Income & Expenses For May 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 May 2018. You can see all my monthly budgets here.

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	May 2018
Income
Wages	$13,403.42
Dividends	$796.08
Other Income	$874.39
Total Income	$15,073.89
Expense
Federal Income Tax	$1,318.22
Federal Tax Pmt/(Refund)
FICA-SS	$459.03
FICA-Medicare	$107.35
Housing	$0.00
Student loan repayment	$35.70
Food	$42.86
Gasoline	$18.84
Cell phone	$12.63
Electric	$0.00
Water	$42.22
Gas/Heating	$42.38
Clothing/laundry	$2.16
Donation	$1.00
Ebay fee	$2.85
Other Expense	$62.71
Total Expense	$2,147.95
Ex-Tax Total Expense	$263.35
Surplus/(Deficit)	$12,925.94
Before Tax Saving Rate	85.75%
After Tax Saving Rate	98.00%

Income
Wages remain my primary source of income by far. 

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

Total dividends for the trailing twelve months: $17,499.02, up 21.86% 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. After-tax expenses came in at $263.35, a new record low! The $0 housing cost this month is not a misprint; see my previous post for details. Food expense was low this month as I mostly consumed my stockpile of food and fresh dandelions and clovers from my backyard. $0 for electric is due to a credit refund. The $2.16 is for a nice lightly worn pair of brown dress shoes I bought in a thrift shop. That was a bargain I found hard to pass!

The $62.71 "other expense" was for a "new" used bike at the same thrift shop and for a new bike lock. 

Total after tax expenses for the trailing twelve months: $8,469.99, down 16.32% from a year ago. I expect this downtrend will continue as my housing expense went down.

Dividend to expense coverage ratio = 2.07, making another all-time high! Reaching 2 to 1 coverage ratio is a milestone for me. That means my expenses could double and still be covered by my dividend income. Sweet financial freedom!

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 98.00% (a new high!) for the month of May, far exceeding my 90% saving rate target. I am confident I will meet or exceed my savings goal this year.

Thanks for reading!