Welcome to my May 2013 Money Making, Saving, and Investing Report!
This is the first of many reports I plan to write once a month to detail my progress at making more money, saving more money, and investing. Here I will show you what I’ve had success with and where I’ve not been so lucky.
In my monthly reports I’ll include charts and graphs so you can see how I’m doing. I’ll also include a detailed breakdown of income, expenses, and investments to highlight important things I’ve learned each month.
Derek, why are you doing this? It is too personal or no one really cares about your details… Well, there are a couple of reasons:
- I’m doing this to help motivate people to make more money, save more money, and invest for the future.
- I’m also doing this to force myself to take a much closer look at household’s money to make adjustments for maximum efficiency.
- Talking about money in this amount of detail is taboo in my culture, and I’d like to change that by being as transparent with folks as possible.
- It might open up advice others can give me on how I can make/save/invest even better!
Please understand that my wife and I have both put in a lot of work to obtain highly technical degrees (Mechanical Engineer and Physical Therapist), and we’re pretty well compensated for these skills. It has taken us a lot of hard work and sacrifice (four years of college for me and 7.5 for my wife), and some outstanding luck to for us to make it this far in our careers (10+ years in workforce). But I’m interested in seeing if I can take where we are to the next level. The good news for all of us is that if we put our mind to it, practically anything is achievable.
Hopefully these reports will inspire and help everyone here to have a more open discussion about money. That’s my goal! Let’s get started with the details…
Money Making (Income)
Salaries (after taxes) — $9,034.27
MoneyAhoy.com Income — $2.56 (estimated)
- Google AdSense Ads — $2.48 (estimated)
- YouTube Ads — $0.08 (estimated)
Dividend Income – $0.00
TOTAL INCOME = $ 9,036.83
Money Saving (Expenses)
First, let’s look at some graphs!
A couple of things to note for this month:
- I’m counting our housing principal as savings (not as an expense). To me, it is just very illiquid form of saving money that we would theoretically get back when we go to sell the house.
- I included several expenses that we have eliminated on the chart just to illustrate this fact.
On the expenses front, a couple things jumped out at me:
- Childcare expenses are huge for us! We have two younger kids at a normally priced day-care for the area. This is a largest expense and may represent the best opportunity for improvement. We have already been looking around for alternatives that will help us save here.
- Groceries is pretty high for just a family of four. We need to more closely analyze what we are purchasing to see where we aren’t getting the best bang for our buck.
- We are living in an expensive house, so the interest and taxes are going to be much higher than “normal”. We will need to cut back in other areas to hit our savings stretch goals. We’ve casually discussed the idea of downsizing to save even more, but think we can make other sacrifices to enjoy this luxury. However, nothing can be off the table 🙂
The savings pie-chart was a little eye-opening to me as well. Here are the things I noticed:
- The amount we are saving into our 401Ks looks “healthy”.
- The amount going into home principal is also good (thank you 15-year mortgage)!
- That light purple section (16.1%) is too big!!! We need to shift the amount we are putting into retirement or investing accounts each month to balance things a little better since we have our emergency fund set.
- Overall May 2013 Savings Rate (total savings / gross income) = 54%, this feels pretty good as a starting point.
Special expenses for the month:
- Vacation (10-year Wedding Anniversary) – Cruise Excursions – $508.00
- Soccer Trophies – $24.89
- Mother’s Day – $42.61
Notes on special expenses:
- We are going on a cruise without the kids for our 10-year wedding anniversary. It killed me to do it because this isn’t exactly the cheapest vacation by a long-shot, but my wife has always wanted to try one. We have been actively trying to get the price of it down as much as possible, so we’ll see where the final total ends up.
- I waited too long to get organized with the kids to get/make a gift for Mother’s Day. As a result, we paid the price by having to select something nice quickly. Hopefully, this will teach me to plan ahead more so that we can get her an even better gift for less!
TOTAL EXPENSES = $ 5,366.50
I’m just getting started investing outside of our 401Ks (vs. trading – which I’ve got a fair amount of experience with). Because I was a little heavily invested in stocks, I wanted to get into bonds some to balance things out a bit. Yes, I know everyone and their brother thinks bond prices are going to be crashing soon due to rising interest rates if/when QE is tapered.
Anyways, I bought: 100 shares of JNK @ 41.012 (with $5 commission) — $ 4,106.20
- It pays a monthly dividend that works out to be ~6.4% APR.
- A disadvantage is that these dividends are unqualified because the income is from bonds, so they are taxed as ordinary income vs. the lower 15% rate.
- This is basically a junk bond ETF by SPDR Barclays
TOTAL INVESTING = $ 4,106.20
Actions Plans for This Month
- Try to find less expensive day-care alternatives
- Scrutinize grocery bills – there are several things than I fancy that I can probably substitute out for lower cost items
- Plan to sell Camry and get a Corolla (36 highway mpg vs. 26 highway mpg)
- Determine when student loans will complete (consider paying off early if they extend into 2014?)
- Get cheaper car and home insurance combo through GEICO vs. State Farm
- Discuss eliminating phone damage insurance
- Consider increasing Wife’s 401K contribution up to the max allowable by the IRS ($17,500 for 2013)
- Discuss what would be a good savings rate target to aim for going forward
Check back in next month to see how well we did with our action plan!