The Ledger –July 2017 expense reports

We had better than average income in July due to an uptick in the art business. Mr. TJL sold a few commissioned pieces and several pieces in local galleries. Whenever we sell in a gallery, we incur fees that can be 15 – 40% of the sales price. Some of these places take quite a chunk.

We might have outgrown our hometown. A few scouting trips early next year, might reveal better opportunities to get exposure and lower commission fees! We also like the idea of participating in regional summer festivals to get sales up more!

But first, we need to fix our camper (again!).

About 18 months ago we noticed that our roof need a bit of repair. The inside foam seemed a bit, well, black and stinky. Mold or mildew?

Anyway, I researched some materials and we replaced the inside roof. However, the materials have proved to be too heavy and over the last year, the exterior roof has caved creating a lovely spot for water to enter the camper. Consequently, we need to rip everything out and try again.

This time we will need to reinforce the roof frame and seal the outside, plus refinish the inside ceiling with a sprayfoam or other light insulating alternative (?). I hope to have this done in time for a road trip to Mesa Verde in November!

I have wanted to take advantage of the National Park free admission on one of my 4-day weekends. The next date available is November 11-12. In Colorado, the weather can be quite wintry in November so I am hoping we can eke this one out in Mesa Verde where, if we are lucky, the weather might be more fall-ish. Maybe we should try to get our camp heater working too!

Mesa Verde National Park is located in southwest Colorado, and was the home for the Ancestral Pueblo people as early as AD 600. There are impressive cave dwellings, hiking trails, an archeological museum and educational tours. Although most of the activities and programs are not available in November, we should see and learn enough to make the trip worthwhile (Plus, I have a friend who could serve as a private guide!). Regardless, southwest Colorado is one of my favorite places; the beauty and geology in the area is astounding!

The Expense Report!

In the tables, I produce a monthly and year-to-date summary of expenses, the monthly spending average, and the budget. I keep track of progress and spending behavior. It is much easier to detect any problem areas by keeping careful track of where the money is going.

Summary of July 2017 spending

Green highlighted fields indicate income. We have four sources of regular income; salary and related benefits, rental income, interest and dividends and Mr. TJL’s business income.

Orange highlighted fields indicate expense and are denoted as a negative value in parentheses. Our regular expenses are categorized by monthly expenses and yearly expenses. The combination are our total operating expenses. Additional expenses are paycheck deductions of charitable contributions, health insurance and income taxes.

Blue highlighted fields are our investment and savings contribution.

The bottom line is the balance.

Our monthly budget is tabulated in the far right column.

 

Once again we are earning a small profit on our rental property, albeit less than last year as the rent decreased. Sometimes, this occurs as a result of a flooded rental market or bad timing. Seeing how the property is marketed toward college students, it is probably a consequence of both.

Our “basic” income is back up to normal levels, plus we earned higher than normal income from the art business despite higher than normal business expenses.

In addition, our expenses decreased significantly in July since we didn’t take any big trips or have any large annual expenses.

As a result, we elevated our savings rate to >70%! Most of our larger expenses occurred during the first half of this year, and now we are finally seeing more normalized expense reports. We decreased our bottom line, year to date, to $3,394 in the red; a vast improvement from last month ! If we keep our spending low for the remainder of 2017, we should break close to even.

 

The Jolly Ledger’s Income Statement

I prefer to manage our finances like a business so I track all sources of income and expense. Below are the details for the monthly summary.

 

2017 FIRE Progress

I am on-track to retire in four years at age 45. To visualize my progress, I chart my expenses versus my passive income. Passive income is calculated as 4%, the safe withdrawal rate, of my investment balance including holdings in 401k, traditional IRA, Roth IRA, and brokerage accounts.

Due to the contributions and earnings on our investments, our passive income is $1,501 (as of 7/1/2017) per month. In retirement, we expect to withdraw $2,733* per month.

Our spending decreased in July, and we hope to keep our spending at this lower level through the end of the year. I am hoping that spending around $3000 per month or less becomes our “norm”.

*Total retirement spending is expected to be $40,000 per year. We will receive $7,200 per year in rental income. Our investments will have to provide us with the remaining $32,800, hence $2,733 per month. If Mr. TJL’s art business provides any income, we will be able to withdraw less, but we are conservatively planning as if we will not make any income in retirement.

 

Tracking expenses is a powerful tool for keeping control over finances. Do you track expenses or just let it ride?

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