August was a super busy month for our family. Instead of being busy as a family like we were all summer, now everyone is busy going their own direction. We are now in a really good routine.
We’re one step closer to having solar installed. The trenching and hole-digging is done. The pallet full of panels has arrive. It will just be another couple of weeks before a crew does the install and then a bit after that to get hooked up to the grid and have the final inspection. With the cost of power going through the roof, this can’t happen soon enough!
Let’s take a look at our numbers for August. As always, feel free to ask if there’s anything that doesn’t make sense or you would like me to clarify.
Income Earned in AUGUST – $10,973
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 August, which has all been set aside to use in our September budget. The spending section below shows the money we earned in July and spent in August.
Attorney Income – $8,698 Mike works as an attorney for the state of California. This is his take-home pay after taxes, social security, pension contribution, and health insurance premiums. It also includes a small “work-at-home” stipend that he started getting from the state.
Rental Income – $2,274 We rent out a one-bedroom apartment on our property. Our long-term renter moved out in June, so we’re back to Airbnb. If you’re thinking about renting out your space on Airbnb, check out Mike’s post about dealing with insurance for your Airbnb rental or our explanation of how we handle our Airbnb finances.
Spending in August
Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in July.
Tithing – $1,137 We always pay a 10% tithe on our income. This tithing, like all of our August spending, comes from the money we earned in July. 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 program that provides assistance for local folks who need it.
Mortgage – $2,380 We have a 15-year mortgage on our house. If you’re interested in the details of our Dec 2020 refi, you can check out all of the numbers and details.
Electricity – $457 This bill covers both our home and our rental which are both completely electric. That will be great once we have our solar installed, but right now the price of electricity keeps going up and up.
Car Insurance – $101 Our 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 – $185 Our bill comes every other month so we try to set aside about half of what we anticipate the bill to be.
Garbage- $46 The bill for our curbside trash pickup also comes every other month so we set aside half of the bill each month. Our rates increased $4/month.
Cell Phones – $130 We have three cell phones: one for me, one for Mike, and one we use as a home phone for when the kids are home without us (or that the older kids take when they babysit or work at someone else’s house). They are all through Visible. Visible is a Verizon subsidiary that offers wifi calling and unlimited cell calls and data on the Verizon network. We’ve been using them for over two years now and have no complaints at all. It is $25 per phone, but right now you can get the first month for just $5 through my link.
Music Lessons – $0 We paused music lessons again because of an extremely busy schedule.
Food – $529 Our garden is giving us lots of tomatoes, cucumbers, beans, squash, and watermelons. We plan to eat a lot from the garden in September as well.
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Fuel – $593 Gas is down compared to last month. It’s around $4.60 at the cheapest station right now.
Household Misc – $373 We had various household expenses come up this month. We also replaced one of our couches with a nice secondhand one I found. We also pay monthly for a Scribd subscription because we love the unlimited access to so many audiobooks.
Clothing – $298 – We did some back-to-school shopping and got some (expensive) running shoes for our high schooler who is running cross country.
Animals – $122 We bought 2 bags of dog food and some supplies for our fish tank
Allowances – $84 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.
School – $224 Our oldest is doing marching band and had some fees related to uniforms.
For most of our budget categories, we zero out what is left at the end of the month and send it to whatever our big financial goal is at the time, 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 $0 in August. Current category balance is $1,731.
Car Maintenance – $0 added. We spent $0 on car maintenance. Current category balance is $2,867.
Christmas – $0 added. We didn’t spend anything for Christmas 2022. Current category balance is $1,238.
Disability Insurance- $190 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. Current category balance is $914.
Life Insurance – $75 added. Next year’s life insurance premiums will be due in November. Current category balance is $704.
Birthdays & Gifts – $0 added. We spent $0 in August. Current category balance is $180.
Car Registration & Smog – $40 added. We spent $40 renewing my driver’s license. That’s not really what this fund is for, but since it’s at the DMV, I stuck it in this category. Current category balance is $100.
Family Fun Fund – $300 added. We paid for a family sports pass for that our family can attend all of the games. Current category balance is $717.
Home Projects- $0 added. We actually didn’t spend any in this category even though Mike did do some projects around the house. The category balance is currently $170.
Garden & Orchard- $0 added. We didn’t spend anything in August. The category balance is currently $112.
Homeschool – $0 I turned this into a sinking fund. We spent $16 from money that was leftover in this category, but didn’t put any funds from this month’s budget into the homeschool category. Current category balance is $90.
Kids’ 529s – $150 We know that $25 per kid per month invested for college isn’t much, but college costs are not our highest concern. Scholarships, grants, loans, and jobs during school worked for us. We may accelerate this savings later, but we’re ok with small, consistent payments right now. The kids like to see their balances growing, and it adds up and teaches them good savings principles, even if it won’t entirely pay for school. 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 the year. Mike has about $950 each month deducted directly from his paycheck into a pension fund.
We are pausing our mortgage payoff goal for the next two years to tackle a new goal. Mike and I shared all the details here about why we are getting solar, how much it costs, and how we’re planning to pay for it here in this post.
We started making payments on the $50,000 loan in April. Our payments are $1,502 per month.
We also have another $20,000 that will be due by the time everything is done. The total cost of getting solar is $70,000 (plus about $3,000 of interest on the $50K loan if we pay it off in 2 years).
Our contribution to our solar goal in August was $4,004.
That brings the total we’ve saved toward paying for solar to $20,528.
The way we have it set up in our budget is kind of like a sinking fund. We put money into our “solar” category each month, some months it is a lot, some months it is a little. There is an automatic payment of $1,502 toward the solar loan each month that comes out of that budget category. At the end of August the “Solar” category balance was $6,268. In addition to paying the solar loan, the balance in our solar category will goes toward the additional $20,000 over the $50,000 loan. They took care of the trenching in August, so hopefully everything will be installed by the end of September!
I made a chart to keep track of our progress. I color in a little square for each $250 we put toward our solar purchase.
How About You?
- How did your budget and/or debt repayment go in August?
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