October Family Budget Update

It’s that time of the month, where you get to be a fly on the wall as we transparently go through our family’s budget.

After a successful low-spend September, we planned for more intentional low spending in October. We did a good job keeping our grocery and household spending low throughout the month. This is our second month in a row of keeping our grocery budget under $500. For having seven of us at home, I would say that’s pretty great. We’re planning to keep spending extra low in November as well.

To lower our overall spending even more, we did a family budget audit. We found quite a few places that we could save money. We also uncovered not one, but two instances of sneaky fraud in our accounts.

The budget audit and the discovery of fraudulent charges really got me thinking (and frankly, worrying) about all of the people who don’t keep tabs on their finances.

If our family, who regularly budgets and meticulously tracks expenses, can still find ways to save more money, then you probably can too!

If we found hidden fraud in our accounts, even after reviewing them thoroughly each and every month, how much fraud could be found by people who just blindly pay their credit card bills each month?

If you’re not already paying attention to your finances, now is a great time to start! Find ways to save money and make sure you aren’t being taken advantage of.

In our transparent family budget update, I’ll start by sharing everything we spent in October, including saving and investing, then I’ll talk about what we earned in October, which we will spend in November.

Spending in October

When we first understood the concept of living on last month’s income, it rocked our financial world in the best kind of way. If you have no idea what that means, here’s a video walk-through. Or you can read up on how you can get started.

At the beginning of each month, we start budgeting by first adding up the income we earned the month before. We knew on October 1st exactly how much money we had earned and received between September 1 and September 30, so we knew exactly how much we could spend in the month of October. On October 1st, we start the October budget by taking everything we earned in September and assigning it to our October budget categories.

We can’t see the future, so on the first of October, these dollar assignments are really just our best guesses and goals. We’ve been doing this for years and can make some pretty good guesses, but every month is different. Our dollar assignments at the beginning of the month almost never stay exactly the same because our needs and priorities usually change during a month.

It’s normal for our spending plan to change as we move through the month. The important thing isn’t spending exactly how much we guessed we might spend in each budget area at the beginning of the month. It would be silly to let our October 1st guesses dictate what we can and can’t do all during the month. The important thing is to not spend more total in October than we earned in September.

If we need to spend more in one budget category than we had originally assigned, that money has to come from some other budget category. We revise the budget categories to meet our priorities during the month, but we can’t just add more money to all of them, because the total amount stays the same all month long. A changed budget is not a failed budget. A budget needs to be flexible in order to be successful!

Here’s our family’s final September spending for all of our budget categories.

Giving

Tithing – $1,246 We start out the month paying a 10% tithe on our income. Like all of our October spending, our tithing is calculated on what we earned in September. We often get questions about this. You can read our thoughts on tithing here.

Fast Offering – $100 Each month we take one day to go without food and drink (fasting) and contribute to a program that helps people who need it.

Monthly Bills

Mortgage – $3,499 We have a 15-year mortgage on our 2200 sq ft house in Northern California. We locked in our mortgage interest rate at 2.375% when we refinanced in December of 2020. At the beginning of the year, the escrow portion of our payment increased by over a thousand dollars to accommodate a massive increase to our annual home owners insurance, but we’re cancelling the ecrow account to pay property taxes and insurance on our own, so starting in November our required payment will only be the principal and interest. We currently have $121,900 remaining on our mortgage.

Here’s our mortgage payoff goal tracker house which I need to update (you can get your own copy in my shop)!

Water – $300 Our water bill comes every other month. We set aside what we hope will be half of the next bill.

Car Insurance – $551 We have four vehicles with two adult drivers and two teen drivers on our insurance right now.

Cell Phones – $75 Our phones are all through Visible. Visible is a Verizon subsidiary that offers no-contract plans with wifi calling, unlimited cell calls, and unlimited calls and data on the Verizon network. We’ve been using them for years. If you’re paying more than $25 per month for a cell phone with unlimited talk, text and data, check out this recent blog post.

