As mentioned in my Welcome post, I hope to use this blog as a bit of an accountability tool for my expenditure and savings. I am NOT a super hardcore frugal FIRE-chaser, but I do follow the basic principles such as ‘spend less than your earn’; I’ll definitely touch upon this in the future so it makes more sense. My goal is definitely not to be a guy that retires by 35 because it doesn’t align with what I want do with my life.

Expenditure

I usually reconcile my expenditure at the start of each month for the previous month. I currently track all my spending using PocketBook (check out the app here, I will likely create a separate post on this later!). Their web app enables to you export your transactions in a .csv format. I simply select the date range of transactions I want, export as a csv file and copy the data into my spreadsheet. I have dynamic Pivot Tables in my spreadsheet enable me to drill down on my historical transaction records. 

Table 1: March 2020 Expenditure

So as you can see above, in March I spent about $280 less than what I had budgeted! Not bad, however there are some caveats…

• Banking & Finance: Pretty much spot on as budgeted. This includes mortgage repayments as well as repayments to ‘The Bank of Mum and Dad’. Based on the current repayment trajectory, I aim to pay off the parents by April 2022 so this is a relatively short term expense.
• Groceries: It is a bit over however does include items for longer term consumption ($90 for 3kg of protein powder, $60 for 2kg of coffee beans) 
• Transport: This will generally be lower most months as it contains a lump sums (Car servicing, car registration and Myki). The only monthly cost will be for fuel. 
• Home: Nothing out of the ordinary, just timing of payments such as council rates and garden maintenance. I paid for both twice in the same month – expect the number to reduce in April.
• Insurance: Similar to transport, will be generally lower in most months as the monthly costs transacted are the Private Health Insurance and Car Insurance. Building insurance for my IP is paid annually.
• Entertainment: I wish I could say this was spent on a fun night out but sadly not. The main reason for this cost blow out is renewing some annual subscriptions, as well as paying for some web hosting, website domains and web development tools. These aren’t strictly ‘entertainment’ however I just put them under media subscriptions because it was the closest category that still made sense. I managed to snag a good deal with VentraIP as they had a promotion for $1 hosting for an entire year! I have increased the budget allowance for this anyhow. 
• Shopping: A little bit higher than usual, with the main cost being attributable to purchasing some PC components. Unless my online impulse shopping ramps up in April I don’t see much spending in this category for the next few months…

Savings Rate

The Table below summarises my income, expenses and savings rate for each month. As you can see there are some lumpy payments that occur for things such as Vehicle Registration, paying for my annual Myki, and cash outflows for emergency situations. 

November, December and January are large outliers due to the following reasons:

• Personal emergency in November, had to withdraw $7,000 to pay for flights and accommodation on short notice.
• Went on holiday in December, which included accommodation bookings and eating out a lot more than I usually do. Additionally, purchasing Christmas gifts for friends, family and colleagues (some of this may have been in November as well!)
• For January 2020 – I think this was simply timing in pay cycles and getting rental payments, which explains why income in February 2020 was a little lower than typical.

Table 2: Summary of Monthly Savings Rate

Although I don’t consider this an outlier, February 2020 was pretty hard on my savings rate as I had a few big purchases come up that month: Gym membership renewal ($700), Myki (~$1800), some maintenance work on my car ($800) … not a great month at all!

Thankfully, March pretty much cancelled out February’s additional spend, as I managed to save approximately $2000  in cash and $600 in increased equity, predominately due to cutting back dining out and buying coffees as a result of self-isolating and working from home. 

Lastly, my ongoing Savings Rate for the current Financial Year is below. It’s looking alright for the moment. Note that this savings rate contains pre-tax elements from rental income (i.e. savings rate based on cash flow). To determine the “true” take home savings rate there are other interdependencies such as tax deductions, HECs payments and more. 

Table 3: Summary of Savings Rate Financial Year to Date

I hope to continue these every month as it will be interesting to see whether I can improve my savings rate for the last three months of the Financial Year. I have a feeling the COVID-19 situation will continue on for these months and so I could very well be hitting close to a 15% savings rate by the end of June!

That’s all for now!

Cheers, AussiePersonalFinance