Along with the monthly personal balance sheet, which I use to track my net worth from month to month, I publish a report that outlines my income and expenses. The two reports together help me focus on the total picture.
My “extracurricular” income — money I’m earning outside of my day job through writing for Consumerism Commentary and a few other online endeavors — would have been lower this month if it weren’t for a surprise client at the end of the month. This push has propelled me beyond a six-figure income for blogging and writing.
Continue reading for the details, with numbers and explanations. You can zoom in by clicking on the report.
The “Salary and Benefits” category includes everything I earn from my day job, including a 4% salary match for my 401(k). 50% of my salary, the highest percentage allowed, is diverted into my 401(k). Half of the contribution is designated before tax, while the other half is invested in a Roth 401(k). It’s too late to fully max out my 401(k) contribution this year, but I should be able to better plan my contributions next year.
“Other Earned Income” is the line on which I record income from blogging, advertising, and writing. Basically, anything I do to earn income outside of my employment are included here. When people learn that I am earning twice as much from alternative income than I am from my day job, they ask why I don’t just quit the day job and work for myself full-time. This is the goal, and I’m getting closer. I see some trends right now pointing to lower income opportunities in 2009, so I’m going to hold onto my day job, including its benefits and relative security, for a while longer.
If the trend reverses in the first few months of next year, I may decide to reduce my hours at my day job with the intent of making blogging (and everything that goes along with it) my “day job.”
“Dividends and Interest” is my first “passive” income category. Through savings accounts and investments, I’m heading towards $2,500 earned this year by doing nothing than letting my money earn more of itself.
My vacation helped me keep my expenses low this month. I only stopped for fuel twice and managed without a trip to the grocery store. The “Interest and Fees” category is decreasing as my student loan winds down. December should be the last month with a value in this category unless I make any money management mistakes.
Expectations for December
The holiday season is here, and I have more gifts to buy. That will most likely be my main expense for December. It will probably not be my largest expense, however. I am faced with making decisions about charitable contributions this month, like I was at the same time last year. I don’t expect my alternative income to remain this high. In fact, December might be this year’s lowest month.
In December, I will continue my November Cash Experiment. For years I’ve been using credit cards for almost all expenses, earning cash back rebates along the way. The rebates are harder to earn now, and paying cash or using checks and debit cards might subconsciously encourage me to spend less. My progress in this experiment so far has been inconclusive, but it’s not a scientific experiment anyway. After another several months, I may have enough data to determine whether I should continue using cash or allow myself the conveniences of a credit card.