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January 2012 Cash Flow

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january 2012 cash flow

January was a close call

January 2012 was a great month for net worth, but not so much for cash flow.

We are planning to save 100% of my paycheck in 2012 and will only live on Mrs. RB40’s pay check and our side income. This month we were successful, but only have $399 left to put toward extra saving. Read on for the details.

Income January
Mrs. RB40’s paycheck 3069
rental income 1,042
side income 707
dividend, interest 47
misc 330
Total income 5195
Expense
Housing -2,299
cash allowance -975
transportation -55
pet -21
baby* -63
bills -273
medical -403
entertainment -10
misc -697
Total expense -4,796
Extra Saving 399

 

*There is a bit of fuzzy accounting here because I don’t count the cost of baby daycare. We pay $1,035 a month, but it is covered with DCAP from my paycheck. It is already deducted pre-tax and we wouldn’t have seen it anyway. Also, once I quit work, then I’ll be home to take care of the little guy so I think we can zero it out as we look forward to the future.

** I don’t count my paycheck here because we are trying to live on one paycheck. We are preparing for the day that I leave my day job.

Income (Target > $5,000)

Mrs. RB40 is paid biweekly and the amount shown here is post 401(k) contribution. One of her check is a little bigger than normal this month, I’m not sure why. Some kind of award?

Rental Income – I’m showing all income minus expense. The property taxes are also baked in now.

Finally, we have a good month from the rentals! We had the best case scenario in January and there were minimal repairs and service call. Now we just have to keep this up.

Side Income

Retire By 40 had $707 net income this month. The income went down quite a bit from December. That’s disappointing, but I expected this income to fluctuate more than a regular pay check.

We have about $200 worth of expense this month so that didn’t help. I got my FinCon 12 ticket. They are going fast so if you want to attend, you’d better keep an eye on the ticket count. This will be a great opportunity to meet one of my 2012 goals – attend at least one conference and meet other bloggers. 🙂

Dividend, Interest, and P2P lending

Dividend portfolio – $0. No dividend payments in January, but the good news is February should be better.

Interest – $32. My $50,000 is still with ING. I’ve been too busy to do much with it, but I’m really thinking hard about I bonds.

P2P – $15. I started with $1,000 last year and just added another $1,000 a few days ago.

Misc

I made $80 by selling a couple of things on Craigslist. There is also a $250 check that I deposited in early January. I complete forgot where this came from. Maybe a Christmas gift?

Expenses (Target < $4,000)

Housing – The housing expense is very high, but it’s stable at this point. Living in this location allows us to cut expenses in transportation and bills. The property tax and HOA are baked in.

Food and Cash Allowance – I think about 90% of the cash allowance goes toward food and groceries. Mrs. RB40 also received her 10% editor pay in cash. December was a good month so she got more spending money than usual. This category will be better in February.

Transportation – This is all for gasoline and public transportation. I got some reimbursement this month so it’s lower than usual.

Baby – I got a humidifier for baby RB40. The rest is for diapers.

Bills – The weather is getting nicer and our heating bill is slowly creeping down. This category also includes internet and insurance.

Medical – Baby RB40 went to see his doctor twice in December and the bills finally came. I also had 4 teeth filling redone. Those silver fillings lasted 15 years, not too bad. Hopefully these composite fillings last at least 10 years.

Entertainment – I forgot to cancel XBOX live subscription and got charged. 🙁

Misc – I purchased a plane ticket for my mom to go visit Thailand. She will get cataract eye surgery and some dental works done when she’s there. I think it’s well worth it.

January Cash Flow

All in all, January turned out okay. Our expense was a bit high, but I’m pretty sure we will be able to bring it down to around $4,000 in February. We should have more dividend income as well. I would like to see more positive cash flow than $399, but at least we are not in the red.

How about you? Did you have a good January?

If you need some help keeping track of your finances, you should try using Personal Capital to manage your budget. It’s a great free budgeting tool. You can keep track of your income, expenses, and net worth, all in one place. Personal Capital is geared for investors and have many great tools. See my review of Personal Capital and how they helped me reduce what I’m paying in investment fees.

