A blog about dividend investing and financial independence for a person supporting a 7 person family on one income. My goal is to be retired at age 55 to pursue other passions in life and rely on a passive income stream generated from dividends.
Thursday, June 23, 2016
May 2016 FrugalMaster Results
May was mostly quiet
here in the DFG household. My daughter
was baptized and we
celebrated that. My older daughter had a
birthday slumber party. That is always
interesting to see how teenage girls act these days. They were all good kids and even went to bed
at a reasonable hour. Even on the
finance side it was mostly quiet. I will
write about some of changes in another article that in the long run will
benefit my family and I. Now let's get
on with the show and see if I came out ahead this month.
I posted my
dividend income already. It was
lower compared to last year due to some changes and dividend cuts. Nevertheless it was still income I did not
have to work for.
On my paycheck side it
was steady Eddy. The only difference was
I started my investment in my company's employee stock purchase program. It is a great deal as long as you hold the
stocks long enough to avoid short term capital gains taxes.
First they take out a
percentage of your income from each paycheck.
At the end of a fixed period of time they take your money and buy company stock at a 15% discount. The
best part is they take the lower of the 2 stock prices that are measured at the
start and end of this time period.
For example, May 1st
starts the period and it ends on August 30th.
If the stock on the 1st is $20/share and in August it ends at $40/share
you get it for $20*.85=$17.00 per share.
You can't beat that so
I am currently sinking 1% of my pay into this program and may increase it the
next period if I think the company is heading in the right direction.
This month was pretty
good. I came in under budget on all my
"needs" categories. However my
wants category was about double what I had budgeted. First of all I didn't plan on (oops) the
expenses related to the celebration from my daughter's baptism. That was ~$150 dollar expense I categorized
under wants. Sure I could have just sent
the family home with no lunch but it was the least I could do for having them
travel the distance to our church.
Again I just want to
point out to everyone that my house is still the largest monthly expense I
have. Especially when you factor in
maintenance and utilities for the beast of a large home. I am still working on aligning my simple
lifestyle goal with my wife. I hope once
we are on the same page it will lead to a downsize in possessions and home but
NOT the quality of life.
If we look at my cost
of living over time versus my income the downward trend YOY continues. I attribute that to my salary increase this
year as well as continuing to life a frugal life. My goal is to get that down to 50% one
day. I highly recommend to any of you
who are just starting out in life to set that goal as well. It will teach to live well within your means
and allow you to invest early and often.
Well we did it. Another month of savings. Not as kick butt as last
months but still double digits. In
the end it was a cool 28% saved. Lower
than last years's 36% mostly due to going over budget in my wants category and
a decrease in taxable dividend income.
Still this makes 4/5 months of being in the green.
With that said I was
able to funnel the full amount into my emergency fund and vacation and holiday
funds. I didn't purchase any new stocks
this month as I continue to build up my emergency fund. At this time those 3 savings goals consume
all free cash after my expenses.
Next month will be
different though as I shift my money around.
This will cause me to have to pick some new companies to invest in which
is always fun. I look forward to sharing
what I have done and what I will buy soon.