If you read our last post describing our "net worth", you may have noticed that while our assets/liabilities ratio is pretty decent, I believe we have a problem with cash flow.
Here are the numbers, (AFTER TAX dollars):
1. Monthly income from Grump's job - appox. $4,400 .
Grump takes home $1,900 every two weeks, (he's paid bi-weekly), plus he usually gets a yearly bonus of $4,000. $3,800 + $300 ( $1,900 / 6 ) + $300 ( $4,000 / 12) = $4,400 .
2. Monthly rental income - $500 .
We get about $600/month rental income, but if you're a landlord, you need to factor in some vacancy. I assume two months of no rents, so $600 / 12 = $500 .
3. Income Tax Return and Misc., (selling stuff, gifts) - $400.
TOTAL AVERAGE MONTHLY INCOME: $5,300.
That sure seems like a lot, huh? Understand first of all that there are five of us living here, and this income stream is not consistent. (Some months are very lean!)
Now let's look at our monthly expenses:
1. House Mortgage - $530.
2. Condo Mortgage - $400 .
3. Condo Association fee - $210 .
4. Weekly Food/Shopping Expense - $800 .
5. Money to the folks back home in the Philippines - $200 .
6. Car payment - $400.
7. Dental nonsense, (stupid teeth) - $80.
8. Eating out, (I know, I know - Dave Ramsey would be VERY disappointed with us!) - $400 .
9. Clothing, (mostly kids) - $50.
10. Charity, (woefully inadequate amount, by the way!) - $100.
11. Doctor's visits and medicine - $100 .
12. Gas and Car repair/maintenance - $150.
13. Furniture and home decor - $200.
14. Miscellaneous entertainment - $200.
15. Not sure what to call this without irritating my wife and Lola. How about "the sister" fund? (DON'T ASK!!) - $150.
16. Diapers, wipes, baby food, breast feeding pads, tissue, paper towels, and some specialty food stuff not included in #4 above - $300.
17. Condo maintenance - $80.
18. House maintenance - $120.
I come up with an expense total of $4,470. Now I'm sure there's an expense or two I've forgotten and/or underestimated, so how about we round this up to $4,500.
Note that, just like income, expenses aren't necessarily fixed, and vary from month to month, with the big nasty expenses inevitably falling from the sky onto our heads in the very months we have less income. The universe just works like that!
TOTAL AVERAGE MONTHLY EXPENSE: $4,500.
(10/Feb/2015 update: the monthly expense figure is actually WRONG, because I somehow forgot to include all our average monthly utility costs. The true figure, as shown in part two of this tragedy, is more like $5,200.)
Darn, Dude! $4,500 is less than $5,300. So what's the problem?
Well, the problem is that, as I stated above, our monthly income is NOT consistent. In fact some months last year we received less than $4,400. (For two months after our tenant moved out.) We also got hit with a TON of expenses at the same time, so we had to put some expenses on our credit card which we are still paying off.
March tends to be a GREAT month for us, as due to various factors we get flush with cash for brief time. This causes another problem: for the last two years Old Grump has gotten excited with all the money and put large extra principle payments on our mortgages, which means when the lean months roll around, we don't have the cash saved to cover our costs.
So really it all boils down to our inability to come up with a budget to control our fluctuating expenses based on our fluctuating income. Sloppiness and laziness, really, and we should be ashamed of ourselves!
Our goal this year is, once we finally knock off the silly Amex card debt, to STAY OUT OF DEBT FOR THE REST OF THE YEAR!! Can we do it? Do we really have the discipline?
I hope so, but to date our behavior has been the opposite. Wish us luck!