Saturday, June 3, 2017

Income & Expenses For May 2017

Since 2014, I have been tracking my monthly income and expenses. You can see a breakdown of every penny I earn and spend. For perspective, this budget is for a household of two in a small US city. By documenting my journey, I aim to demonstrate the feasibility of saving a significant portion of your income and provide some ideas and inspirations for your own budget.

Below are my income and expenses for May 2017. You can see all my monthly budgets here.
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May 2017
Income
Wages$10,296.36
Dividends$346.91
Other Income$123.24
Total Income$10,766.51
Expense
Federal Income Tax$735.83
Federal Tax Pmt/(Refund)
FICA-SS$427.02
FICA-Medicare$99.87
Housing$450.00
Student loan repayment$0.00
Food$79.31
Cell phone$12.23
Electric$37.90
Clothing/laundry$6.50
Amazon sale costs$2.63
Ebay fee$9.50
Total Expense$1,860.79
Ex-Tax Total Expense$598.07
Surplus/(Deficit)$8,905.72
Before Tax Saving Rate82.72%
After Tax Saving Rate93.71%

Income
Wages remain my primary source of income by far.  Dividend income this month is low but typical for the Feb-May-Aug-Nov dividend cycle, as I have relatively little in stocks paying dividend during this cycle. Next month's dividend income will almost certainly be much higher.

Here is a chart of my dividend income by month for the past 13 months:

Total dividends for the trailing twelve months: $14,140.66, up 15.3% from $12,264.73 a year ago.

Expense
Big change this month is completion of my student loan consolidation. 7 years after repaying my student loans under a variable interest rate (currently 2.65%) 10-year standard repayment plan, I consolidated $6,415.18 of my remaining loan balance to a new 10-year term graduated repayment plan at a fixed 2.75% interest rate. I did this to lock into the very attractive interest rate right now as I am almost certain I can earn better than 2.75% annually over the next 10 years by investing the money instead. Because the old loan servicer placed my loans under administrative forbearance while payments to the new loan servicer does not start till next month, there was no student loan repayment this month. My new monthly student loan payment will be $35.70 instead $160.47, a positive cash flow to invest.

The other expenses were typical recurring expenses.

Total expenses for the trailing twelve months: $10,351.20, up 5.78% from $9,568.73 a year ago.
Dividend to expense coverage ratio = 1.40.

Savings
My after tax saving rate was 93.71% for the month of May 2017, meeting my 90% saving rate target. I am optimistic that my saving rate will average above 90% for the remainder of the year.

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