Income & Expenses For March 2018

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 inspiration for your own budget.

Below are my income and expenses for March 2018. You can see all my monthly budgets here.

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Income
Wages	$13,688.42
Dividends	$2,527.12
Other Income	$614.44
Total Income	$16,829.98
Expense
Federal Income Tax	$1,318.22
Federal Tax Pmt/(Refund)
FICA-SS	$459.03
FICA-Medicare	$107.35
Housing	$16.40
Student loan repayment	$35.70
Food	$148.55
Gasoline	$71.39
Car Insurance
Car Reg/Tax/Maint	$32.00
Cell phone	$13.06
Electric	$33.04
Clothing/laundry	$16.20
Other Expense	$11.26
Total Expense	$2,262.20
Ex-Tax Total Expense	$377.60
Surplus/(Deficit)	$14,567.78
Before Tax Saving Rate	86.56%
After Tax Saving Rate	97.47%

Income
Wages remain my primary source of income by far. Dividend income of $2,527.12 is at a quarterly high. 

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

Total dividends for the trailing twelve months: $16,534.82, up 18.45% from a year ago.

Here is chart of my dividend income by month and year since inception of the blog in 2014.

Expense

Tax remains my top expense by far. Since tax is proportional to my earned income, there is nothing I could do about that. The Trump tax cut dropped my marginal tax rate from 25 to 24 percent, which should help lower my tax liability.

After-tax expenses reached a new low at $377.60, thanks to no longer having rent payment after buying a home! As discussed, I paid all cash for a home as part of a work-related relocation, so I no longer have rent and no mortgage payment either. This significantly lowers my expenses, as rent was the bigger expense after tax. Housing expenses will now be limited to property tax (estimated $900 annually) and maintenance. The $16.40 housing expense this month was for trimmer line replacement for the lawn mower and duplication of keys. Buying a home, however, is expected to triple my utility expenses, as I now have to pay for water with garbage disposal fee included and natural gas as well, in addition to electric. There should still be a significant net saving around $350-380 in monthly expenses going forward from the home purchase. Assuming $350/month in savings, the home bought for $40k will pay for itself in roughly 9 years, not bad. Gas expense is higher this month due to the move. $16.20 was spent on work-related clothing. The $11.26 other expense was toward bike maintenance. 

Total after tax expenses for the trailing twelve months: $9,312.02, down 9.34% from a year ago. I expect this downtrend will continue as my housing expense goes down.

Dividend to expense coverage ratio = 1.78, making another all-time high!

The chart below shows my TTM dividend (red line) versus TTM expense (blue line) since I started tracking in 2014. One is financially independent when the the dividend (red) line exceeds the expense (blue) line, which happened around June 2015 for me. Ideally, the dividend line should stay well above the expense line and increase with time at a faster pace than the expense line. On this metric, I have been making significant progress, but would like to put some more distance between the two lines in order to afford me more freedom and room for error.

Savings

My after-tax saving rate was 97.47% for the month of March, far exceeding my 90% saving rate target. I am confident I will meet or exceed my savings goal this year.

Thanks for reading!