Each month, I’ll be posting our budget as well as the income we receive from our investments. Investment income includes dividends, interest, and rent payments(if any). This has to be one of the toughest aspects of being financially transparent. It shows whether we really practice what we preach about being faithful stewards, or if we are squandering the resources God has given us. It’s a little frightening to be honest, and can be a little disheartening. Being put under a microscope is never easy, especially if you think you’re the one holding the microscope. The truth is, God already knows whether we have been good stewards or haven’t, and His grace can even forgive our lack of stewardship. It also helps to keep us in check, as far as keeping our expenses low since we will be posting how much we spend each month, but it also helps us remember a couple of things:
1. Everything we have is the Lord’s, and he has graciously given us the abilities we have to earn and be good stewards.
2. Our identity isn’t found in our possessions or lack of possessions, so we shouldn’t be afraid of posting either.
3. Our motivation isn’t to boast, and yes, it is possible to boast about not having or shunning possessions. Since everything we posses is only “ours” for a time, the stewardship of what we have is what’s most important. Our faithful stewardship is still attributed to God, because He is the one molding us, strengthening us, and our faithfulness is a gift from him anyway! All the glory belongs to him from start to finish.
Ok let’s get started:
October was small improvement from the month before. At this time, I’m currently transitioning from one job to another, so our income was significantly lower. You can also see that our budgeted expenses were a little higher than last month, but we're still spending more than the income that we generated. We definitely need to improve our budget so that our expenses fall far below our income. What has helped us, or rather kept us from being better stewards, was the fact that we would still have enough income at the end of the month to carry over to the next month. So although our income wasn’t high, we had some left over savings that we used to cover our expenses. Hopefully we won’t have to withdraw from our savings account in order to cover our budget in the future. Last month we were under our budget by $424, and this month we spent $4,557 and were under our budget by $564 when excluding amounts put into savings and investments. This month wasn't filled with generous giving, and for that reason, we dropped the ball this month. The whole point of budgeting and improving our financial stability is to give more generously. If we are hoarding our money for the sole purpose of having it, then we've completely missed the point of biblical stewardship.
One of the reasons why we weren't generous is because we literally ate our giving budget. We spent $337 eating out, which is a habit I hope we don't repeat. Certain categories like eating out could definitely be cut down, especially those pesky $10 lunches that seem harmless at first. They truly do add up! I really don't want to get into the habit of not tithing and instead being selfish with what God has blessed us with. On the bright side, this month was the last time we had to pay out of pocket for this semester's tuition costs. Moving forward, we definitely need to cut back on our variable expenses like eating out and our car usage.
Now that we’ve got the painful and hard part out of the way, let’s look at our investment income as well as our savings rate. Our long term goal is to have enough income from our investments so that we can both quit our jobs and use our time more wisely and with more purpose than simply collecting a paycheck. Not saying that work is wrong, or that being an employee is unfruitful, we would just rather use our time in other ways. In order to get to that point, we need to save. Increasing our savings rate will increase the amount we can use to invest which will increase our investment income.
For the month of October, our investment income was(DRUMROLL PLEASE)…
Which isn’t much now, but since this portion of our portfolio is $2,745, our annualized return is 20.3%, which is really good. 97% of the income came from interest in our lending club account, so we will definitely keep adding to that account as well as our dividend portfolio. The price of the stocks in our dividend portfolio declined, resulting in a 4.29% decline, but we don’t plan on selling these stocks so this isn’t too big of a deal as long as we can keep collecting the dividend checks. Hopefully next month we can add money into each of these accounts in order to generate more monthly income.
Our savings rate this month was a little lower this month at 17.5%, from last month’s rate of 19.1%. This is the amount we deposit into our retirement, emergency fund, savings, and investment accounts. This is different from the amount of money that is carried over into the next month. These are deliberate deposits into these accounts in order to plan for future events. Debt has been a major hindrance to our ability to save, as well as poor budget management and stewardship, but we are growing, learning and improving. This month was a bad combination of lower giving and lower saving. Although we were able to improve our net worth, we've completely missed the point of biblical stewardship if we aren't using what we have been given to bless others. This was such a difficult task, but I do think it can continue to be very fruitful. Hopefully next month we continue to be better stewards of what God has given us. I hope that you’ll be challenged to do the same!