Real Family Budget Update– December 2019

Since the Frugal Fresh Start Challenge posts are just happening on weekdays, I thought today was a perfect time to share our December Budget Update.  You may have missed November’s budget update because it was posted super late in December between the end of the Frugal Festivities series and beginning of the Frugal Fresh Start Challenge.

Highlights from December’s budget include refinancing our mortgage again and getting the pay out for Mike’s totaled car.  You’ll see the details below.

As always, we’re sharing our income, expenses, and how we’re working toward our financial goals. Your budget shouldn’t look like ours. Your income, expenses, goals and priorities are different, so what you do with your money will look completely different.

Still, I think it can be really helpful to see the way other families manage their money, especially since budgeting isn’t taught in schools and most people have limited experience seeing real budgets in action.

Before I jump right into our numbers for December, I want to invite you to join me for the Frugal Fresh Start Challenge if you haven’t already.  I’m here and over on YouTube every weekday through Feb 7th. I want to help you reset your money habits and be more frugal so that you can get out of debt and reach your financial goals faster.  You’ll get the workbook emailed to you when you join the challenge.

Also, this is the last month of the 2019 Debt Smash-athon!  As soon as you finish reading here, go to the December Debt Smash-athon reporting form to let us know how you did. You’ll get entered for the monthly prize!

Let’s jump into the numbers for December. If you want to see everything in our actual YNAB budget, I’m sharing my budget screen with you and walking you through everything in the video below. Or if you’d rather read, just keep scrolling!

We budget using money we earned last month.  If the concept of being a month ahead of your expenses is new to you, check out my recent YouTube video here or this blog post.  We’ve been budgeting this way for years and absolutely love it!

Income Earned In December – $10,555

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. The income section shown here is the money we earned in December, which has all been set aside to use in our January budget. The spending section below shows the money we earned in November and spent in December.

Attorney Income $7,108 – Mike works as an attorney for the state of California.  This is his take-home pay after taxes, social security, health insurance premiums, union dues, and parking fees are taken out. This month includes a $772 check he got for some back pay.

Blogging Income $1,788 – My blogging income really fluctuates but I am really grateful that I’m still earning money from the long hours I put in in the early days of my blog.  I’m hoping to ramp up the blogging income in 2020.

Airbnb Income $1,555 – We’re thankful to be able to earn extra income by renting out the one-bedroom apartment on our property. If you’re thinking about renting out your space, check out Mike’s recent post about dealing with insurance for your Airbnb rental.  You can also see an explanation of how we handle our Airbnb finances.

Spending in December

Each month we budget the previous month’s income down to zero.  This is how we spent the money we earned in November.

Giving

Tithing – $969 We always pay a 10% tithe on our income.  This tithing (like all of our December spending) comes from the money we earned in November.  You can read about why we continued paying a 10% tithe even when we were in debt.

Fast Offering – $80 Each month we take one day to fast (go without food and drink) for two meals and make a donation to help the poor in our area.

Monthly Bills

Mortgage – $0 We are excited to not have a mortgage payment… someday.  Unfortunately that isn’t the case yet!  We actually just refinanced our house again, which is why we don’t have a payment in December.  Mike will share a complete post with all of the details soon.  Even though we didn’t make a regular mortgage payment, we put a good chunk toward our mortgage this month, which I’ll cover down in the goals section of this post.  Our new mortgage payment will be $2,781 instead of the $3,454 that it used to be.

Electricity – $386 Our electric bill covers both our home and our Airbnb rental.  Last year at this time the rental was still using propane for heat, so this year’s winter electric bills are higher than the corresponding month the year before.

Car Insurance – $100 Now that we just have two cars instead of three, our insurance is lower.  It’s not actually this low as this is prorated from the month previous where we had paid for insuring three vehicles and one didn’t make it through the entire month!

Internet – $65 We still remember what life was like when we moved into our new house and it took six months (and $5,000) to get internet access.  We are so grateful to have an internet connection right here in the comfort of our home.

Water – $60 Our water bill comes every other month and varies.  This is what we needed to pay in addition to the $60 we had set aside in last month’s budget.

Trash – $37 Our garbage collection bill comes every other month, so we set aside half each month.

Cell Phone (Steph) – $22  Whenever I share my budget on Instagram I have approximately a zillion people ask me how my cell phone is so inexpensive.  They don’t know that I spill the beans here every month.  Republic Wireless offers a unlimited calls and texts and 1 GB of cell data for $20/month with no contract.  Mike and I each have a Republic Wireless phone, but his is a business expense, so never shows up here. The nice thing about Republic Wireless is that any time you’re in wifi range, the phone uses wifi for both calls and data, so we rarely get close to the 1GB data limit.

