October was a spendy month for us. It was a perfect example of things not quite going the way you planned. Even when you’ve been faithfully budgeting for years, you will still need to make changes throughout the month. Making changes to your budget during the month doesn’t mean that your budget has failed or that you have failed at budgeting! It just means you live in the real world where things don’t always go as planned.
When we budgeted October at the beginning of the month, we put $1,000 extra toward our mortgage since paying that off is currently our big financial goal. Then about a week into the month, some other expenses came up.
As our older boys were running around the property chasing squirrels, they found some marshy, lush green grass. Since we’re in drought season here in California and everything is dry and dead, they were surprised and came to tell Mike about it. He immediately went out to find that a water regulator valve between the meter and our home had failed and was pouring out water. It must have been leaking for a while because the area is alive and green and there are clear deer trails leading to that spot. We don’t get up to that part of the property often, so it may have been leaking for years! There is no way of knowing. Once we knew about it though, we had to get it fixed. It was a painful $600 that we hadn’t planned on spending.
We try to preserve our emergency fund for true emergencies and use it only as a last resort. So we looked at our budget for the month and did our best to keep spending down in other budget categories. We planned to use the extra savings from those categories to help with our unplanned $600 plumbing expense. You’ll also notice below that we didn’t add to most of our sinking funds.
Then, Mike found a sale on some stainless steel raised garden bed kits. We’ve been planning on adding several new beds to the garden for next year, and the cost of lumber has gone up more than 50% since the spring. On sale, the steel beds cost about half as much as the lumber would have, so we made the purchase. Not only was it a great deal, but we also wanted to get the new beds quickly so we could focus on other things like fruit trees and additional fencing in the winter and early spring. We decided to take money from the car fund (that we had paused anyway) to cover the additional garden expenses in our “home projects” budget category.
You’ll see all the other details of our family’s spending for October below.
If you’re new here, for the last nearly seven years we’ve shared our family’s real budget here every month. We share what we earned, what we spent in each of our budget categories and our progress, and sometimes lack of progress, on our financial goals. Those numbers have changed dramatically over the past seven years, but we hope that whatever stage you’re in, it might be helpful to see an example of working a real life budget. There’s not one right way to do it, so yours is almost certainly going to be different. That’s just fine! It would be strange if it were the same.
If you’re working on paying off debt this year we would love to have you join us in the Debt Smash-athon! Share your progress each month and see how much we can do together. You’ll also have a chance to win a monthly prize! If your goals are for savings instead of debt, you can join in too! You can report your October debt payoff (and savings) progress right here!
Now, let’s jump into the numbers. For a live budget walkthrough in YNAB check out the video below. For all the written details, just scroll on down.
Income Earned in October – $9,249
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 October, which has all been set aside to use in our November budget. The spending section below shows the money we earned in September and spent in October.
Attorney Income – $6,850 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 recently got a pay increase, but still has the pandemic-related 10% pay cut like all California state employees.
Blogging Income – $1,399 This is my blogging income after expenses have been taken out. My blog has really taken a backseat to life right now, but I’m thankful that it still brings in something even if it is neglected.
Rental Income – $1,000 We rent the one-bedroom apartment on our property. We’ve had it listed on Airbnb for the last few years, but we have a long-term renter now instead. Though we make much less in rent than we did with Airbnb, there are some big perks. We don’t have to clean and turn over the apartment between stays and with covid it’s nice to have something steady. 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.
Spending in October
Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in September.
Tithing – $958 We always pay a 10% tithe on our income. This tithing (like all of our October spending) comes from the money we earned in September. 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.
Mortgage – $2,837 We re-financed our 15-year mortgage to a rate of 2.875% back in December 2019, which was an amazing rate then. Rates have gone down even more since then; as low as 2.3% APR today! If you have dependable income and a mortgage, there’s serious savings waiting for you on one of life’s biggest expenses. Mike shares our experience with a true no-cost mortgage re-fi, with all the numbers you could want. Anyone with a current mortgage rate above three percent is likely to find a better rate now. Check out the post to see how you might be able to save.
Electricity – $239 Our electric bill covers both our home and our rental. Our house and rental are both completely electric, with no gas or propane. It’s nice to have this bill going down now that it’s fall.
Car Insurance – $71 We took Mike’s vehicle off the insurance at the beginning of the pandemic when we realized he would be working from home indefinitely. We’re essentially a one-car family now and saving on insurance and registration. We have insurance with USAA and 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 at home is super important now 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 (a $5,000 investment)!
