Real Family Budget Update– February 2021

It’s time to share our February budget update.

We hit a milestone this month with our mortgage payoff goal. We have now paid off over $100,000 of our mortgage since we set the goal 28 months ago.  We are not on track to get it paid off in the five years that we had originally hoped, but we have definitely made much more progress than we would have made had we not set a goal at all.

That’s the great thing about big ambitious goals.  Even if you don’t quite reach them, working toward them gets you way closer than you would otherwise be.

And then sometimes you surprise yourself!  When we our debt payoff goal back in 2013 (which was the birth of this site), the numbers seemed absolutely impossible for us to reach our goal.  We didn’t let that discourage us.  We worked hard and pushed through and we achieved our goal months earlier than we had hoped!

Whatever goal you’re working on now, keep at it!  Don’t get discouraged if your progress isn’t what you had hoped. You can do this!

Okay, let’s get to the budget.  As usual, you can either read about our income, spending, and goals, below, or watch the the video below where Mike and I walk you through our actual budget screen in YNAB.

Income Earned in February – $9,320

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 February, which has all been set aside to use in our March budget. The spending section below shows the money we earned in January and spent in February.

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.

Blogging Income – $1,403 This is my blogging income after expenses have been taken out. This varies greatly from month to month.

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 we 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 February

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

Giving

Tithing – $1,193 We always pay a 10% tithe on our income. This tithing (like all of our February spending) comes from the money we earned in January. 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.

Monthly Bills

Mortgage – $2,369 We re-financed our 15-year mortgage most recently in December 2020 so this is our current monthly payment.  Mike shared all of the numbers and re-fi details here.

Electricity – $351 Our electric bill covers both our home and our rental. Both are completely electric, with no gas or propane.

Car Insurance – $81 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 (a $5,000 investment)!

Water – $80 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.

We used to use Republic Wireless, which costs less, and some readers rave about Mint Mobile’s great service and even lower costs, but neither of those use a network that provides signal at our house.

If you’re paying more than you want for cell service, check out one of these three great and affordable companies: Visible, Republic Wireless, Mint Mobile.

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 with mom off and on.

Everyday Expenses

Food – $503 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, my new online course where I teach all of my strategies.  It will be opening up again soon!

Fuel – $101 We are loving our covid gas budget.  With Mike not commuting and the kids not in school or any activities, we don’t do much driving at all!

Household Misc – $186 We bought a new car seat for our youngest.  We also had the annual payment for our cloud storage plan.  We also purchased other normal household supplies and toiletries.

Clothing – $5 – We actually spent about $30 on clothes, but we had $25 already sitting in this category from a return last month.

Animals – $565 We had an expensive animal month!  In addition to cat and dog food and chicken feed, we also paid for a dog license, rabies shots, and heartworm meds.  This is our most expensive animal month by far!

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.

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 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 $48 on medical/dental.  We are pretty much starting over on this category since we almost completely drained it in 2020. Current category balance is $1,045.

Car Maintenance – $0  added. We decided to stop putting money toward this category for now. We have a nice balance and we’re only driving one car, and rarely, so we don’t have a lot of maintenance to do.  Current category balance is $3,973.

Christmas – $100 added. We didn’t make any purchases for Christmas 2021 in February. Current category balance is $162.

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 $300.

Birthdays & Gifts – $0 added. We spent $29 bought a gift in February. Current category balance is $183. 

Car Registration & Smog – $0 added. We aren’t adding to this category for now. Current category balance is $461.

Family Fun Fund – $30 added. We spent $775 to sign our three oldest kids up for swim team again using this fund (we did the same in 2020 before covid, but the season was cancelled and the money returned).  Current category balance is $0.

Car Fund – $0 added. We were saving to buy a more efficient commuter car for Mike, but since he will be working from home through the end of 2021, we’re pausing the $550 monthly contributions we were making to this fund. We actually borrowed $4,900 from this category to use for a tax strategy we talked about in December’s update. Current category balance is $159.

Preparedness – $50 added. I didn’t do any extra emergency preparations in February. Current category balance is $314.

Home Projects- $200 added. We didn’t spend anything on home projects in February.  The category balance is currently $424.

Garden & Orchard- $1,000 added. We spend $27 in February on some garden supplies. The category balance is currently $1,402.

Investing

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 a little over $700 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 $1,255 of principal in our normal February mortgage payment, and we put $7,000 EXTRA toward the principal as well, that we had set aside in previous months while we waited for our new mortgage servicer to get the payment set up after the re-fi.

Current balance: $262,745

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: 27.6%
Percent of 5-year time elapsed (28 mo): 46.7%.  Yep, we’re behind. It would take about $5,700 in mortgage extra each month for the next three years to meet this goal. We’re considering whether we want to push hard for this or adjust our goal.

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 February?

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