Transparent Family Budget Update — August 2018

Hi friends!  I’m back to talk monthly finances with you!  I love sharing our real family budget with you each month.  It gives me a good excuse to keep on the ball and take a look at how we did each month.

You may have noticed that I’ve taken some time away from Six Figures Under this summer, especially in August.  I have lots of plans for new content (and some posts are nearly finished), but I’ve been pretty busy with family things all summer.

In addition to all of the normal day-to-day busy-ness of taking care of five kids, we’ve spent lots of our extra time getting our apartment ready to list as a short-term rental.  Since our renters moved out at the end of July, we thought it would be a good time to try out the short-term rental market (something we’ve been itching to try).

A vacation rental has the potential to make quite a bit more money than as a traditional rental (and, yes, we realize that it is also more work), but we have no idea how the bookings will go and what the demand will be.

There’s only one way to find out!  I’m planning to do a post with all of the details of the financial side of things as soon as we have some data (besides how much we spent).

In August we used the $2,000 that we had set aside in our rental emergency fund to do the fixing up and furnishing.  As those are business expenses instead of family budget items, that spending isn’t accounted for here.  But I’ve been saving receipts and keeping meticulous notes on our rental-related spending so that I can give you the complete scoop.

As for our normal family earning, spending, and saving, you’ll find all of those details below!

Here are the numbers from August 2018!

Income

Our total income for August was $9,417. Since we live on last month’s income, this is money that we’ve been holding to start spending in September.

Attorney Income (Day Job)– $6,582 Mr. SixFiguresUnder has been working full-time as an attorney for the state of California since the fall of 2015.  His actual take-home pay was $5,443 but I add back in the cost of the benefits (insurance, dental, vision, parking, and retirement) that are automatically taken out of his check so that we can tithe on that money.

Attorney Income (Private Practice)– $575  My husband has a part-time private law practice on the side, but the income from it (and when he is paid) varies wildly.

My Income (Blog)– $2,260  Of this, I’m setting aside 25% for taxes ($565) and distributing $1,695 to the family checking account as my paycheck.  I use Blog Finance Spreadsheets to keep track of everything.  Elite Blog Academy is the course I took back in 2014 that set me up for blogging success.

Spending

Each month we budget down to zero using last month’s income.  This change revolutionized our budget!  For more about how living on last month’s income works and how you can get started, check out my free Guide to Getting a Month Ahead Financially.

Our spending in August came from the income we earned in July.  Here’s how we spent money in August.

Tithing– $862— We happily pay a 10% tithe on our total income from the previous month.  You can read more about why we paid tithing, even when we were in debt.

Other Giving– $80– Other charitable giving this month.

Mortgage– $3,200 We recently refinanced our mortgage from a 30-year to a 15-year mortgage.  If you want to see all the numbers and read about why we did it, read this post that my husband wrote explaining everything!

If you want to know more about our house finances, you can read more about why we got a conventional mortgage (instead of FHA or USDA) and then why we didn’t wait for a 20% down payment.

Electricity– $259 We get our electric bill at the beginning of the month for the electricity we used in the previous month.  We still had renters for most of this billing cycle, so this is the cost for two households.  We only turned on the A/C a couple of times.

In August, we earned $86 cash with OhmConnect, just by using less power during peak times for two or three specific hours each week.  We put our earnings into the kids’ fun fund (not to our family budget). If you’re in California, Toronto or Texas, you should definitely check out the OhmConnect program. I’m working on a post and video that will give you all the details (but, as you may have noticed, I kind of took the month of August off).

Water– $60 Our water bill comes every other month, so I just set aside approximately half of what I expect the bill to be.

Trash– $32 Our bill for trash service comes every other month, so I set aside half of the bill each month.  We’re currently paying for curbside pickup, but that’s not the only way to do it.  If you’re trying to cut every expense to its bare minimum, here are some ideas to save on trash service.

Internet– $70  We are happy to pay for internet.  When we first moved into our home, reliable internet was only a dream as the property had no access to fiber, cable, DSL, or fixed wireless.

Home Phone- $4  Since my husband works at home a day or two each week, we decided to get a home phone for him to use.  It’s Ooma, which is internet-based, not a traditional land line.  The monthly service charge is minimal ($4) and the initial set-up (hardware, etc) was under $100.  If you think Ooma might work for you, that link will also get you a $20 credit!

Republic Wireless Cell Phones– $18 We’ve been using Republic Wireless as our cell phone carrier for over three years now.  This covers the cost of service for my phone, including all taxes and fees. (We’re on the Republic Refund plan from a few years ago which is no longer available; an equivalent plan for a new user today would be $20/month). My husband also has a Republic phone which he uses for his private practice, but that’s a business expense, not a family budget expense.  If your cell phone bill is killing you, I definitely recommend that you check out Republic Wireless!

Health Insurance– $316 We have insurance through my husband’s employer.  This is the portion of the insurance premium that his employer does not cover.  The total coverage includes health, dental and vision insurance premiums. This $316 is deducted directly from his paycheck and goes straight to the insurance company, so it never makes it to our hands.

