Every month we share a budget update where we go through our income, spending, saving, and goals. Having this accountability helps keep us on track. Hopefully it helps you to see a real example of how one regular family manages their money.
Of course your budget won’t look like ours and that is perfectly fine. Your budget shouldn’t look like ours! A budget is personal, so it should reflect your own priorities, needs, and goals. You tell your money what you want it to do.
We budget using money we earned last month. If the concept of being a month ahead of your expenses is new to you, check out my recent YouTube video here or this new blog post. We’ve been budgeting this way for years and absolutely love it!
If you would rather watch or listen to a walk-through of our budget than read all of the numbers, you can do that too!
Before I get into our numbers I want to remind you to report your August progress in our community Debt Smash-athon by September 10th! As soon as you finish reading here, go to the August Debt Smash-athon reporting form to let us know how you did. You’ll get entered for the monthly prize!
Remember, for the Debt Smash-athon we’re counting your debt paid, your contributions toward retirement, and/or your saving for a big goal! Please report even if you don’t feel like the month was a big financial success. I think it’s important to have a real reflection of our good and our bad months, not just of all the people who are rocked it this month.
I’ll summarize our progress as a group and post it here when I get all of the submissions in. If you’re not already receiving Debt Smash-athon updates, sign up here.
—On to the numbers!—
Income Earned In August – $8,930
We live on last month’s income. If that doesn’t mean anything to you, check out the new video explaining how this changed our lives or the new post explaining how we got to that point. This post 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 $6,122 – Mike works as an attorney for the state of California. This is his take-home pay after taxes, social security, health insurance premiums, union dues, and parking fees are taken out.
Blogging Income $1,000 – I’m thankful to be still making some money from my blog, even though it has been on the back burner for a long time. All that work that I put in back in the early years is still paying off. I still have no idea how I kept up with schedule of 3 posts per week for the first 3+ years of blogging, but those posts are still bringing me most of my visitors.
Airbnb Income $1,808 – Once again we had our highest Airbnb income so far, topping July! If you’re thinking about renting out your space, check out the details about our Airbnb start up costs to give yourself an idea of what to expect. You can also see a recent 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 – $987 We always pay a 10% tithe on our income. This tithing (like all of our August spending) comes from the money we earned in June, which was way higher than normal. You can read about why we continued paying a 10% tithe even when we were in debt.
Fast Offering – $80 Each month we take one day to fast (go without food and drink) for two meals and make a donation to help the poor in our area.
Mortgage – $3,454 Our mortgage payment includes homeowners insurance, property taxes, and a small amount of PMI. We have a 15-year mortgage, but our big goal is to pay it off in 5, though we are falling behind, as you’ll see in the goal section down below. If you’re a numbers person, or are looking at mortgages yourself, Mike answers a series of questions about how and why we refinanced, including all the numbers involved in the decision.
Electricity – $351 This bill covered the electricity used in July. Our house and our rental, which is on the same meter are completely electric– no natural gas or propane. We barely use the air conditioning in our house and we’re careful with our other electric use, but the rates are high here, especially during the summer, and with people in our Airbnb apartment almost every day, usage goes up a little too.
Car Insurance – $239 Our insurance is higher than normal because we still have three cars insured instead of two. We were hoping to be back down to two vehicles soon, but the Odyssey needed to go to the shop so we kept our old van around. We have been so impressed with the service and coverage that USAA provides as both a bank and an insurance company. We’re able to join USAA because my father-in-law was in the service years ago. If you, your parent, or your spouse were/are in the military, you’re probably eligible for USAA too!
Internet – $65 We still remember what life was like when we moved into our new house and it took six months (and $5,000) to get internet access. We are so grateful to have an internet connection right here in the comfort of our home.
Water – $55 Our water bill comes every other month and varies, but we try to set aside half of what we expect the bill to be. Last month the bill was higher, so we increased our monthly allocation slightly.
Trash – $40 Our garbage collection bill comes every other month, so we set aside half each month. The rate went up to $75 for two months, so we had to make up for the difference in August.
Cell Phone (Steph) – $22 Republic Wireless offers a unlimited calls and texts and 1 GB of cell data for $20/month with no contract. Mike and I each have a Republic Wireless phone, but his is a business expense, so never shows up here. The nice thing about Republic Wireless is that any time you’re in wifi range, the phone uses wifi for both calls and data, so we rarely get close to the 1GB data limit.
Another great option for affordable cell phones is Mint Mobile, especially if you want to bring your own phone. I’ve had readers rave about their great service. You can get data for a lot less than Republic Wireless. Because we have no cell signal at our home, we use Republic and its wifi calling, but Mint Mobile looks like it’s definitely worth looking into if you have a good signal where you spend your time and your want a cheaper cell phone bill!
