While September wasn’t as bountiful as August, I’m still adding to my bottom line. Even though my balance sheet showed a decline, it was mainly due to unrealized losses in investments, not a lack of income.

Each month, to accompany my balance sheet, I publish my income and expense report to keep myself motivated to make decent decisions about the management of my money. I’ve done a good job of using Consumerism Commentary to hold myself accountable. As my income increased, however, I’ve allowed myself more leeway while continuing to spend less than I earn.

Over the last few years, a larger percentage of my income has come due to the blog itself, a situation that was not originally part of the plan. To see my progress, continue reading this post. Click on the thumbnail for a larger version of the income statement. Read the rest of this article »

I mentioned in my August net worth report that there were three main reasons for my 7.7% increase. One reason was the stock market, which slightly lifted some of my investments. The other two reasons should be apparent from the income and expense report that is included in this post.

My net income for the month was $11,582. That’s the highest monthly amount on the bottom line I’ve ever had when not including realized gains. In fact, my August total beats my 2004 full year total. Continue reading for the full report and details. Click on the image for a larger version of the report.

I may have fallen back into old habits. Several years ago, when I was refreshing my life and beginning to control my finances, I made deep cuts into my expenses. I took on three roommates, paying only $325 a month for my portion of rent. I didn’t own a car and relied on mass transit for most of my transportation. When I did move out on my own, finding one of the least expensive apartments in town, I eliminated all but the most basic cable television.

There was more I could have done had I wanted to reduce my expenses, but I reached the point at which I was consistently investing and saving money every month.

As my income has grown over the past few years, I’ve allowed my expenses to follow. I moved into an apartment I actually like and feel comfortable spending some cash on unnecessary things I like, such as amateur coin collecting, amateur photography, and amateur high-definition entertainment enjoyment.

I’ve already thought of some ways to reduce my expenses by $10,000 a year. Consumer Reports has some suggestions for finding another $6,000 a year, but only a few apply to me. How about you?

Find cheaper auto insurance. I mentioned that several years ago I didn’t have a car. That wasn’t quite by choice; my license was suspended when I was younger for failure to pay speeding tickets. It would be easy to say that I received those tickets thanks to a stressful job working 100 hours a week and my failure to pay was because I had no money, but I should have been more responsible. Until I got rid of the car, my insurance was about $4,000 a year if I remember correctly. Now my insurance is about $1,500 a year, and I could only find that rate by shopping around for a while. It’s been several years since I’ve shopped around, so that’s something I will consider. I need to add renter’s insurance as well—something I’m sad to admit I’ve never had despite its reportedly low price.

Optimize your life insurance. Right now, my cat Rupert is the only living being that relies on my income to survive. I have not opted for life insurance yet as it will be generally unnecessary until I have a (human) family. According to Consumer Reports, insurance premiums have decreased on average, so it may be a good time to replace your policy with a new one. You may be able to get the same coverage for less.

Shop smart for food. Buying food for a single guy is not simple. Food is usually packaged for families. This means I usually end up spending more per meal and eating larger portions that I should be. I don’t enjoy spending time preparing and cooking dinner. I have accepted my failure at brown-bagging my lunch and moved on. Consumer Reports’ advice is tailored to a family, indicating on average an household could save $190 a month by shifting to less expensive food. My entire monthly grocery bill is about $190, though eating out (and ordering in) matches that.

Plan menus around sales on fresh poultry, fish, meat, dairy, and produce, and make use of leftovers. Avoid costly prepared meals. Eat more low-priced, high-nutrition foods such as beans and potatoes… Shop in lower-cost stores such as Aldi Foods, PriceRite, Costco, Trader Joe’s, Wal-Mart, and Sam’s Club, but be sure to compare prices. Try less-expensive store brands. Sign up for store discount cards. Stock up on sale-priced staples.

Stop paying bank fees. This is one of the most unnecessary expenses for just about everyone in the United States of America. There is rarely a reason that you should have to pay incidental or monthly fees for any basic banking service if you manage your money. Avoid overdraft fees or over-the-limit fees by being aware of your account balances. Avoid monthly or yearly maintenance fees by taking advantage of only free accounts—there are many to choose from if your bank insists on charging you a fee for your banking. Avoid cash withdrawal fees by using the right ATMs.

According to Consumer Reports, 52% of consumers don’t pay any bank fees, but the rest pay lots.