Internet – $45 We have cable internet through Xfinity. When we bought our home nine years ago, we invested $5,000 to have Xfinity extend cable internet to our property. It has been worth it every single day since then! We had increased our data and speed when the Ukrainian family was here, so we just reduced it. The normal cost will be $85, but we got a credit for overpaying last month.

Gym – $10 We cancelled our family gym plan and just left our 17-year-old on the plan, as we talked about in our recent budget audit.

Garbage- $57 Like the water bill, our trash pick-up bill comes every other month, so each month we set aside the money for half of the bill. The cost seems to go up several times a year.

Electricity – $0 Three years ago we installed solar panels on our property, a $70,000 investment that we finished paying for last year. In December we have our “true-up” which is the difference between what we’ve used and what we’ve produced over the year. I’m working on writing up a detailed analysis of whether solar was worth it for us. I was hoping to have it published by now, but I passed it onto Mike who is both busy and devoted to details.

Everyday Expenses

Food – $469 We had another month of an intentionally low grocery spending. We continued focusing on what we had in our pantry, freezer, and garden. You can see what is normal for us over the years in this post about our average annual grocery spending from 2019 through 2025. There are 7 of us at home right now (still can’t believe our oldest is away at college). If you need help getting your grocery spending under control, you can learn all about my strategies and method in my Grocery Budget Hero online course. Right now it’s available with pay-what-you-can pricing!

Fuel – $685 Gas prices have just started going down. I most recently paid $5.55 at Sam’s Club. Comparing what we spent on people fuel versus car fuel is pretty mind blowing! For two months in a row, we are paying more to feed our cars than our people!

Household Misc – $71 Other than some toiletries and household things like dishwasher soap, sandwich bags, and laundry detergent, we didn’t spend much in the household category, which is a win!

Clothing – $10 – I got two pairs of shoes at the thrift store for my first grader. In my next Frugal Feats, Flops, and Funnies post, I will tell you about how disappointing these Vans shoes turned out to be. After like a month the sole had completely separated from the upper. Super frustrating!!

Animals – $29 We bought cat food in October.

Allowances – $133 We give our five kids who are living at home “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 (yes, they still have chores), as well as all the details of when and how much in this blog post.

Sinking Funds

For our regular budget categories above, we take out any funds that are still left at the end of the month and send them toward our big financial goal. For example, if we started the month with $800 in our food budget category, but only used $720 of that, the other $80 would go toward our current major financial goal. Focusing all these extra funds from each category into one goal helped us pay off our law school debt years earlier than we thought possible.

In contrast to the regular budget categories above that we zero out each month, we also put money into the categories below. These are our sinking funds. Our sinking funds are categories where we set aside money for periodic expenses each month and let it roll over and build up until we need it. I recently wrote a whole article about how to get started using sinking funds (and why you should).

The amount in bold is the amount we added to the fund this month, followed by spending notes and the current balance of each fund.

To answer a question we often get, we do not have separate bank accounts for these funds. We had separate accounts many years ago when we first started budgeting but we learned that was overkill. Instead, all of the money sits in our checking account. Since we spend according to our budget category balances, not our checking account balance, we’re not worried about getting the money mixed up. 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, a budgeting tool we absolutely adore. Yes, you can adore a budgeting tool. Don’t believe me? Try it out. If you have been using EveryDollar or something similar to manage your finances, you’ll want to read about our switch to budgeting with YNAB.

Medical/Dental – $0 added. We didn’t add anything this month, but we spent $75 on orthodontics in October. Current category balance is $1,603.

Car Maintenance – $25 added. We had to buy a new gas cap for one of our cars for $25. Current category balance is $2,228.

Christmas – $200 added. We haven’t spent anything from our Christmas 2026 budget yet. Current category balance is $1,800.

Life Insurance – $125 added. Our life insurance premiums are due each November, so we set aside a portion of the estimated total each month which will go toward next year’s premium. Current category balance is $1,375.

