Phew! We are essentially done with our first year of homeschooling. I don’t know how those one room schoolhouse teachers handled things, because four kids in four grades with two littles, was no small feat! It was great for lots of reasons and we don’t regret it at all, but the blog has definitely been neglected.
We are still budgeting, living frugally, rocking a low grocery budget, cooking from scratch, and all the other exciting things you come to Six Figures Under for. I just haven’t been sharing the details with you.
I hope you are still working towards your goals too! While budgeting and frugal living may be fun in and of themselves, their real purpose is to help us reach our goals. Budgeting helps us align our money with our priorities and makes our money work for us!
Our budget update for May will be out next week and we’ll be back to doing a YouTube video of our budget walkthrough to go along with it!
Okay! Let’s talk about what happened in April!
Income Earned in April – $7,917
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 April, which has all been set aside to use in our May budget. The spending section below shows the money we earned in March and spent in April.
Attorney Income – $6,917 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’s still working with a temporary 10% pay cut, like all California state employees, because of expected budget shortfalls related to the pandemic.
Rental Income – $1,000 We rent the one-bedroom apartment on our property. We had it listed on Airbnb for the last few years, but have a long-term renter now instead. Though we don’t earn as much as we did with Airbnb, there are some big perks. We don’t have to clean and do a full covid-disinfect and airing of the apartment between stays, for one. 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 April
Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in March (which was much higher than normal because it included both a covid stimulus and tax refund).
Tithing – $2,797 We always pay a 10% tithe on our income. This tithing (like all of our April spending) comes from the money we earned in March (which was way higher than normal because of the covid stimulus and tax refund). 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 – $2,369 We re-financed our 15-year mortgage in December 2020 so this is our current monthly payment. Mike shared all of the numbers and re-fi details here.
Electricity – $278 Our electric bill covers both our home and our rental. Both are completely electric, with no gas or propane.
Car Insurance – $123 Our auto insurance is through USAA and we 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 is super important 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. That $5,000 investment was worth every penny!
Water – $45 This bill comes every other month, so each month we put approximately half of what we expect the bill to be.
Cell Phones – $50 We have two phones with Visible, a Verizon subsidiary that offers wifi calling and unlimited cell calls and data on the Verizon 4G LTE network, each for $25 a month! This isn’t the very cheapest cell phone option out there, but the Verizon 4G network is the only network with any signal at our house, and we’re at our house pretty much all the time now.
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 through the end of this year.
Disability Insurance- $151 This will replace about 2/3 of Mike’s current income if injury or illness leaves him unable to work as an attorney. Our income potential is our greatest financial asset right now and disability insurance helps us protect it.
Piano – $120 Our oldest takes piano lessons. The younger kids are still learning off and on with mom.
Food – $568 We had a pretty typical month for grocery spending. If you want to learn exactly how we keep our family’s grocery spending low and consistently stick to our budget, you’ll want to get on the waiting list for Grocery Budget Hero, the online course where I teach all of my grocery strategies. It will be opening up again soon! UPDATE: Grocery Budget Hero is now open for enrollment!
Fuel – $303 With Mike not commuting and the kids not in school or any activities, we don’t do much driving these days, but we did have a small road trip.
Household Misc – $456 A big portion of our household spending went to buying a new mattress for one of the kids’ beds. We also stocked up on some summer essentials like sunscreen and swim goggles. We also restocked regular household toiletries and other supplies.
Clothing – $407 – We spent waaay more on clothing than we typically do. We got several pairs of new shoes for Mike and some of the older kids. With three kids on swim team for the first time, we invested in some nice racing swimsuits. I found them for really amazing prices, but they still add up. We also got regular swimsuits for pretty much everyone else in the family.
Animals – $69 We got 5 bags of chicken feed.
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.
Homeschool – $50 We haven’t actually spent this money yet, but I know there are some things I want to buy for homeschool next year that can’t be purchased with state funds. Since we had extra money in the budget, I decided to put it aside this month.
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 $196 on medical/dental expenses. Current category balance is $1,332.
Car Maintenance – $0 added. We decided to stop putting money toward this category for now. We have a nice balance and we’re driving rarely, so we don’t have a lot of maintenance to do. Current category balance is $3,920.
Christmas – $100 added. We didn’t make any purchases for Christmas 2021 in April. Current category balance is $362.
Life Insurance – $75 added. We add $75 per month here and then we have what we need for our life insurance premiums, which will be due next November. Current category balance is $450.
Birthdays & Gifts – $40 added. We spent $10 on gifts in April. Current category balance is $253.
Car Registration & Smog – $0 added. We aren’t adding to this category for now. Current category balance is $373.
Family Fun Fund – $300 added. We started adding to this fund again to plan for some summer adventures. Current category balance is $300.
Preparedness – $0 added. I didn’t do any extra emergency preparations in April. Current category balance is $314.
Home Projects- $500 added. We didn’t spend anything on home projects in April, but we know there will be things coming up. The category balance is currently $1,124.
Garden & Orchard- $500 added. We spent $1,192 on supplies for orchard fencing and irrigation. The category balance is currently $823.
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 about $800 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. We just finished up the second year of working on this goal. You can read about our mortgage-payoff goal here and see the numbers for our most recent re-fi here.
We paid $1,274 of principal in our normal April mortgage payment, and we didn’t put any extra toward the principal this month because we’re still trying to decide about possibly pausing this goal to put in solar. We did set aside $12,754 to be put toward one or the other. Once again, that huge amount is mostly due to our covid stimulus and tax refund. Our balance that we have waiting for us to decide if we will invest in solar or put toward the mortgage is currently $17,767. We have the quotes and should be making a decision soon!
Current balance: $260,200
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: 28.35%
Percent of 5-year time elapsed (30 mo): 50%. We’re pretty far behind where we should be to reach our goal. At this point it doesn’t look like we will have our house paid off in 2.5 years, but we’re a whole lot closer than if we had not set the goal in the first place.
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.
How About You?
- How did your budget and/or debt repayment go in April?
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