Car Insurance– $168  Our auto insurance at USAA is fabulous!  In addition to the wonderful coverage, they also give us dividends at the end of the year, which is always a nice treat.  We’re able to get insurance with USAA because my father-in-law was in the service years ago.  If you, your parent, or your spouse were in the military, you’re probably eligible for USAA too!

Food– $427  I had a smaller monthly grocery haul in August because we did some shopping at the end of July.  Whenever I do a smaller shopping trip at the beginning of the month, I end up doing more spontaneous shopping trips mid-month, which always costs more total than consolidated monthly shopping.

Gas– $315 We didn’t take any trips in August, which was nice for the gas budget.  The current price around here last time I filled up was $3.17 per gallon.

Parking– $165 Working downtown means paying for parking.  It comes straight out of my husband’s paycheck, which means it is paid for with pre-tax dollars, a small consolation.

Clothing– $0  

Household– $95 This is about as low as our miscellaneous household budget ever gets!

Fun– $12  I got three $4 snorkel masks for our kids.  We have one that we got at the thrift store ages ago and it is the most popular item in our swim bag, so when I saw some at Grocery Outlet, I jumped on it.

Animals– $48  We got four 40 lb bags of chicken feed in August.

Tax Prep– $90  Our tax advice and preparation plan allows the cost to be spread over the year.  Some people wonder why we pay so much for this (a total of $1080 a year.) That’s a valid question.  We prepared our own returns for years, but in the last few years, as our income sources have been varied, we’ve found the planning and preparation more than pays for itself in minimized tax payments (actual dollars saved), not to mention to the additional peace of mind.

Allowances– $60 We give our kids “practice money” as a weekly allowance.  Each week they get $.50 per year of their age.  I’ll explain our system and how it works in an upcoming post, but if you want a sneak peek, check out the book The Opposite of Spoiled.

Kids Activities/School– $59  This includes school supplies and some activities our kids are involved in.

Sinking Funds

Now that we’re done funneling all of our extra money toward debt, we use sinking funds in our budgeting.  This is money that we set aside each month into certain categories where it builds up until we need it.

The amount in bold is the amount that was added to the fund this month.  Any spending from the fund is noted in the comments, along with the current category balance.

We do not have separate accounts for these funds.  All of the money lives in our checking account.  I’m not a bit worried about getting the money mixed up because we spend according to our category balances, not our checking account balance.  We seriously never even look at our checking account balance unless we’re reconciling our account.  We track our budget categories and spending in YNAB.

Home Projects– $0  We didn’t contribute to our home projects fund at all, but we spent most of the money we added last month.  We got a new garage door (ours was broken when we bought the house) which was just over $2,000.  We also had some windows and screens replaced or repaired on the house and garage, which was about $750. In total we spent $2,779 and have $1,045 remaining.

Dental– $30  We spent $37 on a filling for one of the kids.  We have $203 in dental right now.

Medical– $0 We didn’t spend any of our medical funds in August. Our current balance for medical is the same as last month: $691.

Car Repair– $300 Driving older cars, it’s always exciting to have a month where we don’t spend anything on car repair! The current balance in our car repair fund is $627.

Car Registration & Smog– $40  We currently have $264 in this fund.

Christmas– $48  We didn’t put in the full $100 this month.  We currently have $757 in our Christmas fund.

Life Insurance– $70 If we put aside $70 each month, we will have our premiums set aside when they’re due.

Gifts– $40 This is our fund for birthday and other gifts.  We spent $22 which included a gift for a birthday party our daughter attended and some flowers that my husband bought me on my birthday.  We currently have $216 in our gifts fund.

Retirement– $631 With my husband’s state job, this amount comes directly out of his paycheck and into his state retirement fund.

College Savings– $125  We put $25 per kid into 529 accounts.  More on our decision to start saving for college in this post.

Vacation/Family Reunion– $0  If you got my last email, you know that we had to spend about $200 on a speeding ticket we got in a small town in Nevada on our way to our family reunion.  That puts our vacation fund at $93.

 

Savings Goals

Our savings goal for 2018 is $26,000 ($15,000 toward our emergency fund and $11,000 to my IRA).

Emergency Fund

Our goal for 2018 is to reach $25,000 in our emergency fund (we started out with about $10,000 at the beginning of the year). We reached this goal in July.  In August we didn’t add anything to our emergency fund now that we have reached our goal.

IRA

In August we contributed $550 to my IRA. We automate this contribution each month so that by the end of 2018 my IRA will be maxed out.

At the end of August we are at $23,800, which is 91% of our goal!

So the rest of our 2018 saving goal is just to put $550 in the last 5 months ($2,200) of the year.  Hopefully we will be able to save for a few more (small) house projects as well.

There you have it!  Personal finance made public!

How About You?

• I’d love to hear about how your budget and/or debt repayment went in August!
• How is your progress on your financial goals for 2018?
• If you have any questions about how we budget, I’m happy to answer them in the comments or in a future post.

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