For many people, budgeting feels like a chore or even a punishment. Call me weird, but I enjoy it! It’s how we proactively tell our money what we want it to do for us so we can make sure it helps us accomplish our goals instead of letting it just slip through our fingers.
My husband and I normally have a budget meeting at the end of the month to reconcile all of our accounts, total our income for the month, track progress on our goals, and set up our budget for the following month. We see eye-to-eye about money and are motivated to accomplish goals together, so we enjoy our budget meeting time.
During the past four months of not having internet, budget meetings have been difficult. We had to each do our “parts” on our own at different times. We still got it done and didn’t have any major setbacks, but it was more of a chore, not nearly as much fun.
I’m happy to report that we now have internet at our very own home!! In addition to a long list of activities made easier by having internet access, we’re back to having budget meetings together again. Hooray!
Here’s how July looked for us:
Our total income for July was $10,160. Since we live on last month’s income, this is money that we’re waiting to spend in August.
Attorney Income (Day Job)– $5,509 Mr. SixFiguresUnder has been working full-time as an attorney for the state of California since the fall of 2015. His actual take-home pay was $4,407 but I add back in the cost of the benefits (insurance, dental, vision, parking, union dues and retirement) that are automatically taken out of his check so that you can see what happens to the money that never makes it home.
Attorney Income (Private Practice)– $1,768 On top of working full-time, my husband has his own private law practice on the side. He started it to help speed up our debt payoff and because he had clients from his days at the small firm that didn’t want to let him go. He hasn’t done any advertising since being on his own, but the work keeps coming in. His income fluctuates greatly from month to month.
My Income (Blog)– $2,883 The income that I report is the income that I received this month minus all of my blogging expenses. Of this, I set 30% ($865) aside for self-employment taxes and the remainder ($2,018) goes into the family budget.
If you’re interested in the details of my blogging income and expenses as well as other blogging tips and resources, you can sign up for my Behind-the-Scenes Blogging emails to get the scoop.
Each month we budget down to zero using last month’s income. When we started doing this, it literally changed our lives! For more about how living on last month’s income works and how you can get started, check out my free Guide to Getting a Month Ahead Financially.
Our spending in July came from the income we earned in June. Here’s how we spent money in July:
Tithing– $979 We happily pay a 10% tithe on our total income from the previous month (June). You can read more about why we paid tithing, even when we were in debt. We’ve now made it to the end of the $8,000 that we had pre-paid in tithing (for tax reasons) at the end of 2016, so part of this $979 was paid out of pocket. The rest of our tithing through the end of the year will be out of pocket as well.
Other Giving– $80 Other charitable donations this month.
Mortgage/Rent– $2,500 Our payment is actually slightly less than this, but I like round numbers, so we decided to just pay a nice even $2,500 each month. This small adjustment actually shaves a few years off the mortgage! Curious about our mortgage? You can read more about why we got a conventional mortgage instead of FHA or USDA and then why we didn’t wait for a 20% down payment.
Electricity– $273 As expected our bill went up along with the temperature and the summer rates. Summer rates are sometimes more than double the winter rates! We have been really motivated by the OhmConnect program which lets you earn some extra money for saving power. My kids think it’s super fun to save power now. If you’re in California (or Toronto or Texas, I think) then you should definitely check it out! If you somewhere else, you can sign up too, and earn prizes instead of cash.
Water– $41 Our water bill comes every other month, so I just set aside approximately half of what I expect the bill to be. Our bill was $86, so with the $45 we budgeted and set aside last month, we only had to add in $41 this month.
Trash– $15 Part way through the month we opted to get traditional curbside trash service. Having renters has nearly tripled our trash output (we don’t produce much trash ourselves), so taking the trash to the dump once or twice a month was no longer a great option (not to mention the temperature has been in the triple digits (stinky trash!) and I’m eight months pregnant. If you want to save on trash service, here are some ideas.
Internet– $70 We have internet now!!! This first bill is a little larger than normal, though the installation fee was waived (a small consolation for paying $4,800 to have the line extended to our house). Our normal monthly bill shouldn’t be quite as high.
Republic Wireless Cell Phones– $30 We’ve been using Republic Wireless as our cell phone carrier for over two years now. This covers the cost of service for both our phones, including all taxes and fees (we’re on the Republic Refund plan). If your cell phone bill is killing you, I definitely recommend that you check them out!
Health Insurance– $408 We have insurance through my husband’s employer. This is the portion of the insurance premium that his employer does not cover. It includes health, dental and vision insurance premiums.
Car Insurance– $220 Going forward we’ll only have two cars on our insurance. We donated our 1997 Camry that had 270K+ miles on it. It still ran, but since we got a new one, there was no reason to keep the one that was probably on its last legs. We probably could have sold it, but we would have had to pay to renew the registration and pay to fix some things to get it smogged, then pay for the smog check itself. It was worth it to just donate it to be able to get it off insurance. Our auto insurance at USAA is fabulous! In addition to the wonderful coverage, they also give us dividends at the end of the year, which is always a nice treat. We’re able to get insurance with USAA because my husband’s father was in the service years ago. If you, your parent, or your spouse were in the military, you’re probably eligible for USAA too!
