Like almost every other blogger out there that’s serious about financial freedom or investing, I’ve been keeping track of my income and expenses. I have been doing so meticulously as far back as 2005 in a quick-and-dirty Excel spreadsheet, but out in the open and on this blog since July of last year. There are a couple of reasons for doing so.
First, I want to show you guys that it is possible to become financially independent on an average worker’s salary. Because it’s hard to rapidly build my income, I have decided to focus on keeping my expenses as low as possible. Chances are low that I’ll ever become a member of the elusive 1% income group, but you can bet on it that I aim to join the ranks of the best savers out there. These posts show you how I do just that.
Second, the fact that you guys visit, read and comment on these type of articles motivates me to no end. Motivation is a crucial factor in ever becoming financially indepent, so I’m glad to be able to share my actions, my headwinds and my setbacks with like-minded people. Non-essential and frivolous spending are out of the picture when you’ve got almost 5,000 unique visitors checking in on you each month.
So that’s why you’ll find the nitty and gritty of my April income and expenses below. Maintaining a firm grip on my wallet is the only way I’ll ever make time my own again.
|Paycheck||€ 2,068||As expected|
|Dividends||€ 52||In line with this year's goal|
When tallying up all income sources in April, we can see a decent amount of income yet again. As is normal for most people, my regular job’s paycheck makes up the bulk of my income, accounting for a little over 85%. That means 15% of April’s income comes from passive income sources or side activities already.
Even though the extra income isn’t much in the grand scheme of things, that money will be put through the compounding machine, thus building new income all on its own without requiring any active input from yours truly. As such, the passive portion of my monthly income knows only one way, and that’s up!
|Rent||€ 350||As expected|
|Utilities||€ 70||As expected|
|Telecom||€ 20||As expected|
|Home maintenance||€ 10||Wrenches|
|Groceries||€ 75||Quite low|
|Restaurant||€ 18||Fries and sushi|
|Public transport||€ 12||Train tickets|
|Doctor's visit||€ 28||Dental checkup, will mostly be reimbursed later|
|Holidays||€ 76||City trip to Dublin|
|Subscriptions||€ 8||Google Play Music|
|Entertainment||€ 26||Drinks with friends and paintball|
|Gifts||€ 3||Large bottle of Chimay Bleu|
Even though I went on a quick holiday to Dublin to visit my best friend two weeks ago, April’s expenses are the lowest so far this year. Actually, it’s one of the best months since living on my own. Even though I haven’t tried especially hard this month, I believe the low spending can be explained by the nice weather outside: walking, running and cycling don’t cost much.
As a result, I managed to save 70.7% in April. That’s dead on target to save 70% on average annually, which is my main goal in 2015.
In absolute numbers I stashed away €1,715. Those savings have already been used to purchase additional dividend growth stocks. After researching and writing a short analysis on Anheuser-Busch InBev (EBR:ABI or NYSE:BUD), it didn’t take me long to deploy my available funds and add the American-Belgian-Brazilian brewer to my portfolio, thus increasing my forward dividend income with at least €22 every year.
The graph above quickly becomes useful now that we can compare year-over-year progress. Of course, savings rates are quite volatile from one month to another, but in general the orange bars should be higher than the blue ones since I’m aiming to save more over time.
So far I’ve managed to save 74.1% on average this year, mainly because of the extra and unexpected income from an insurance premium in March. Sometimes you need a little luck on your side to compliment your own efforts, as you can see.
If you take a close look at the graph, you’ll notice that May’s savings rate took the second spot in 2014. I’m excited for next month because I’m hoping to repeat last year’s success with the additional holiday bonus I receive every year. Stay tuned!
How was your April? Did your savings rate meet your expectations?