Another great option 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.  You can get data for a lot less than Republic Wireless.  Because we have no cell signal at our home, we use Republic and its wifi calling, but Mint Mobile looks like it’s worth looking into if you want a cheaper cell phone bill and you have a good cell signal where you spend your time!

Home phone – $5 Since Mike works at home a day or two each week, we have a home phone for him to use. It’s also handy for the older kids to be able to call us when they are babysitting at home.  It’s through Ooma, which is internet-based, not a traditional land line.  The monthly bill is a minimal $4.50 and the initial set-up (hardware, etc) was under $100.  If you want to give Ooma a try, that link should also get you a $20 credit (let me know if it’s not working).

Orthodontist – $61 This new monthly budget category will be with us for the next two years while our oldest has braces.

Everyday Expenses

Food – $462 We kept our food spending pretty close to the $450 that we budgeted at the beginning of the month.

Fuel – $393  Our gas spending wasn’t bad this month, especially considering that Mike is commuting in a minivan after his car was totaled! It helped that he took some days off for Christmas and we didn’t have to drive kids to school over Christmas break.

Houshold Misc – $183 In addition to some normal toiletries, we had to get some parts to fix our clothes dryer which stopped spinning!  Thankfully Mike is handy and resourceful and with a little help from YouTube was able to get it working again.

Clothing – $74 Mike found a couple of pairs of dress shoes in good condition at the thrift store. We also got a few things for the kids.

Animals – $27 Since we stocked up on chicken feed we didn’t need to buy any in December, so we just bought cat food.

Kids’ Activities/School – $210 The two older boys are doing the school wrestling team which is $75 per kid.  This also includes a donation for field trips for our fifth grader.

Allowances – $60 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 tied to chores, as well as all the details of when and how much in this recent blog post.

Sinking Funds

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 future 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 lives in our checking account.  I’m 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 balance unless we’re reconciling the account.  We track our budget categories and spending in YNAB.

Medical/Dental – $300 We used $10 for a copay . Current category balance is $3,842.

Car Maintenance – $300 We spent $0. Current category balance is $2,672.

Christmas – $137 We spent $383 on Christmas gifts in December. Mike just made a return this morning, so about $40 will be coming back to us. Current category balance is $0.

Life Insurance – $75 We paid our premiums in November, so we just started over our savings for life insurance. Current category balance is $150.

Birthdays & Gifts – $40 We didn’t buy any non-Christmas gifts in December.  Current category balance is $139. 

Car Registration & Smog – $40 We didn’t add anything to or spend anything from this category.  Current category balance is $463.

Family Fun Fund – $34 We spend anything here in December. What we added to this category cam from OhmConnect. Current category balance is $514.

Car Fund – $2,982 – All but $63 of this came from the insurance company when Mike’s car was totaled by a deer that jumped out in front of him on the highway.  While this payout might not seem like much to many people, we were cool with it, considering it’s more than we paid when we bought the car used several years ago.  We have a new sinking fund to save up to buy a used Prius for Mike to commute in.  We’re planning to have $10,000 saved by the end of the year.

Investing

Kids’ 529s – $125 I know that $25 per kid per month invested for college isn’t much, but we’re not as concerned about college costs as a lot of people.  Scholarships, grants, loans, and jobs during school worked for us.  We may accelerate this savings later, but it’s not our highest priority right now. You can read about our decision to start saving a little for college in this post.

IRA (Steph) – $500 $500 monthly will max out my $6,000 IRA contribution for 2019.  Mike has about $700 each month deducted directly from his paycheck into a pension fund.

Mortgage Payoff Goal Progress

If you’re new here, our big goal right now is paying off our mortgage.  We want to pay it off in 5 years, even though on paper right now it looks impossible.  You read about our mortgage-payoff goal here and see more of the mortgage numbers here.

We refinanced our house in December with no closing costs!  We did have to put money into the escrow account up front, but a couple weeks after the closing we got the escrow funds from our old mortgage, so that was a wash.   After all was said and done with the transfer of money during the refi and our own additional principal payments, we brought our principal balance down by $2,385.

That brings our totals to:

Current balance (after December 2019 refi and extra principal payment): $313,653

For reference:

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: 13.71%
Percent of 5-year time elapsed (14 mo): 23.3%.  We still have some catching up to do.

The 6-month goal we set for Day 1 of the Frugal Fresh Start Challenge is to put an additional $25,000 toward our mortgage.  It’s a lofty goal, bit it will really help us get back on track.

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 December?

This post contains affiliate links for products or services that we love and recommend.