Food– $454 When we were still working our buns off to pay off all of our law school debt, I worked really hard to keep our grocery budget down to $300 per month for our family of five, then six. Now that it has been a year of being debt-free, I’ve loosened the grocery budget a bit and have been aiming for $400 instead. And still went over.
Gas– $294 We’re thrilled to have spent less than $300 on gas! The last time that happened was over a year ago!
Parking– $155 Working downtown means paying for parking. It comes straight out of my husband’s paycheck, which means it is paid for with pre-tax dollars, a small consolation.
Clothing– $126 I stocked up on dress shirts for the boys when I found a great deal on them. I also grabbed some other things the kids needed. They’re pretty active, and pretty rough on clothes.
Household– $207 In addition to normal toiletries, we were out of the toothpaste that half the family currently prefers, so I stocked up. I bought some hanging file folders to help get organized. I also got a fridge thermometer to figure out why the milk kept going bad.
Fun– $142 My husband and I went on an overnight date, only the second one we’ve ever done, since we’ve had kids. The accommodations were covered by a family member’s time share benefits and my inlaws offered to watch the kids for the night. We had a fabulous time! We went to see a wonderful play called “Over the River and Through the Woods,” which had us both laughing and crying. We went biking in Calaveras Big Trees State Park, and hiked and swam. We also went out to dinner!
Fun II (Family Reunion)– $422 My husband’s siblings and their families came into town for our first official family reunion. We each took a day to be in charge of breakfast, lunch, and dinner for the entire group of 30 people. In addition to food costs, we also bought some industrial plastic to make a giant slip-n-slide at our house, a volleyball net set, lots of water squirters, and tie dye supplies. Of course we will be able to use many of those things for future gatherings at our house, but we budgeted it as a family reunion expense.
Home Improvement– $251 I finally bought some curtains for our large living room windows. I spent $80 on the rod hardware and $110 on the curtains. I also bought some matching picture frames for a gallery wall and more storage bins to organize things for the attic and garage.
Furniture– $53 On half-off day at the thrift store, we bought a much-needed dresser for the boys’ room and a small desk, also for the boys’ room. I also purchased a mattress pad/cover for the new queen bed in the guest room/office.
Animals– $27 We had to buy some supplies for the chicken run/coop that my husband is still working on. We repurposed a shed that was on our property into a chicken coop. My husband built nesting boxes onto the outside so they wouldn’t take up any space inside, as it was already tight for our flock. Our chickens (which we bought as chicks shortly after moving into our house in March) started laying two weeks ago, so the nesting box project got moved to the top of the list.
Tax Prep– $90 Our tax advice and preparation plan allows the cost to be spread over the year.
Dental– $75 Technically we have a sinking fund for dental expenses, but we haven’t been contributing toward it. One of the kids needed some fillings and required sedation since he’s only five. The nitrous oxide isn’t covered by insurance. The annoying thing is that they only did half of the dental work in that visit, so we will have to pay another $75 for sedation in August. Ugh.
Now that we’re done funneling every extra cent toward debt, we are using sinking funds in our budgeting. This is money that we set aside each month into certain categories where it builds up until we need it.
Last month we didn’t do much with sinking funds, so I tried to catch up a little this month.
Car Repair– $6 Our goal is to set aside $150 each month for car repair, which I budgeted for this month. After an oil change for the van (as well as some extra oil for before I could get it in for an oil change) and purchasing jack stands (we took the nicer tires off the old Camry and put them on the new Camry), our net contribution to our car repair sinking fund wasn’t much.
Medical– $100 We’re setting aside $100 a month for future medical expenses. We typically don’t have many medical expenses (and realize that this is a huge blessing), but we do have a baby being born in a month or so, so it will be used soon enough. Right now we have $570 saved in our medical fund.
Car Registration & Smog– $20 I had budgeted $40 here, but we had to use $20 to register the old Camry as non-operative while we waited for the donation people to pick it up. The registration was expiring a couple of weeks before we could get the donation scheduled.
Christmas– ($46) I had set aside $50 for our Christmas sinking fund. I started doing Christmas shopping though, and spent $96 from that fund.
Life Insurance– $140 If we put aside $70 each month, we will have our premiums set aside for when they’re due in the fall. We haven’t done this every month, though, so this month I set aside double to make up for that.
Gifts– $10 I budgeted to set aside $30 for gifts, but ended up spending $20 on a baby shower gift, so the net contribution to our sinking fund was just $10.
Retirement– $539 With my husband’s state job, this amount comes directly out of his paycheck and into his state retirement fund.
College Savings– $100 We contribute $25 per month per child to 529 accounts. It’s not much, but it’s a start. More on our decision to start saving for college in this post.
Here’s a quick look at our current savings goals. We’ve taken care of taxes, the cost of getting internet installed, and saving for a new (used) car.
The next goal is to beef up our our emergency fund. We’ve set the goal amount at $25,000, so we still have a long way to go! During July, we added $2,000 to our emergency fund, which brings the total up to just over $7,000.