Optimize your telephone service. I don’t spend that much time on the phone. I could probably save a lot of money if I were to choose a prepaid cell phone plan. However, I chose a Blackberry plan with Verizon Wireless, which I use more for business, and I don’t intend on changing the plan.

I’ve helped other people look at their telephone usage habits and choosing a plan that better fits the amount of time they spend on the phone. On many plans, going over the allotted number of minutes can be very expensive. If you’re consistently exceeding your limit, you can save tons of money by switching plans.

Pay off your credit card. According to Consumerism Commentary, “On average, consumers who carry a balance owe $2,200, on which they pay 15.2 percent in annual interest charges.” Paying that much interest negates any progress you may be achieving with your savings or investments. To get rid of credit card debt, stop using the cards and then apply the Debt Avalanche.

It’s been several years since I’ve paid interest on a credit card, but I still pay about $30 a month on my student loan interest. I still have a student loan because several years ago, I applied some tuition reimbursement towards expenses rather than my loan. I probably should have done whatever possible to avoid that, but for whatever reason, it was the choice I made. At the time, the interest on the student loan was about 2% and I was earning more in my savings accounts, but that’s no longer the case. Therefore, I have been increasing my debt repayments every month this year, with the goal of vanquishing the remaining balance by the end of the year. If I decide that goal still makes sense, I’ll have to accelerate in order to achieve it.

According to Consumer Reports, the average family can save $500 by making the changes listed above. I have a feeling that many Consumerism Commentary readers are already optimized.

Cut your spending by $500 per month, Consumer Reports, August 2008 (subscription required)

My balance sheet provides a decent snapshot of my current financial state, but it doesn’t tell the complete story. While I have control over most of my investments and could sell poor performers and buy others if I so choose, I’d rather stick with what I have for the long term. Therefore, monthly swings in my balance are often due to forces beyond my control, like the health of the economy and the stock market.

That’s why I’ve been including an income statement each month. This report presents the details about the sources of my income and the destinations of my “outgo.” This was a successful month, netting $7,731 after expenses. For the year, I’ve managed to save almost $50,000. That includes money that I’ve invested as well as what I’ve deposited into savings accounts.

Here are the details. Click on the thumbnail for a larger version of the report. Read the rest of this article »

A recent Nielsen study revealed that almost two-thirds of consumers in the United States, many more than those surveyed just one year ago, have cut back their expenses, specifically due to escalating gas prices.

According to the study, which queried about 50,000 consumers during the first week of June, when regular gas averaged $3.98 per gallon, 78% of consumers are combining shopping trips, 52% are eating out less and 51% are staying at home more. Consumers are also clipping more coupons, doing more shopping at supercenters and buying less expensive brands, the survey found.

Over the past eight years, eerily coinciding with the time that those in the White House were individuals with very strong ties to oil companies and the energy industry, I’ve seen prices at the pump climb 300%. But unlike the majority surveyed, I can’t say that I’ve changed my spending pattern due to this incredible increase in price. I have changed a few habits to save money, like switching to generic brands for certain items, but I find I am spending significantly more in just about every category compared to my expenses in 2000.

I’ve never been much a coupon clipper. If a coupon happens to find its way to my line of sight, and it’s something I might need in the foreseeable future, I will clip it to my refrigerator door and I may remember to bring it with me on my next shopping trip. This hasn’t been changed by gas prices. I am not traveling less, either.

Have you changed any of your habits due to the increase in gas prices?

Gas prices have consumers cutting back – study, Associated Press, July 17, 2008.

In June I managed to save over $4,000 of my income for myself after all expenses were paid. That doesn’t mean that my net worth grew during June, however, as I explained earlier today. While I was able to add to my savings and investments, poor performance in the stock market caused my accounts to decline, which I hope is a temporary situation.

This post contains a look at my income and expenses for the month of June, though some lines are ignored to present a report that is a mix between an income statement and a cash flow report. I don’t bother with unrealized gains or losses here, but I don’t include money transferred to savings as an expense.

Continue reading this article to see my financial data for the month of June. Read the rest of this article »

Recently, JLP discovered that if he needed to, he could “find” an extra $13,000 per year by cutting back some of his discretionary expenses. By eliminating beer, soda, and a number of other unnecessary but nice expenditures, the savings can add up quickly. (I’m a bit surprised that JLP spends $50 per month on beer. But I’m not a beer drinker, so I’m unfamiliar with those types of expenses.)