Water – $150 We set aside about half of what we expect the bill to be since it comes every other month. Our last bill was $300. It will be interesting to see what our bill looks like without that random leak that we discovered on our property in October.
Cell Phones – $50 After years with Republic Wireless, we both switched our cell phones to Visible. We still think Republic Wireless is a great option for people with good reception from Sprint or T-Mobile, but at our house, Verizon is the only carrier with a reliable cell signal. Visible is a Verizon subsidiary that offers wifi calling and unlimited cell calls and data on the Verizon 4G LTE network, all for $25 a month! Having cell signal to complement our wifi access is especially important for us since our power company here in California periodically shuts off power because of wildfire danger. No power means no wifi and without cell reception, that meant that with Republic Wireless we had no phone service during power outages. We’re happy paying a few dollars more each month to Visible for more reliable communication.
Another great choice 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 and you can get data for even less than Republic Wireless.
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 for the rest of the two years that she’ll have braces.
Disability Insurance- $151 This will replace about 2/3 of Mike’s current income for the rest of his life if injury or illness leaves him unable to work. Our income potential is our greatest financial asset right now and this insurance helps us protect it.
Piano – $120 Our oldest started piano lessons with me but has now graduated to a teacher who isn’t mom. The next three kids are still taking lessons from me.
Food – $425 We kept our grocery spending under control this month. Our monthly grocery haul was around $250 and then we made several smaller trips during the month. We harvested a lot from our garden and have a good food storage as well.
Fuel – $85 We still can’t get over how wonderful it is to be paying less than a hundred dollars a month in gas, when $400-$500 used to be normal!
Household Misc – $662 The majority of this was the $600 plumber bill for fixing the broken pipe on our property.
Clothing – $51 – I ordered some clothes from The Children’s Place (I love that they have free shipping!) and picked up a few things on clearance here and there.
Animals – $125 We spent nothing on animals in September, so in October we spent a lot. We bought 4 bags of chicken feed, 2 bags of dog food and a bag of cat food.
Kids’ Activities/School – $0
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.
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 $522 on medical bills. There are some more bills are on their way for next month that will pretty much use everything we have left in this category. Current category balance is $2,448.
Car Maintenance – $0 added. We decided to stop putting money toward this category for now. We have a nice balance and we’re only driving one car, and rarely, so we don’t have a lot of maintenance to do. We did spend $45 on an oil change. Current category balance is $3,973.
Christmas – $100 added. We spent $302 on some early Christmas spending! Current category balance is $581.
Life Insurance – $39 added. Normally we add $75 per month here, but our premiums are due in November and we just needed a little more to have them covered. Current category balance is $825.
Birthdays & Gifts – $0 added. We spent $11 on gifts in October. Current category balance is $266.
Car Registration & Smog – $0 added. We aren’t adding to this category for now. Current category balance is $461.
Family Fun Fund – $0 added. We didn’t add to or spend from this category in September. Current category balance is $745.
Car Fund – $0 added. We were saving to buy a more efficient commuter car for Mike, but since it looks like he will be working from home for a while still, we’re pausing the $550 monthly contributions we were making to this fund. In fact, we took $1,220 from this category and moved it to the home projects category. Current category balance is $5,059.
Preparedness – $0 added. I was planning to add to this category initially, but made changes when other things came up. Current category balance is $21.
Home Projects- $1,533 added. We put more raised beds in our garden. About $700 of this was for dirt! Mike found a sale online for some 3′ x 6′ metal beds which end up being significantly cheaper (and easier to build) than the wood ones. We also got some gopher wire for the bottoms which was about $300. The category balance is currently $0.
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 a little over $700 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. It looks kind of impossible on paper right now, but we’re hoping to figure out how to still make it happen! We’ve made some adjustments to our priorities (hello garden!), so if we don’t make it exactly in our five-year time frame, we’ll be ok with that too. You can read about our mortgage-payoff goal here and see the numbers for our most recent re-fi here.
We paid $1,524 of principal in our normal October mortgage payment, and we put $1,000 EXTRA toward the principal as well.
That brings our totals to:
Current balance (after October 2020 payment): $274,663
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: 24.37%
Percent of 5-year time elapsed (24 mo): 40%. Yep, we’re behind!
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!
How About You?
- How did your budget and/or debt repayment go in October?
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