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{ 40 comments… add one }

  • Shaun @ Money Cactus February 1, 2012, 12:44 am

    Great work on managing to stick to the game plan! I expect your side income will ramp back up as the year moves into full swing. I’d love to go along to FinCon 12 too, but might need to keep saving!

    P.s watch out for those humidifiers, they tend to suck a lot of power.

    • retirebyforty February 1, 2012, 9:42 am

      Thanks. 🙂 I would like to see the side income above $1,000/month. I was a bit hesitant about spending a lot of money on a conference, but I figure it will be a good investment. I will be able to meet many bloggers and learn a lot of things. It will also be business expense so I might as well do it. Hope you can be there, but I understand.

    • retirebyforty February 1, 2012, 9:43 am

      Tickets are going fast. You should check the website, but I think they are under 200 tickets left now.

  • Lisa @ Cents To Save February 1, 2012, 4:44 am

    Great January wrap up! It was easy for me to read and understand. Still thinking about Fincon12…… Such a procrastinator!

  • MoneyforCollegePro February 1, 2012, 5:45 am

    Just curious if you factor any retirement/investment expenses into your budget? Is this where the extra savings goes towards?

    Awesome budget, and I agree that your side income should ratchet up quite nicely in the new year!

    • retirebyforty February 1, 2012, 9:45 am

      I didn’t factor in retirement saving here. Mrs. RB40 contribute to her 401(k) and we don’t see the money anyway. I’m just looking at pure cash flow in these monthly post.
      Extra saving will go into the general fund and be directed to the saving account and then probably an investment account later.

  • Michelle @ Making Sense of Cents February 1, 2012, 6:24 am

    Great job!

  • Thomas - Ways to Invest Money February 1, 2012, 9:22 am

    Yeah you did cut it close but its nice considering you are still getting a paycheck as well. If you are able to test out living off of one income for a while then it will work out and you will get better as the months count down until you quit. Plus you can stack the money from your paycheck as a buffer. Great job hopefully Feb is much better and you get the income bounce from this site.

  • Dollar D @ The Dollar Disciple February 1, 2012, 9:57 am

    Sounds like you had a pretty decent month! My family did too though we also had some unexpected expenses and we ended up buying a bike for my wife.

    Keep at it, and I know you’ll reach your goals!

    • retirebyforty February 1, 2012, 2:11 pm

      Any month in the green is a good month. 🙂 A bike is great for her health. I think that’s a good buy.

  • Aloysa February 1, 2012, 10:20 am

    I sent you that check. How come you don’t remember? lol
    Great job. I think January is a relatively slow month as far as ad revenue goes. I bet it will get better in Feb! 🙂
    Can’t wait to finally meet you at FINCON12. 🙂

    • retirebyforty February 1, 2012, 2:11 pm

      January was very slow. I hope it picks up soon or else it’s going to be difficult to reach my retire by 40 goal….

  • Jeff @ Sustainable Life Blog February 1, 2012, 12:50 pm

    I’ve been looking forward to reading this after the rough months you had with the rentals prior – glad things are looking up for you joe!

    • retirebyforty February 1, 2012, 2:12 pm

      Now I’ll have to save up these extra money for a repaint in the summer. It’s never done, but I’m very happy that Jan. was a good month.

  • krantcents February 1, 2012, 5:47 pm

    I had my best month so far. My traffic increased 50% as well. Now we start all over again.

    • retirebyforty February 1, 2012, 9:23 pm

      Great job!

  • Hunter - Financially Consumed February 1, 2012, 6:29 pm

    I have always admired you disciplined approach to record keeping and your positive cash flow is proof that it’s working well for you. I’m looking forward to seeing how well your 4-plex does this year.

    • retirebyforty February 1, 2012, 9:25 pm

      Thanks. I don’t think we are very detailed. I use the cash allowance as a catch all and could have broken it down more, but it will be way too much work. We don’t actually spend all the cash and have some stashed away in envelopes. I think the 4 plex will do much better this year and we should make a little money.

  • Financial Samurai February 2, 2012, 7:51 am

    $399 in the positive is postivie!