My situation is similar. Once I was able to dig myself out of a hole and began earning income outside of my day job, I decided I should allow myself some of the more enjoyable aspects of life rather than wallow in extreme frugality.

But if I had to cut back, could I still do it?

Cable television and movies

I have a Netflix subscription I could cancel if necessary. In fact, I’ve considered getting rid of the service already, as I’m not an optimal user. My subscription was born while I was starting to earn more money but didn’t want to make the jump to another other than 13-channel cable television service. Netflix currently costs $15 per month, or a savings of $180 each year if I cancel.

I’m currently paying about $20 for an extended Comcast cable television service including all the standard channels plus an HBO package, the basic high-definition package, the sports high-definition package, and a digital video recorder. The $20 price includes the high-speed broadband internet connection, as well. I could drop HBO and the HD sports package to reduce this cost to $0, a yearly savings of $240. Even paying $0, I could still have my internet connection, which is important for continuing my extracurricular activities.

Meals and dining out

Based on my progress so far, I expect to spend about $1,400 dining out and ordering delivery from local restaurants. That includes off-campus lunch with my co-workers. I could shave this expense by making smarter choices at the groceries, forcing myself to cook, and motivating myself to bring in homemade lunches to the office. For a full year, I could probably save about $1,500 by cooking more and eating out less.

Communication

After purchasing a BlackBerry 8830 to keep me connected to the world when it’s probably inappropriate to be so, Verizon Wireless suggested the unlimited data plan for a total, including both voice and data, of $80 per month. This saves me from being charged per byte for every email or text message I transmit or receive and every web site I browse. Those charges would add up, but $80 per month isn’t slim, either.

I do not have a land line and I have no intention of getting one. I recently signed up for Skype so that can be used in some cases, but I believe I’ll need to keep a minimum cell phone if driven to extremes. I could choose a prepaid cell phone option and reduce my $80 per month expense to $20 every three months. If so, I could save $880 throughout the year.

Live entertainment

I spent over $200 at the Appel Farm Arts and Music Festival this past weekend, including admission, snacks, gifts, and tee-shirts which functioned well for a change of clothing when we were drenched in sweat. I’ve spent several hundred dollars on Broadway shows so far this year. I intend on seeing more concerts and shows this summer. I’ve also spent close to $200 on the “Goodbye Shea” package of 7 tickets to Mets games during the last season at Shea Stadium, with the first game scheduled for this upcoming Saturday. I expect I’ll spend more this summer on souvenirs and stadium food.

I see perhaps an average of one movie a month with my girlfriend, though that may be overestimating. We aim for matinées but they’re not discounted much.

Let’s just estimate that I could probably save about $2,200 throughout the entire year by cutting out my live entertainment expenses, including related travel.

Vacation

I haven’t purchased my tickets yet, but I plan to visit my family in California for Thanksgiving again this year. The flight will likely cost around $600. My girlfriend and I haven’t solidified details surrounding our summer vacation yet, either, but I would expect what we decide may cost from $600 to $1,000. Add in my spring visit to the west coast, and we can estimate $2,000 spent on vacations per year.

The little things

I buy books, music, and videos (DVDs, Blu-Ray discs, etc.) to enjoy. I also slowly work on a coin collection which involves purchasing new releases from the U.S. Mint and perhaps some coins from shows or eBay. I purchase miscellaneous electronic equipment and gadgets occasionally, such as last year’s TomTom GPS device, last year’s Sharp Aquos HDTV and last year’s now-extinct HD DVD player.

While I haven’t spent as much this year, I could see looking for a new computer by the end of the year. Let’s say I could save about $3,000 a year by cutting all of this out of my life for a while.

$10,000 may not be enough if I’m faced with a crisis. I’m glad I have a healthy emergency fund which can help me recover. I intend on reducing expenses when possible before tapping the emergency savings accounts, however.

What would you do to find an extra $10,000 or more over the course of a year?

I ended May 2008 by spending $9,943 less than I earned, though I had some help from a $600 tax rebate and an incoming payment for a long-term advertising deal (which already finished its run).

In this post, I’ll take a look at my income and expenses for May to determine whether there are some opportunities for me to earn more and spend less. This report makes sense when viewed in conjunction with May’s balance sheet which shows my account balances and net worth as of May 31, 2008.

Keep reading to see the chart and explanations. Read the rest of this article »