As I looked back at our financial goals for 2017 and beyond, I realized we have not done anything toward maxing out our IRAs for 2017. We still have lots of time before we have to file our 2017 taxes, but I hadn’t even thought about that piece of our goal for a while, so it was good to remind myself of it.
That’s it for us this month.
How About You?
- I’d love to hear about how your budget and/or debt repayment went in July!
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Stephanie, I wanted to let you know that we paid off our mortgage this week. This month we were down to 1.02 per day in interest. I want to thank you for all your encouraging posts that got us through these last couple of years. It was a happy moment when we saw it posted online on the mortgage website PAID IN FULL! Now it is time to play the savings game for the last couple of years before my husband retires.
That is SOOOO exciting Marty! Big congrats to you guys!! 🙂
Amber from Red Two Green says
Your grocery budget always blows my mind! I just don’t get how you stayed under $300 in law school with your whole family. Very impressive! We are still chipping away at our $600k of student loans and can’t seem to keep it regularly under $400 for our family of 3.
[email protected] Reckoning says
Debt repayment stalled for us in July. We finished paying for our June vacation (not quite enough in the sinking fund; I’ll need to adjust that for next year) and we had some big vet bills for a surgery on our oldest dog.
The nice thing about starting a new month is it feels like a clean slate, so we hope to get back after the debt payments in August.
I totally agree! I love the feeing of a fresh start each month!
Just curious about the rental situation….is that an income source or used to offset taxes as a sort of giving/tithing situation?
That’s a great question. Right now, we’re saving all of the rent we receive in a separate account (not accounted for here). We put a big chunk of money (from our family budget) into a necessary improvement on the rental unit, which we will eventually reimburse ourselves for. Up to this point, the rent hasn’t covered that expense, so we’re not pulling an “income” from the rental.
I haven’t figured out all the tax details yet, but I’m guessing it will be somewhat of a wash this year, but hopefully next year we’ll be putting the rent income toward the mortgage.
Krystal @ Simple Finance Mom says
Hooray for goal setting!! I love tracking our progress, and I have to say YOU inspired me to start doing it on my own blog. There is something powerful about putting your dreams in writing! I am more motivated to make it happen. We are working on our emergency fund, BUT I teach part-time and tutor part-time so the summer months leave us with little to no money left over for savings. We actually had to dip into our savings this month, bringing it from 83% to 80%. Instead of getting discouraged, I’m happy that unlike a few years ago, we actually have a savings account to pull from.
I love reading how the expenses all break down. Sometimes if only not to feel like a bit of an isolated being in a great wide world! I also love how detailed your report is – thank you for sharing
[email protected] says
My husband got a small raise from the state, which we will be putting toward our own law school loans. This coming month we will be below the $60,000 mark, which is huge for us since we started at $90,000 a few years ago. We are trying to tighten up our budget even more to make more progress on our loans.
Congrats on the raise and getting below $60K Jenni! That’s exciting! Keep the momentum up– you’re doing great!
I commend you for your tithing. I tithe $200 each month. While it would be nice to see that $200 go to a debt or savings payment, I’m with you on giving gratitude to God. The sad part is that the majority of church goers don’t do the tithing. That’s neither here nor there. There were times where I never thought that I’d end up in my career (acceptance into a RN program, passing state exams, finding a good job, etc.). All of that glory goes to Him for putting me in a financial position to afford living costs in San Diego. On top of that, it also comes in handy during tax time 😉
Hi Stephanie! I love following your blog. We are a family of 6 as well in San Diego and struggle so hard with our grocery budget. Would you be willing to share one week of your meal plan sometime? We spend an average of 700-800 a month and I’m always so impressed with how little you spend! I would love some ideas for lowering it. Thank you!
That’s a good idea Desiree! I will share a meal plan in the near-ish future (but probably not until after baby when life normalizes a bit). 🙂
Congratulations on having internet! And good luck with that last miserable month of pregnancy.
We don’t feel comfortable with less than $10,000 in savings. We had to dip below that level to buy the investment property; but less than two months after purchasing the house, and after all completing all of the renovations, we’re above $10,000 in savings again. That feels fantastic.
That’s awesome that you’ve got your savings back up so quickly! And hooray for getting the renovations done!
As for the pregnancy, I feel pretty good generally, but not being able to bend down and pick things up easily because there’s a huge belly in the way is what drives me a little nuts!
Mrs Heller says
Thanks for the breakdown of your familys expenses. It’s always interesting how other familes budget.
You wrote you loosened up on the grocery budget. How do you spend the extra money? Do you buy more food now or just more expensive brands?
Kind regards from Munich, Germany
That’s a good question. It’s not more expensive brands– I’m careful with prices of each item that goes into my cart– I think it’s just more extras, like ice cream or other “treats” that we didn’t buy regularly while we were paying off debt. Also, I’m not meticulously adding up the cost of what’s in my cart like I would if I were using a cash budget or intent on paying off as much debt as possible that month, if that makes sense.