September was a birthday month for Mr. TJL. He is a grand 43! To celebrate we went bowling with some close friends.
His driver’s license expired; he renewed online. We thought this would be relatively easy and way better than our local DMV (which has the typical horrendous woman and is never open except at the most inconvenient times). However, three weeks later, he still doesn’t have a new license.
Anyone else renewed their license online? How long should it take? I guess we will making a phone call soon.
Anyway, birthday months always lead to more spending, but this month we came in about $300 under our operating budget. We had few yearly expenses come due.
Our bottom line, while still in the red (negative), vastly improved this month due to increased monthly income through the art business.
Mr. TJL earned over $2000 this month with minimal business expenses. He had an art show and couple of commissioned pieces. Plus, he has work lined up for the rest of the year. I hope to replenish our emergency fund accounts and then start saving to pay off the rental house.
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 September 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.
Our overall income increased in September. In addition to increased business income, our dividends paid out this month. These are automatically re-invested. Concurrently, we kept our expenses under budget.
This stellar combination resulted in a savings rate of >80%!
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 $1,573 (as of 9/1/2017) per month. In retirement, we expect to withdraw $2,733* per month.
Expenses tabulated in the chart combine the household expenses with the business expenses, so it does not reveal our true cost of living, which has stabilized to near $3000 per month. I am hoping that this level of spending 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.
Only three months left in the year! I hope I can get that bottom line closer to zero. Are your finances still on track?