Home phone – $5 Since Mike works at home a day or two each week, we have a home phone for him to use. It’s through Ooma, which is internet-based, not a traditional land line. The monthly bill is a minimal $4.50 and the initial set-up (hardware, etc) was under $100. If you want to give Ooma a try, that link should also get you a $20 credit (let me know if it’s not working).
Food – $491 We went over on our grocery budget this month. You can see our monthly grocery haul here. We had more little mid-month grocery trips than usual and got pizza twice.
Fuel – $387 Our gas spending will probably go up now that school has started, but thankfully August wasn’t too bad for us!
Houshold Misc – $277 We went to Walmart too many times this month. We stocked up on laundry detergent when there was a good rebate on the Ibotta app and also got other toiletries and cleaning supplies. I also got this freezer cooking book which I’m super excited to dive into! The pictures are pretty mouth watering!
Clothing – $122 You can see everything we bought in our complete Back-to-School thrift store clothing haul video.
Animals – $78 We bought three bags of chicken feed, 1 bag of cat food, and a bale of alfalfa for the goats while we were out of town since we wouldn’t be home to let them out to graze.
Kids’ Activities/School – $58 This is what we spend on school supplies including gym clothes, band accessories, gym locker locks, and a binder or two. We had all the regular crayons and pencils in my stash of new school supplies.
Allowances – $60 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 tied to chores, as well as all the details of when and how much in this recent blog post.
Fun – $0 We still have lots of fun. As it gets hot, we have generous friends who regularly invite us over to swim at their houses. We also do a lot of other fun, free summer activities. We did spend some money out of our sinking fund for family fun, as you’ll see below.
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 and let it build up until we need it.
The amount in bold is the amount that was 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 lives in our checking account. I’m 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 balance unless we’re reconciling the account. We track our budget categories and spending in YNAB.
Medical/Dental – $400 Since our insurance changed at the beginning of the year, which resulted in some messed up billing. Mike got it all organized this month and started getting all those bills paid up. In total we spent $634 in August. Since the beginning of the year we have had one ER visit, one x-ray, and a couple of ultrasounds and normal prenatal care. Current category balance is $3,312.
Car Maintenance – $300 Our Honda Odyssey is in the shop as I type this, so we’ll have some spending in this category next month. Current category balance is $2,655.
Christmas – $100 We didn’t do any Christmas spending . Current category balance is $510.
Life Insurance – $75 Our premiums aren’t due until November, but if we put aside $75 each month we should cover them. Current category balance is $730.
Birthdays & Gifts – $40 We spent $63 on a couple of birthday gifts. I also saw that one of our family’s favorite cooperative strategy games was on sale for less than I’ve ever seen it, so I grabbed 3 for our gift stash, as it’s a great gift for the older kids to give their friends. Current category balance is $212.
Car Registration & Smog – $40 We didn’t spend anything. Current category balance is $343.
Home Projects – $0 We aren’t actively putting money toward any home projects, but we did use some of this fund to get a digging bar and other supplies for our new clothesline. We spent $145. Current category balance is $415.
Family Fun Fund – $153 The money added to this fund is from the OhmConnect program where you earn money for reducing your electricity during designated hours a few times a week. I have a blog post and a YouTube video that explain how it works if you’re in California or Texas and are interested in earning some easy money.
We took a trip to Six Flags at the beginning of August. Our three older kids earned free tickets from the Read To Succeed program and I bought tickets for the rest of us in July. We paid $15 for a locker outside of the park so we could store our outside food and not have to buy overpriced greasy food in the park. We also had to pay a toll for the Golden Gate Bridge. Current category balance is $448.
Kids’ 529s – $125 I know that $25 per kid per month invested for college looks piddly, but we’re not as concerned about college costs as a lot of people seem to be. Scholarships, grants, loans, and jobs during school worked for us. We may accelerate this savings later, but it’s not our highest priority. You can read about our decision to start saving a little for college in this post.
IRA (Steph) – $500 $500 monthly will max out my $6,000 IRA contribution for 2019. Mike has about $700 each month deducted directly from his paycheck into a pension fund.
Mortgage Payoff Goal Progress
If you’re new here, our big goal right now is paying off our mortgage. We want to pay it off in 5 years, even though on paper right now it looks impossible. You can see all the numbers and details about our big goal here.
Our normal August mortgage payment of $3,454 includes principal, interest, property tax, homeowner’s insurance and PMI. Of that, $1,699 went to principal. In addition to the normal payment, we paid an additional $646 of principal.
That brings our totals to:
Current balance (after August 2019 payments): $324,849
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: 10.55%
Percent of 5-year time elapsed: 16.67%. Yeah. We have some catching up to do.
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.
Whew! That was a lot of numbers. Thanks for reading our personal finances made public!
If you haven’t already done so, take a sec and report your Debt Smashing progress for August! 🙂
How About You?
- How did your budget and/or debt repayment go in August?
- Any big plans for September?
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