It’s monthly budget update time! As usual, we’re sharing what we did with our money last month. If you’re new here, let me make a quick introduction. We are a family of 8 in Northern California. Mike is an attorney for the State of California and I stay home (and now homeschool) our six kiddos. We’ve been sharing our budget here for over seven years. Our finances have come a LONG way during that time!
You’ll find all of our June spending numbers explained below. If you’d rather watch a walk-through of our actual budget in the YNAB app, you can checkout the video below. Otherwise keep reading.
Income Earned in JUNE – $12,230
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 June, which has all been set aside to use in our July budget. The spending section below shows the money we earned in May and spent in June.
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 last year the state expected some really huge Covid-related budget shortfalls. It turns out that tax revenue was actually up due to a strong stock market during the pandemic. With the state flush with cash, we hope that pay cut goes away soon.
Rental Income – $1,000 We rent the one-bedroom apartment on our property. We had it listed on Airbnb for a 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.
Vacation Time Payout – $4,313 Mike accrued extra vacation time during the furlough pay cut and had the option to cash out some of that time. He cashed out a portion of the time off he had accrued, being sure to leave plenty for actual time off too.
Spending in June
Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in May.
Tithing – $915 We always pay a 10% tithe on our income. This tithing, like all of our June spending, comes from the money we earned in May. 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 to a 2.375% rate in December 2020 and this is our current monthly payment. Mike shared all of the numbers and re-fi details here.
Electricity – $203 This electric bill covers both our home and our rental. Both are completely electric, with no gas or propane. I think we’ve only used our air conditioning once or twice so far this summer. It has been hot, but it usually cools off pretty nicely at night, so if we’re strategic with when we open the windows and when we close the windows and blinds, we can keep the temperature tolerable. (Though it’s 108 when I’m writing this, so we have the A/C on to keep the house at 80).
Car Insurance – $106 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 – $70 This bill comes every other month, so each month we put approximately half of what we expect the bill to be. This will be going up as we water the garden during the hot summer months.
Cell Phones – $50 We have two phones with Visible, a Verizon subsidiary that offers wifi calling and unlimited cell calls and cell data on the Verizon 4G LTE network. Each phone is $25 a month! Actually, right now you can get the first month for just $5 to give it a try!
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- $185 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 – $503 Another 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 this summer!
Fuel – $677 We took a road trip to Utah for a week and a half. We spent a lot of time in the car as we drove around the state to visit Zion, Bryce Canyon, and Arches National Park, so we used lots of gas. The nice thing about traveling outside of California is that gas everywhere else looks cheap! It’s over $4 here.
Household Misc – $400 The majority of this spending was for a new KitchenAid. My 5 quart KitchenAid was driving me nuts! The bowl kept coming out (it’s supposed to lock into the base) while it was mixing, so I always had to babysit it and be ready to catch the bowl and turn it off to avert a disaster. Mike bought us a refurbished 6 quart model for $280, which makes it big enough to double recipes that the other one wouldn’t allow.
Clothing – $90 – We bought some summer clothes and shoes.
Animals – $110 We bought dog food, cat food, and 4 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 – $6 We spent just a bit on homeschool things.
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 $42 on medical expenses. Current category balance is $2,058.
Car Maintenance – $0 added. We’re not putting money into this category right now. We have a nice balance and we don’t drive a lot now, so we don’t have a lot of maintenance. We didn’t spend anything in June. Current category balance is $3,914.
Christmas – $100 added. We spent $57 on some gift cards for Christmas 2021. Current category balance is $505.
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 $600.
Birthdays & Gifts – $0 added. We normally add $40, but we didn’t in June. We also didn’t spend anything from this category in June. Current category balance is $253.
Car Registration & Smog – $0 added. We aren’t adding to this category for now. We didn’t spend anything either. Current category balance is $373.
Family Fun Fund – $300 added. We spent $392 from this category. We took a road trip for a week and a half. We covered the gas in the fuel category above, but this category included some of the food we ate on our trip, a night at a motel, entrance to some water parks. Current category balance is $508.
Preparedness – $0 added. I didn’t do any extra emergency preparations. Current category balance is $314.
Home Projects- $0 added. We didn’t add anything to or spend anything on home projects, but we know there will be things coming up. The category balance is currently $1,124.
Garden & Orchard- $0 added. We spent $20 on some more sweet potato slips. The category balance is currently $199.
Kids’ 529s – $125 We know that $25 per kid per month invested for college isn’t much, but college costs are not our highest concern. Scholarships, grants, loans, and jobs during school worked for us. We may accelerate this savings later, but we’re ok with small, consistent payments right now. The kids like to see their balances growing, and it adds up and teaches them good savings principles, even if it won’t entirely pay for school. 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 two and a half years 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.
This month paid $1,317 of principal in our normal June mortgage payment. We also put $639 extra toward our mortgage principal. That’s money we’ve been holding onto from the third Covid stimulus check, our tax refund, and a few months of not making extra payments. We thought perhaps we would put it towards a solar system instead, but decided to keep working on the house payoff for now. Solar will have to come later.
Current mortgage balance: $238,971
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: 34.2%
Percent of 5-year time elapsed (32 mo): 53.3%.
We’re not on target now to pay off the mortgage in our goal of 5 years, but we’re a whole lot closer than if we had not set the goal in the first place. And we’re really not heartbroken about our progress. We’ve been making decisions together and intentionally, trying to balance how much focus we put on our financial goals with how much time and money we want to spend with our family as they’re growing up so quickly!
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 June?
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