May 2013 Progress Report 3

I track both my income and expenses monthly. I started this process over two years ago to provide a better picture of my financial standing, and do this in tandem with a monthly net worth update. This process paints a fairly clear picture of my financial status and helps me identify the savings I’m adding to my net worth snowball as well as the growing interest my net worth snowball is accumulating.

May 2013 Income:

$5,157…Net Income

$1,171…401k Contribution

$6,328- Total Income

May 2013 Spending

$ 315… Housing

$   24… Utilities

$ 134… Groceries

$  55… Restaurants & Bars

$  36 … Entertainment

$ 244… Transportation

$     0… Travel

$ 70… Cell Phone

$   0… Clothes & Shopping

$ 80… Gifts

$ 33… Gym/Fitness

$ 45… Drugstore & Dr.

$1,036- Total Spending

84% Savings Rate!

$309,115 ….May 2013 Net Worth

May was a stellar month financially in all facets.

My net income ballooned up to $6,328 due to receiving an extra check this month due to having five pay periods.  Receiving that extra check made the fact that I have worked several weekends in addition to my standard five day per week routine slightly more tolerable.

My biggest accomplishment this month was focusing on spending and ratcheting down my spending to just over $1,000 which is the 3rd lowest monthly total in my 29 months of detailed tracking. The primary factor for this large spending dip was my ability to keep my total grocery plus restaurant/bar bills below $200 for the month at a rate of $189. Last year I averaged over $400 spending for the “food and dining” element of my life. Keeping it at this level probably isn’t sustainable as I do consume lots of protein and produce, and I think it was made possible by the timing of my Costco trips. However, I should be able to continue trimming some budgetary fat from my restaurant spending. This month also featured higher than normal spending for the “gifts” category as I purchased gifts for Mother’s Day and my sister’s birthday. I very nearly kept my expenses under four digits which I’ve only accomplished one other time.

On a net worth basis, March was excellent as my net worth jumped nearly 4% for a $11,772 gain and month end total of $309,115. I finally surpassed that elusive $300,000 milestone I have been eyeing ever since eclipsing the $200,000 mark in mid-2011.  The great thing is that savings only accounted for 44% of this month’s net worth jump while the other $6,500 was due to investment gains as the stock market continued its torrid run. These occasions reinforce the importance of investing and the power of compounding interest as my portfolio’s monthly appreciation surpassed the amount of money I diligently saved while slogging through 60+ hour work weeks and long, congested, commutes. Meanwhile, my little stock and savings funds just chugged along while eclipsing the amount of net worth growth I could add despite receiving an extra paycheck and logging one of my lowest spending figures ever!

I am not going to bank on that rapid portfolio acceleration every month, but it is very exciting when it happens. That being said, with the all-time high levels and lack of consistent values on the stock market, I am dialing down my stock purchases for the moment to only include Roth IRA and 401(k) purchases. The rest I am funneling into cash and Lending Club investments for the time being. However, my cash stockpile is now over 20% of my net worth, so a few market dips would be appetizing to deploy some hard-earned cash.

My net worth now stands at nearly 18 times my 2012 spending levels and would require me to maintain a 5.6% withdrawal rate of my net worth to fund my current lifestyle with annual spending around $17k. 4% is considered the standard safe withdrawal rate across many personal finance circles, so I have some more ground to cover before financial independence. Based on a 4% withdrawal rate and $17,500 2012 spending, I would need to have a net worth of about $440,000 to be financially independent. I remain very excited and confident about my prospects of achieving this milestone before age 30.


3 thoughts on “May 2013 Progress Report

  1. Reply Dividend Mantra Jun 17, 2013 7:08 pm

    Wow! Fantastic month! Very, very inspiring.

    You’re savings rate is off the chart. Awesome stuff. I was holding out some hope that I could get my expenses near $1,000, but now with health care insurance running me $130/mo there is no way.

    You’re killing me on the housing and food categories. Awesome stuff. Keep up the great work. I’m super envious of your housing expenses. Mine are running almost $500/mo. I’d love to get this down to much less, but unfortunately I don’t see how it’s possible because my girlfriend has a child so we can’t split a studio or a 1-br.

    Keep it up!!

    Best wishes.

    • Reply Net Worth Snowballa Jun 22, 2013 1:39 pm

      Thanks for stopping by and the kudos Dividend Mantra!

      I set my goals pretty high this year by shooting for an 80% savings rate, and so far I’ve been fortunate enough to eclipse that goal. After following your awesome progress over the past couple years I’ve been trying to get my expenses down as low as your monthly levels usually in the $1,200 range, and am finally getting down beneath those levels. I’m at a bit of an unfair advantage compared to you in that I’m not shelling out for healthcare or student loans payments either.

      I have optimized my transportation expenses by getting a fuel-efficient commuter, but your transportation expenses with the scooter put mine to shame.

      Yes, I’m lucky to have housing expenses so low especially when rundown 900 SF houses in my neighborhood fetch over $300k. My girlfriend is pushing to move to a larger 2 BR place, but I’m trying to hold off on that move as I love having my monthly rent in the low $300’s.

      Keep on inspiring and setting a great frugal example for others to follow!

  2. Reply investlikeafool Oct 26, 2013 10:11 am

    Wow, very inspiring seeing you become financially independent at age 30 !!
    I wish I can get to this spending levels. Its impossible for me. I will need to continue my work for another 15 years :(. But I’m confident I will reach. good luck !!!

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