Income & Expenses – July 2014

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:

  1. 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.
  2. 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).

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/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 (£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 July 2014
Wage £2,734.00
Dividends £56.62
Ebay £1.21
Interest from Savings £13.78


Total Income £2,805.61




Expenses from July 2014
Mortgage/House Bills £470.00
Food Account £50.00
Mobile £8.22
Petrol £25.00
Birthdays £2.00
Groceries £38.93
Hotel Booking – Holiday £70.00
Creative Writing Lesson £10.00
Eating Out £9.95
Fast Food £4.50
Olympic Weightlifting Plates £65.95
Lifting Chalk £13.60
Powerlifting Belt £45.00
Charity Donations £20.00


Total Expenses £833.15

Income

July’s wage was a record high. This is the highest monthly wage I’ve earned in my employment history. I hit my annual target and received a bonus for doing so. The commission on top of this was also solid. There are many great aspects to working in a sales environment, and hitting a performance based bonus is one of the best. 


Once the money was in my account, I calculated the amount I could invest with. I added the sum to the savings and dividends from the previous month. The combined total would allow me to buy shares in two companies, with some money left over. I knew that the August wage wouldn’t be as fruitful, so I opted to use 1/3 of my previous months savings. The remaining 2/3 would permit me to invest in one company in August. If I invested all of the money into the two companies, I wouldn’t have enough money to buy shares in August. I’m more comfortable owning three companies that just meet my spending limit than two that are significantly over it. I’m still relatively new to Dividend Growth Investing (DGI) and I want to continue spreading the risk.  

My dividends were the second highest amount I’ve received since starting DGI. My payment from Tesco came early in the month and I was able to reinvest that amount into my two purchases – National Grid and SSE

Ebay was very quiet. I only made one sale. I added the earnings to my Investment Saver account to use for August. 

I wrote a post on my Monthly Budget Planner a couple of months ago. I explain how I have numerous current and savings accounts. Two of the savings accounts have received their annual interest in July. It was just over £5 between the two. The amount is low, but the work involved in receiving it is next to nothing. Once I received the interest payments, I closed both accounts and re-opened two more with better interest rates (banks tend to lower their interest rates to a large extent after 12 months). I will continue to use the new accounts in the same manner, with the added benefit of getting more money for doing so. The interest from these accounts were added to my Investment Saver, along with the ebay profit, to use in August. These small amounts won’t make an immediate impact to your wealth. They can produce a significant mass over time, and are worth persevering with. 
“Look after the pennies, and the pounds will look after themselves.”


Expenses 
I spent more than I set out to for July. My first variable expense was petrol, which was up to £25 this month. I took a few trips in the car which were down to me. I contributed for the petrol on those trips.  

Groceries were similar to last month. I’m trying to eat more food to gain some mass for my strength training. I’ve spent some more time with my two friends Ben & Jerry. God I love those guys. I’m aware that there is room for improvement here, and for the time being I’m content. 

We booked our Hotel accommodation for 2 nights in Devon later this month. I did a comprehensive sweep of the internet to find a good value option. We paid £140 for two nights, and we split the bill. £35 a night is reasonable for me. The hotel is in a beautiful location, and has a 5 star rating for feedback with over 100 people commenting. I booked the hotel with Laterooms.com, via Topcashback and received £13.23 cashback. Miss FFBF and I split the cashback that’s generated for us both contributing. 


I paid for some tuition in ‘Creative Writing’ with a local author and writer. I’ve referred to my joy of writing in previous posts. It’s an area I would like to continue improving on. As a ‘numbers guy’, I don’t tend to flex my creative muscles too often, and I would like to change that. I used this one off session to see how much I would learn and if I enjoyed it. I learned a great deal, quickly, and unsurprisingly I enjoyed the process. She has a 10 week course at the local high school which starts up again in September, and I’ll give it a go based on my recent experience. Her name is Maggie Clutterbuck and if you’re interested in learning more about creative writing, poetry, or Blogging you can find out more on her website here. Thank you again for your help Maggie!

Miss FFBF and I went out for one meal during July. We made up for the lack of frequency with the amount of food we ate that day. It was a Chinese Buffet – £9.95 all you can eat. I experience a transformation not too dissimilar to the Incredible Hulk when I’m at a buffet. I want to ‘smash’ the food into my body. All of it. Even stuff I don’t like, just because I can and it’s there. The more food I eat, the better value I get, and less food I have to eat at home. I had four plates of food, and I was ready for desert. I felt sick and was physically bloated, even so that wasn’t going to change anything. I sampled one of every desert on offer. I left that building pleased with the knowledge that I had got my monies worth. 

Do any of you experience this buffet brain switch? Do you eat with your eyes rather than your brain or stomach? 

From over-consumption to working out. I bought a Weightlifting belt, 25kg plates, and chalk this month. I’ve made the decision to enter my first Powerlifting competition in October 2014. The progress I’m experiencing has led me to invest more money into my home gym (I’m currently writing a post on this subject). I tested my strength in the Squat, Bench, and Deadlift a couple of weeks ago and discovered that I was running out of weighted plates to use. I took advantage of some money I had in my ‘spending account’ and invested in some. Whilst on topic, I purchased a Schiek Sports Power Lever Belt which can be used in competition, and some chalk to protect my hands.
I spent £45 (including delivery to my door) on the ‘used’ belt from Ebay. It’s in fantastic condition, and fits me very well. This belt is on sale at Amazon for £134. The lowest price I could find for it online was £60, so I went for it. I bought the two 25kg rubber plates for £65.95 using the ‘Ebay sniper’ technique I’ve discussed in a previous post here. The cheapest alternative I could find prior to this was £99. I’ve been using all of my new equipment for the past two weeks, and I’m happy with the value I got on all of these items. The belt and plates should last the test of time.


I made two £10 donations to Charities for July. One for my sister/dad who completed a 60 mile bike ride, and the other was for two colleagues who are attempted the London to Paris bike ride later this month. Two very worthy causes and admirable events. 
Expense Goal

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:


Month Expenses
March £856.36
April £922.86
May £966.20
June £585.54
July £833.15
August
September
October
November
December
Total £4,164.11
Average £832.82


My average spend at the end of June was £832.74. It’s now increased by 8p to £832.82. I spent over £100 on Powerlifting, and £70 on hotel accommodation this month. Although the monthly total was in line with my annual average so far, I think it’s still a little high. I’m comfortably below my £950 Goal for 2014 which I’m happy with. I believe I can bring the average down to £799 by the end of the year. I know I have some one off spends in August – Holiday, plumbing, and Powerlifting competition entry to name a few. I’m unlikely to see noticeable changes in this area next month. 



Savings Rate

I have a goal to save/invest at least 50% of my income every month for the remainder of 2014. My biggest ever pay packet, and second largest dividend payments have contributed to me saving and investing 74.1% (£2,078.92) of my income this month. My average for the year has now decreased to 74.6%. This average is almost 50% higher than my goal for the year, which indicates that it was too low to challenge me this year. In 2013, I saved and invested 38% of my income which I was impressed with at the time. I attribute this transformation down to recording expenses and income. Being accountable for every penny you spend and tracking every pound you earn is a motivator in itself. If I were to give anyone one piece of advice to improve their finances it would be to Record Everything.

Thank you all again for supporting me and for taking the time to read about my month.


How was July for you? 


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