Real Family Budget Update

Regular life has been so full lately that I’m a little late reporting our budget update for March.

Between working on our garden and orchard, homeschooling the four older kids while taking care of the two littles, and helping the kids with a major entrepreneurial endeavor, I haven’t spent much time around the blog.

But even when I’m late reporting our numbers here, you can rest assured that we are still keeping up with our budget in real time.

Over the years managing our money has become a strong habit. We look forward to having an informal budget meeting each month to talk about our progress toward our goals and make plans for our money.

For us, budgeting isn’t restrictive. We can spend on the things that are important to us without feely guilty or stressed. We just decide at the same time not to spend on things that aren’t important to us.

Okay! Let’s talk about what happened in March!

Income Earned (& Received) in March – $26,743

We live on last month’s income. If that doesn’t mean anything to you, check out the video explaining how living on last month’s income changed our lives or the post explaining how we got to that point.

This income section shows the money we earned in March, which has all been set aside to use in our April budget. The spending section below shows the money we earned in February and spent in March.

Attorney Income – $6,917 Mike works as an attorney for the state of California. This is his take-home pay after taxes, social security, and health insurance premiums. He’s still working with a temporary 10% pay cut, like all California state employees, because of expected budget shortfalls related to the pandemic.

Blog Income – $0 – I actually didn’t take a paycheck from my blog in March. Since we had so much money coming from other places (see below), I decided to re-invest what I would normally pay myself back into my business.

Rental Income – $1,000 We rent the one-bedroom apartment on our property. We had it listed on Airbnb for the last few years, but have a long-term renter now instead. Though we don’t earn as much as we did with Airbnb, there are some big perks. We don’t have to clean and do a full covid-disinfect and airing of the apartment between stays, for one. We expect that we’ll go back to Airbnb after our current renter moves out. If you’re thinking about renting out your space, check out Mike’s post about dealing with insurance for your Airbnb rental or our explanation of how we handle our Airbnb finances.

Covid Stimulus – $11,200 As a family of 8 making a combined income of less than $160,000, we qualified for the third Covid stimulus check.

Income Tax Refund – $7,626 We overpaid in taxes last year, so we got a refund. Mike is changing his withholding at work so hopefully that won’t happen next year.

Spending in March

Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in February.

Giving

Tithing – $1,055 We always pay a 10% tithe on our income. This tithing (like all of our March spending) comes from the money we earned in February. You can read our thoughts on paying a 10% tithe here.

Fast Offering – $100 Each month we take one day to fast (go without food and drink) for two meals and contribute to a charity program that helps provide for the local poor.

Monthly Bills

Mortgage – $2,369 We re-financed our 15-year mortgage in December 2020 so this is our current monthly payment. Mike shared all of the numbers and re-fi details here.

Electricity – $311 Our electric bill covers both our home and our rental. Both are completely electric, with no gas or propane.

Car Insurance – $135 Our auto insurance is through USAA and we love them! If you, your parent, or your spouse were/are in the military, you’re probably eligible for USAA too!

Internet – $70 Having good internet access is super important with everyone at home for work and school. We’re so glad we invested in bringing internet access to our property when we first bought our house. That $5,000 investment was worth every penny!

Water – $0 This bill comes every other month, so each month we put approximately half of what we expect the bill to be. Our bill is lower now, so we actually had enough set aside the month before and didn’t have to put anymore toward the bill in March.

Cell Phones – $50 We have two phones with Visible, a Verizon subsidiary that offers wifi calling and unlimited cell calls and data on the Verizon 4G LTE network, each for $25 a month! This isn’t the very cheapest cell phone option out there, but the Verizon 4G network is the only network with any signal at our house, and we’re at our house pretty much all the time now.

We used to use Republic Wireless, which costs less, and some readers rave about Mint Mobile’s great service and even lower costs, but neither of those use a network that provides signal at our house.

If you’re paying more than you want for cell service, check out one of these three great and affordable companies: Visible, Republic Wireless, Mint Mobile.

Orthodontist – $61 Since our oldest gets her braces adjusted every other month, we’re treating this as a monthly bill rather than paying it all up front. These payments will last through the end of this year.

Disability Insurance- $151 This will replace about 2/3 of Mike’s current income if injury or illness leaves him unable to work as an attorney. Our income potential is our greatest financial asset right now and disability insurance helps us protect it.

Piano – $120 Our oldest takes piano lessons. The younger kids are still learning off and on with mom.

