Monday, January 14, 2013

2012 Income Analysis

It is kind of a pain to update my budgeting at the end of the year for some of the small stuff that I don't normally input into my little app like dividends I receive throughout the year but I do learn more about what happens to my money.  I have a DRIP (dividend reinvestment plan) set up so that dividends are automatically reinvested in that stock.  Some of the companies I own stock in are overseas and there are some ADR fees charged when it is reinvested.  I will have to look into it more, but I probably wouldn't have noticed had I not told myself to update my budget to get this post up.  Again we will have a lot of charts to look at.  This post will focus on my overall budget and the income side.  I should have the expenses up by next week.

The main takeaway from the top chart was that 2012 was a much more volatile year for my net income compared to 2011.  This was due to increased volatility in both my earnings and expenses.  The standard deviation of my monthly income and expenses were roughly equal to the average (and net income had a standard deviation twice as large as the average, and I did have a few months in the red).  My income had a much bigger effect however since I both earned more money during the summer from my internship and less money during the school year because I dropped a job I had all of 2011.  This had a pretty large effect in early 2012 and you can see it in the following year-to-date chart of my net income.

I was in the red for a while until April when I began to break even for the year by earning more than I spent.  Then came the summer when I was able to come back and make some more progress on increasing that gap.  I can identify some points of interest already with this chart even though it is more prominent the deeper you look into it.  For example, I have the deposit on my summer housing made in March which makes that little dip for the month.  Now let's take a look at the income side alone.

From this chart, you can see that my income for 2012 actually tracks 2011 pretty closely.  This means that the big discrepancy in net income comes from spending much more than before early in the year.  The slope becomes much steeper in the summer when I have my internship before leveling off to my normal earning schedule during the school year.  On the income side, I kept my split between work income, lab income, and dividend/interest income.

I didn't bother to make just a monthly income chart since it mirrors my monthly work income chart pretty closely.  I've already mentioned most of the effects which you can see from the chart such as my higher summer income and lower school year income.  You can also see how large the spikes are month to month since my internship isn't very long.

I found this chart quite amusing since 2012 tracked 2011 pretty closely.  You can see that I had no labs during the summer since I wasn't on campus for both years.  The only other notable discrepancy is in December which is mainly due to a 3 month long experiment I participated in which paid off completely at the end of the year.  This category is going to drop to 0 starting this year since I won't have the opportunities to participate in them anymore (at least the ones at my school).

Finally, the dividends and interest I received in 2012 were consistently higher than in 2011.  This shows how I have put the net income to work.  The spikes in June and December are due to some index funds that I own which pay out dividends semi-annually (rather than quarterly like most dividend paying stocks).

Overall, these charts can help me think through how my financial situation looks for the coming year and how well I was able to keep the money I earned in 2012 compared to 2011.  I can spot interesting trends and ask myself questions about why the numbers come out the way they do.  Of course, I think the expense side is probably much more interesting which will be coming out in the next post.

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