown, and moved my best non-wage income to £485.77. This total is over half of my monthly expenses. I can't tell you how pleased I am with this result!
I recently handed in my notice at work to pursue Kindle Publishing full time. I'll be working part time in August with my current employer (3 days a week) and then down to 2 days a week in September. I might continue working for them into October if required. I'm not sure how long I'll be employed there, but I want to make sure I'm making more than enough outside of my wage to cover my expenses and investments. I mentioned this earlier, but it's important for me to bring in the same amount of money as I currently do full time, but solely with Kindle. This will prove to myself more than anything that I made the right move, and after that period the sky's the limit.
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.
June was a fairly low month for me overall. I might need to continue these low spending months over the next few months whilst I transition to working for myself.
My only major one off was Car Insurance for Lou's car. We agreed that as we have a joint ownership of the car, we would both split the major car bills.
The other notable entry which was unintentionally low was fathers day. I planned to get my dad a voucher for his favourite cycle shop. I drove to the shop on Fathers day to buy the vouchers en-route to seeing dad, only to find out that the shop is closed on a Sunday. I did explain to my dad, and he was fine...... so he says...... but I couldn't help but feel like I was using one of those 'my dog ate my homework' type of excuses. I told him what the gift was to establish credibility, whilst jointly ruining the surprise for him - Well it is Fathers Day! I said I would buy it him next time I drive through. You'll find another Fathers Day category in July's expenses for this.
Other than that, there wasn't a lot else to report on expenses.
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 | £785.60 | £2,556.02 |
| May | £1,178.26 | £2,122.69 |
| June | £734.26 | £2,531.11 |
| July | | |
| August | | |
| September | | |
| October | | |
| November | | |
| December | | |
| 2015 Total | £5,332.66 | £12,781.68 |
| 2015 Average | £888.78 | £2,130.28 |
My average spend at the end of May was £919.68. After a more modest June, my average expenses came down to £888.78.
My income average was at £2,050.11 at the end of last month. It's now up to £2,130.28.
Saving Rate Average
| Saving Rate 2015 - % |
| January | 67.3 |
| February | 62.8 |
| March | 65.5 |
| April | 74.6 |
| May | 68.5 |
| June | 72.1 |
| July | |
| August | |
| September | |
| October | |
| November | |
| December | |
| 2014 Average | 68.5% |
I managed to save/invest £1,826.02 in June which was 72.1% of my income. My saving percentage for 2015 is currently 68.5%. 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 up until the point I leave my job and where I'll have to build it up again.
Thank you all once again for your continued support. It means a lot!
Labels: Financial Independence, Frugal Living, Income & Expenses