Everyday Expenses

Food – $529 We had a pretty typical month for grocery spending. If you want to learn exactly how we keep our family’s grocery spending low and consistently stick to our budget, you’ll want to get on the waiting list for Grocery Budget Hero, the online course where I teach all of my grocery strategies. It will be opening up again soon!

Fuel – $182 With Mike not commuting and the kids not in school or any activities, we don’t do much driving these days, but we did take one little trip at the end of the month.

Household Misc – $189 We bought a bookshelf at the thrift store to hold our ever-growing collection of wonderful literature, history, and children’s books. We had an order with Grove for cleaning supplies and stocking up on our fav mosquito spray (’tis the season). Mike bought some chainsaw supplies and we got normal toiletries and household supplies.

Clothing – $89 – We found new tennis shoes for a couple of the kids.

Animals – $38 We picked up dog food and chicken feed.

Allowances – $70 Because our allowance system is age-based, we increase this monthly amount as kids have birthdays. We give our kids “practice money” as a weekly allowance. You can read all about why we decided to pay our kids allowance that’s not directly tied to chores, as well as all the details of when and how much in this blog post.

Sinking Funds

For most of our budget categories, we zero out what is left at the end of the month and send it to our mortgage payoff goal, but in our sinking funds we set aside money each month for periodic expenses and let it build up until we need it.

The amount in bold is the amount we added to the fund this month. Any spending is noted in the comments along with the current balance of each fund.

We do not have separate bank accounts for these funds. All of the money sits in our checking account. We’re not worried about getting the money mixed up because we spend according to our budget category balances, not our checking account balance. We seriously never even look at our checking account balance unless we’re reconciling the account. We track our budget categories and spending in YNAB.

Medical/Dental – $400 added. We spent $317 on dental expenses. Current category balance is $1,128.

Car Maintenance – $0 added. We decided to stop putting money toward this category for now. We have a nice balance and we’re driving rarely, so we don’t have a lot of maintenance to do. We did spend $53 on an oil change. Current category balance is $3,920.

Christmas – $100 added. We didn’t make any purchases for Christmas 2021 in March. Current category balance is $262.

Life Insurance – $75 added. We add $75 per month here and then we have what we need for our life insurance premiums, which will be due next November. Current category balance is $375.

Birthdays & Gifts – $40 added. We didn’t spend anything on gifts in March. Current category balance is $223.

Car Registration & Smog – $0 added. We aren’t adding to this category for now. Current category balance is $333.

Family Fun Fund – $0 added. We didn’t add to or spend from this category in March, but we’ll start adding to it again soon to plan for some summer adventures. Current category balance is $0.

Preparedness – $0 added. I didn’t do any extra emergency preparations in March. Current category balance is $314.

Home Projects- $200 added. We didn’t spend anything on home projects in March. The category balance is currently $624.

Garden & Orchard- $500 added. We spent $386 in March on supplies for garden irrigation. We know April will include some fencing costs for the orchard, so we’ll be eating into our balance here soon. The category balance is currently $1,515.

Investing

Kids’ 529s – $125 We know that $25 per kid per month invested for college isn’t much, but we’re not super concerned about college costs. Scholarships, grants, loans, and jobs during school worked for us. We may accelerate this savings later, but it’s not our highest priority now. You can read about our decision to start saving a little for college in this post.

IRA (Steph) – $500 With $500 monthly, I’ll max out my $6,000 IRA contribution for 2020. Mike has about $800 each month deducted directly from his paycheck into a pension fund.

Mortgage Payoff Goal Progress

Our big financial goal right now is paying off our mortgage. At the end of 2018 we made a goal to pay it off in 5 years. We just finished up the second year of working on this goal. You can read about our mortgage-payoff goal here and see the numbers for our most recent re-fi here.

We paid $1,271 of principal in our normal March mortgage payment, and we didn’t put any extra toward the principal this month because we’re still trying to decide about possibly pausing this goal to put in solar. We did set aside $1,541 to be put toward one or the other.

Current balance: $261,474

For reference:

Original balance of 15-year mortgage: $372,700
Balance at start of 5-year goal (Nov 2018): $363,171

Percent of 5-year goal reached: 28%
Percent of 5-year time elapsed (29 mo): 48.3%. Yep, we’re behind. It would take about $5,700 in mortgage extra each month for the next three years to meet this goal. We’re considering whether we want to push hard for this or adjust our goal.

You can get this hand-drawn brick house printable progress chart here. I love that it has LOTS of spaces (365 in total) so that we can color it in often and celebrate our progress! It would work great for paying off your mortgage OR saving for a down payment.