Expenses For June 2018

Time to open up the books on how much money I spent last month.

Managing expenses is absolutely critical to becoming financial independent at a young age. In fact, I’d argue it’s much more important to be an excellent saver than an excellent investor in this regard.

And in order to save, you must limit expenses. Making more money is great, but not locking down the appropriate lifestyle first by adopting a scarcity mindset will almost surely simply result in lifestyle inflation.

Someone earning $100,000 per year but spending $90,000 per year will probably never retire (and certainly not early), but someone earning $40,000 annually and spending just $20,000 of it per year will become financially independent in a reasonable amount of time (likely within a decade or so).

I consistently saved well over 50% of my net income in order to go from below broke in 2010 to financially independent in 2016. In fact, I was routinely hitting monthly savings marks above 70%.

And I was working a regular, middle-class job during much of that period.

Everything was hinged upon my ability to live below my means, enjoy most elements of frugality and minimalism, and totally believe in a future me who was already financially independent and taking advantage of that freedom.

While I no longer have to, or even really attempt to, maintain a high savings rate, keeping my expenses low is still vital to maintaining my financial freedom.

You can’t get to a point to where your passive income starts to cover expenses, then just ramp up spending. You have to more or less maintain the same lifestyle that got you there.

That all said, I could technically spend much more than I do.

My basic expenses in life are covered by passive income.

I earn five-figure and growing dividend income from my FIRE Fund.

And I have passive online income like royalties from my two best-selling books: The Dividend Mantra Way and 5 Steps To Retire In 5 Years (also available in paperback).

All in, passive income is north of $1,300 per month – and growing.

But I also earn a rather significant amount of active income from my ongoing writing and coaching efforts.

As such, the early retirement math has been rendered moot for me (as it will be for almost anyone chasing after financial freedom).

However, I don’t ever want to regularly rely on that active income.

If I were to rely on it, I wouldn’t be financially independent any longer. In addition, relying on that income would likely negate a lot of the enjoyment I get out of writing, turning work into a job.

I may sometimes use some of that excess income for travel or other extraordinary personal spending, but this is a complementary and voluntary addition to my regular, everyday life which is underpinned by passive income.

Moreover, my everyday life is fun, free, and functional. It’s completely delightful. It’s customized for me and by me. There’s no sacrifice. I don’t ever wake up and feel like I’d be much happier if I spent a lot more money. That’s not how happiness works.

While my ability to live on relatively little and be very happy and fulfilled has been built on an overall life philosophy, that ability has been further bolstered in a major way by relocating to Chiang Mai, Thailand indefinitely as a dividend expat.

Because the cost structure here is so much lower than what exists in the US, I don’t have to watch and stress over every penny in order to get my spending down to a level that’s roughly in line with my passive income.

If anything, I spend exactly zero effort in managing my expenses these days. The “effort” has been replaced by a structural realignment of expectations and beliefs, along with a major move abroad that takes advantage of geographic arbitrage.

With that introduction out of the way, let’s get into my real-life spending for June 2018…

Rent & Utilities	$500
Food	$336
Health/Personal/Toiletries	$111
Coffee Shops	$106
Amusement	$92
Gifts	$37
Gym	$29
Transportation	$19
Mobile Phone	$16
Everything Else*	$8
Total:	1,249

To track and manage your expenses, I recommend Personal Capital and Mint.

*Everything Else includes expenses that I don’t have a regular budget for. I had to purchase yet another umbrella. Left my last one in a Grab car. I’m getting pretty good at losing umbrellas!

Rent came in a little lower than last month’s high-water mark. I used the air conditioning much less. And the exchange rate seems to have bounced back toward my favor.

I was surprised to see food come in so low. That’s definitely the least I’ve spent since living here on food. It’s weird because our habits haven’t changed. We’re still eating out for every meal. And it’s not like I’ve been looking at the prices on menus or anything. I guess we just happened to eat out at more local markets during June (rather than restaurants).

To spend that little on food for two people, eating out of the house for every meal, is pretty awesome.

However, I do only eat two meals per day. And I only eat from 12:00 to 8:00 p.m. as part of my intermittent fasting.

The spending on coffee came in high. My significant other, Oh, was with me quite often during the month of June. She would hang out with me at the coffee shop, reading, checking her phone, and chatting with me. The company is nice. But that obviously increases my spending on that category, especially considering that she likes to split a snack (like cake or a muffin) while we’re there (and I’m not one to argue about that).

I would say the rest of the spending was more or less within expectations.

Spending on amusement was perhaps a bit more than I thought it would be. What can I say? We enjoyed ourselves.

The overall spending for this month, coming in at a hair under $1,250, was fabulous.

If I can spend $1,200 or so on this kind of life, for two people, I’m astounded and very happy.

Everything we did was out of consideration of happiness. There isn’t ever a time when I do something (or don’t do something) based on money or cost. I’m free from money itself these days. It’s such a clear and open way to live. I’m very fortunate, guys.

I’ll quickly point out that there’s no visa expense in this report. That’s because I’m staying in Thailand on a one-year ED visa, which was settled earlier this year. As such, there’s very little ongoing costs to maintaining that. But I think you could go ahead and add $100 or so (based on the visa costs stretched out over a year) to the above expenses to get a full look at what life is costing me here.

And, of course, this factors out any outgoings that wouldn’t exist if I didn’t have an online business (business expenses, business taxes, philanthropy, student loans, etc.).

This level of spending is a comfortable base for me. I suspect that I’ll be more or less in this range of spending most months, outside of occasional travel and the annual visa concerns. I could spend less (especially on housing), but I have no desire or need to. I could also spend quite a bit more, but I equally lack that desire and need.

How was your spending for June? Did you meet your expectations? Why or why not? 

Thanks for reading.

Image courtesy of: Stuart Miles at FreeDigitalPhotos.net.

P.S. If you’re interested in becoming financially independent at a young age, which will involve controlling expenses, check out some amazing resources that personally helped me become financially free at 33.