Disability Insurance- $190 added We set aside money each month for disability insurance so that when the annual premium is due we have the money ready. If Mike is unable to do his work as an attorney due to illness or injury, this disability insurance will replace about 60% of his current income. Since our income potential is our greatest financial asset right now, we have disability insurance to help us protect it. The annual payment was $2,000 in March, so now we’re saving for our March 2027 payment. Current category balance is $1,762.

Birthdays & Gifts – $0 added. We spent $65 on birthday gifts for one of our kids. Current category balance is $15.

Car Registration & Smog – $150 added. We spent $51 at the DMV in October. Current category balance is $297.

Family Fun Fund – $0 added. We didn’t spend anything in October. Current category balance is $305.

Swim Team 2026 – $0 added. Last year I started a sinking fund to start saving up for summer swim team. It was nice to have the money ($1,300 for 4 swimmers) saved up when registration was due. We are back to saving up for next year, though we didn’t add anything in October. Current category balance is $500.

Home Improvement – $994 added. The bathroom project is paused while we figure out some problems with the way our house was wired. We paid $54 to take a truckload of stuff to the dump. We put $1,000 down on new windows for our rental. Current category balance is $0.

Rental – $539 added. Sometimes it’s a fine line between what falls under home improvement and what falls into this rental category. In the future we might align it differently, but for now, this includes spending that’s specific to our above-garage rental. This includes $187 to list on Furnished Finder (in addition to Airbnb). We also spent a ridiculous amount on paint. Current category balance is $0

Investing

Investment property – $300 A year ago, we bought an investment property. Right now we are putting money into it, including paying the mortgage until it gets to the point where it covers its own expenses. The amount listed here is the money that came out of our family budget to go toward the new property. Our monthly costs on the property includes the mortgage payment of $2,339 (you can read more about that mortgage here) and the cost of trash service and internet. We get $700 from our RV renter that goes toward this and we cover the rest from other funds until we get a permanent rental home on the property. In October, we didn’t cover very much of that, so we used our “extra” to cover it. Our mortgage is for more than the property cost so that we had some extra to spend on putting a manufactured home on it.

Kids’ 529s – $150 added. Investing just $25 per child per month for college isn’t much, but we are okay with that. Neither of us had much college savings when we went to college, but with scholarships, grants, loans, and jobs during school we were able to get our undergraduate degrees without debt. We may contribute more later, but right now we’re happy with small, consistent contributions. I looked at the balances recently and was pleased to see that this small contribution that is barely noticeable in our monthly budget has added up and grown to over $28,500! If you want to know more you can read about how we decided to start 529s for our kids.

IRA (Steph) – $625 added. With this same amount each month, I will reach my $7,500 IRA contribution for 2026.

Income Earned in October- $13,053

The categories above show everything we spent and saved in October, which was using the money we had earned in September. At the same time we were also earning money during October. At the beginning of November, we set up our budget to allocate spending from this October income. I’ll share that spending once November is over.

This concept of getting a month ahead has made such a huge impact on our finances! It takes some work to get to the point where you are living on last month’s income, but the effort is completely worth it!

The income section below shows the money we earned in October and will used in November.

Attorney Income – $10,298 Mike works as an attorney for the state of California. This was his take-home pay after taxes, social security, his pension contribution, and health insurance premiums.

Law Firm- $1,959 Before working for the state, Mike did estate planning and business transactional work. Over the last few years he has had a steady stream of potential clients, most of whom he refers to other attorneys, but he still occasionally helps former clients. He doesn’t write himself a paycheck each month, just a couple of times a year.

Blog – $0 I also only pay myself a few times a year now. My blogging income took a major hit when I put the blog on the back burner during Covid to start homeschooling my kids. Hopefully it will recover as I put more effort into posting regularly and all of the things I do behind the scenes. Thankfully the income still covers my fixed blogging expenses (which are a lot more than most people would guess) and allows me to pay myself a few times a year.

Child Care – $796 For the past three years I have been taking care of the 4-year-old of the Ukrainian family that we sponsor. There is a community organization that pays for childcare while the mom is at work. It’s much less expensive and more convenient to have her stay with me than to bring her to a standalone child care facility.

Come back next month to see how we used this income to spend and save in November’s budget.