    Joe, you might as well just detail how much income you are saving from your paycheck to make it complete since you’re doing this anyway. No big deal, and it would be helpful to know!

    When is the target date for quitting again?

    Best, Sam

    • retirebyforty February 2, 2012, 10:23 pm

      That’s too much sharing. 🙂
      Target date is April 2014, but I think it’s getting moved up to this year…

  • BE @ BusyExecutiveMoneyBlog.com February 2, 2012, 7:54 am

    Wow this is really inspring! Even for those of us not yet ready for that level of disclosure, I really appreciate the insight that stimulates my thought on my finances.

    • retirebyforty February 2, 2012, 10:24 pm

      Glad to be helpful!

  • Miss T @ Prairie Eco-Thrifter February 2, 2012, 8:46 am

    Great job Joe. I think you are doing great. January always starts out slow. It’s post holidays. February I am sure will be much better.

    • retirebyforty February 2, 2012, 10:24 pm

      Thanks for the encouragement. 🙂

  • MoneyCone February 2, 2012, 12:51 pm

    Fantastic Joe! Always fascinating to see how you manage your cash flow!

  • Roshawn @ Watson Inc February 2, 2012, 3:52 pm

    Great Joe,

    You are getting there. I’m enjoying watching your progress!!!! That’s awesome work, especially considering how many things came up. Cheers!

    • retirebyforty February 2, 2012, 10:25 pm

      Things always came up, I guess that’s life. Thanks!

  • Impressive. You are smart to save one income in prep for the baby. You say going to fincon12 is a business expense. True, but are you able to deduct it somehow? We file jointly and don’t have enough deductions now. I’d love to go to fincon, but I’m having a hard time justifying the expense to myself.

    • retirebyforty February 2, 2012, 10:27 pm

      Baby is here already. Now I’m preparing to quit my job. 🙂
      I’m pretty sure I can deduct fincon12 from my blog income. It’s all about learning and networking right. You’ll have to check with a tax professional to make sure.

  • SB @ One Cent At A Time February 2, 2012, 8:19 pm

    When you are saving one full paycheck, there’s nothing wrong here. That 40 can become 42 whats the big deal when you see the life span of 80 years, 2 years doesn’t count much.

    • retirebyforty February 2, 2012, 10:29 pm

      Hmmm.. The big deal is when you’re 40 and don’t want to work at the full time job anymore.
      2 years can kill a man. 🙂

  • YFS February 4, 2012, 7:56 am

    Woah.. great job on the rental income! I’m curious has the rental property broke even in terms of repairs/cash out lay?

  • Ginger February 5, 2012, 9:48 am

    Have you thought about getting rid of escrow for your primary house? By doing so you would have more flexibility in monthly payments. Congrats on being green!

    • retirebyforty February 5, 2012, 7:43 pm

      We already pay the tax and insurance separately. That’s the only way to go. Thanks! 😉

  • Elizabeth @ Broke Professionls February 5, 2012, 11:12 am

    I hope you bought a cool mist humidifier for the baby! We had been using a warm air model, and ended up with a mold problem. I learned my lesson! And if you’re looking for long-term savings on diapers, have you thought about cloth? I stay at home with my son, and have found cloth diapers to be a very economical and convenient option.

    • retirebyforty February 14, 2012, 10:09 pm

      It was a cool mist. I don’t think cloth diapers will work for us since we share washing machines with other people in our building.

  • Personal Finance Journey February 5, 2012, 7:00 pm

    Great work! I wouldn’t worry about the online income as it tends to ebb and flow. February should show an improvement. You guys are doing a great job living on one income. More people should try to do this before one partner quits their job.

    • retirebyforty February 5, 2012, 7:43 pm

      Thanks! It’s better to see how the finance works out before one person quit their job.

  • Rene February 6, 2012, 5:38 pm

    To be in a positive with a whole extra paycheck uncounted & multiple income sources is pretty amazing. Great job!

    • retirebyforty February 7, 2012, 9:12 am

      Thanks for the compliment! I was just thinking that most families lived on only one income 40 years ago. We have way too many things to buy today. 🙁

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