We plan on presenting our monthly financial update so that you can ride along on our trip to financial independence.
August Monthly Income: $8,344
Nothing fancy to report here. This is simply our two salaries lumped together for the month (our take home pay). Note, this amount will increase in March 2019 due to my annual salary adjustment and bonus (and in September 2018 due to Tara’s annual salary adjustment).
August Monthly Expenses: (-$4,445.23)
Our expenses are broken down between variable and fixed. Let's take a closer look:
August Variable Monthly Expenses: (-$1,370.50)
We typically allocate $800 per month for variable spending, so we went over this month, but that’s because August is typically a crazy month with back to school, Brooklyn's regular vet visit, and the semi-annual dentist visit for the kids. Our kids have two sets of very generous Grandparents that also helped with back to school expenses (otherwise yes, our spending on school clothes and supplies would have been higher).
We will make up for this overage in September when things settle down. As you can see from the charts below, the Dog Boarding / Vet made up 47% of our monthly variable expenses in August. The boarding was due to a trip we took to New York City in late July (which was unexpectedly extended for several days due to a cancelled flight), and the vet visit was for a regular checkup. If you take one or both of these out (which would be more in line with a typical month for us) our spending for August would have been great!
We will make up for this overage in September when things settle down. As you can see from the charts below, the Dog Boarding / Vet made up 47% of our monthly variable expenses in August. The boarding was due to a trip we took to New York City in late July (which was unexpectedly extended for several days due to a cancelled flight), and the vet visit was for a regular checkup. If you take one or both of these out (which would be more in line with a typical month for us) our spending for August would have been great!
August Fixed Monthly Expenses: (-$3,074.73)
These are the expenses that are (for the most part) fixed from month to month. We budget these expenses to be $3,237.25 per month, but usually we are able to stay under budget over all because I tend to purposefully over budget for certain things such as utilities. This month represents $162.53 under budget (thank you $31 electric bill!).
We have $3,898.77 left once we deduct our monthly variable and fixed spending from our monthly income. We are now going to divide this up between our Vanguard account and our cash cushion (you could leave this in your regular bank account for the cash cushion portion).
August Monthly Investments (Taxable): $2,955
We deposit $2,955 in our taxable Vanguard Account. I typically make a deposit on the 15th and one on the 30th of every month. This account had market gains of $10,663.54 in August.
August Monthly Investments (Pre-Tax): $1,880
August Monthly Investments (Pre-Tax): $1,880
$1,880 is deposited to my 401k (which obviously is taken out of each paycheck before tax). This account increased by $9,962.92 in August (market gains).
Note, total increase in August investments = $20,626.46 (Thank you Stock Market / Compound Interest!)
Note, total increase in August investments = $20,626.46 (Thank you Stock Market / Compound Interest!)
This amount comes from the difference of our leftover $3,898.77 (shown above) and the $2,955 that we deposit to Vanguard each month. For most of the year I like to keep this amount in our regular checking / savings account just in case an unexpected expense pops up. At the end of the year I will move this to our Vanguard Money Market Account which will eventually be part of our cash cushion in early retirement.
How did your budget look in August (or September (our September is coming soon!))? Is August a higher month for you like it was for us? Are you watching your budget closely?
-Erik
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