Many of us never had any real teaching about budgeting or personal finance. We were just thrown into the world of adulting and expected to figure it out.
Keeping money a taboo topic doesn’t really help anyone (unless you’re a credit card company, student loan servicer, or payday loan shark). Six years ago our family decided to break the silence and start transparently sharing our real family budget each month..
The change in our finances over the years, from our first budget reports to the current ones, has been dramatic! We share our numbers to keep ourselves accountable, but also to give a real example of how budgeting can work.
As always, don’t get caught up in comparing the details. The “personal” in personal finance means that we get to choose our own priorities and then put our money there. Your priorities are not going to be identical to ours, but hopefully you can still learn a thing or two and apply it to your own financial journey.
If you recall, in my June budget update I shared that we earned about twice as much as normal. Since we budget using last month’s income that means we were blessed with a lot of flexibility in our July budget.
The first thing we did was to pay ourselves back for the money we borrowed from our future selves (back in May) to buy the new-to-us Honda Odyssey. That totaled $5,791. You can read all about that in May’s Budget Update.
It felt really good to finally have that straightened out, though it was really convenient to be able to “borrow” from ourselves without even dipping into an emergency fund or anything. We only did it because we knew that we had a big income month coming up.
Having a month’s worth of income as a buffer is just one of the many benefits of living on last month’s income. For more details on being a month ahead, check out my recent YouTube video here or this new blog post.
Thankfully that still left us with a nice chunk to put toward our mortgage. We’ll get to those details in a minute.
If you would rather watch or listen to a walk-through in our YNAB budgeting tool, you can do that too!
Before I get into our numbers I want to remind you to report your June progress in our community Debt Smash-athon by July 10th! As soon as you finish reading here, go to the July Debt Smash-athon reporting form to let us know how you did. You’ll get entered for the monthly prize! Remember, 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 progress, not just of all the people who are rocking it every 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 July – $9,610
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 July, which has all been set aside to use in our August budget. The spending section below shows the money we earned in June and spent in July.
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 $1,794 – 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 traffic.
Airbnb Income $1,694 – This month we had our highest Airbnb income so far, and no extra Airbnb expenses! 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 July
Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in July.
Tithing – $1,937 We always pay a 10% tithe on our income. This tithing (like all of our July 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 – $335 This bill covered the electricity used in June. Our house (and our rental, which is on the same meter) is 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 our Airbnb apartment full almost every day, usage goes up a little too.
Car Insurance – $283 Our insurance is higher than normal because we currently have three cars insured instead of two. We’ll be back down to two vehicles soon. 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 – $70 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 – $73 Our water bill comes every other month and varies, but we try to set aside half of what we expect the bill to be. This month the bill was higher, so we had to make up for that with a higher allocation than the normal $45.
Trash – $35 Our garbage collection bill comes every other month, so we set aside half each month.
Cell Phone (Steph) – $22 Republic Wireless no longer offers my plan to new customers, but you can now get a 1 GB plan for $20/month. That’s pretty sweet too. It’s what Mike has, but it’s a business expense for him, 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.
I had a reader recently tell me about Mint Mobile. It looks like another really great option for affordable cell phone service, especially if you want to bring your own phone. 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 cell phone bill is through the roof!
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 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 – $502 We went over on our grocery budget this month. We stocked up on some meat in our monthly grocery haul, plus I stocked up on some other good deals I found during the month. A lot of our extra spending was summer stuff like having people visit and bringing food to lots of BBQs and events that were a little more spontaneous
Fuel – $367 We’re happy to have spent $200 less on gas than we did last month!
Houshold Misc – $131 Some months this category can get high, but we did pretty well in July.
Clothing – $159 The kids and I took a trip to our favorite thrift store in Sacramento and got an assortment of clothes and shoes. We also for some end of season summer shoes on clearance. I bought some dress clothes for Mike from Lands End.
Animals – $75 We spent more than this because we bought a dog rake/shedding brush and a self-cleaning pet brush, but we also returned some plastic fencing we had purchased last month. The goats were unimpressed by our experiment with temporary fencing, so we’re giving the rest back to the store unopened. That return put some money back into this category. We bought cat food, dog food, and 5 bags of chicken feed (to stock up).
Kids’ Activities/School – $20 The only kid activity we had to pay for was my oldest’s really affordable dance class.
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.
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 This month we didn’t spend anything. Current category balance is $3,545.
Car Maintenance – $300 We didn’t spend anything on cars. Current category balance is $2,055.
Christmas – $100 We spent $180 on Christmas. As a kid I loved the Avonlea series on the Disney channel. I found the Road to Avonlea Season 1-7 box set on Ebay for a good price so I snagged it. I’m excited to share this wholesome family series with my kids. I wasn’t a crazy Prime day shopper, but I did grab a few things for Christmas including the Harry Potter 8-film set and some Melissa and Doug Water Wow Activity Pads for my littles. I also got some dress pants for my husband (different from what is listed under the clothing category), though I might be returning them. Current category balance is $410.
Life Insurance – $150 Our premiums aren’t due until November, but if we put aside $75 each month we should cover them. We skipped adding to our sinking funds in one month earlier this year, so I made up for it in July when we had an extra high income to work with. Current category balance is $655.
Birthdays & Gifts – $40 We spent $18 on a birthday gift for a friend. We got him one of our family’s favorite cooperative strategy games. We got it for ourselves last year for Christmas and it was a big hit! Hooray for team work instead of competition! Current category balance is $235.
Car Registration & Smog – $40 We didn’t spend anything. Current category balance is $303.
Home Projects – $0 We aren’t actively putting money toward any home projects, but we did use some of this fund to paint for the dining room and blackout fabric I can use to make summer curtains. Current category balance is $561.
Family Fun Fund – $111 We have a Six Flags trip planned for the beginning of August. Our three older kids earned free tickets from the Read To Succeed program, but I had to buy tickets for the rest of us. I got them online during their summer sale, which cost $142. 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. Current category balance is $349.
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 July mortgage payment of $3,454 includes principal, interest, property tax, homeowner’s insurance and PMI. Of that, $1,682 went to principal. In addition to the normal payment, we paid an additional $3,550 of principal.
That brings our totals to:
Current balance (after July 2019 payments): $327,662
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: 9.78%
Percent of 5-year time elapsed: 15%. 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 July! 🙂
How About You?
- How did your budget and/or debt repayment go in July?
- Any big plans for August?
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