Real Family Budget Update– January 2020

Whew!  After posting 28 blog posts and 28 videos since the beginning of the year, I’m a week late getting January’s family budget update published.  If you missed all the activity, you can you can sign up for the Frugal Fresh Start Challenge here!

If you’re new here, every month we make our personal finances public by sharing everything we earn, spend, save, and pay toward debt (we’re currently tackling our mortgage).  We’ve been doing this since September of 2013 (when we were in six figures of student loan debt) and haven’t missed a month!

Our hope is that getting an inside look at one family’s way of budgeting will give you ideas on how you can make budgeting work in your family.  Of course everyone’s means and priorities are different, so no two budgets will look alike.  We’re happy to answer questions about why we do things the way we do and we hope that you’ll be inspired to start (or restart, or continue) your own budget!

By popular demand, the Debt Smash-athon is back in 2020!  If you’re working on paying off debt this year we would love to have you join us!  If you’ve got savings goals instead of debt, you’re welcome to join in too! You can report your January debt payoff (and savings) progress right here!  Participants in 2019 raved about how the Debt Smash-athon kept them motivated and accountable to make progress toward their financial goals.  I hope you’ll join us at the Debt Smash-athon too.

Let’s jump into the numbers. 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 January – $10,903

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

Attorney Income $6,553 – 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.

Blogging Income $3,166 – My blogging income really fluctuates but I am really grateful that I’m still earning money from the long hours I put in back in the beginning.

Airbnb Income $1,184 – 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 January

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

Giving

Tithing – $1,147 We always pay a 10% tithe on our income.  This tithing (like all of our January spending) comes from the money we earned in December.  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 – $2,781 This is our first payment on our newly refinanced mortgage.  Mike will share a complete post with all of the details really soon.

Electricity – $480 Yowsers!  This was our highest electric bill ever.  Our electric bill covers both our home and our Airbnb rental.  This is the first winter since we replaced the propane furnace in the rental with an electric heater, so that probably has something to do with it.

Car Insurance – $170 We have our two vans on our insurance.  We have been so impressed with the service and coverage that USAA provides as both a bank and an insurance company. We’re able to join USAA because my father-in-law was in the service years ago.  If you, your parent, or your spouse were/are in the military, you’re probably eligible for USAA too!

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 – $104 Our water bill came and was way more than we anticipated.  Rates went up and so did our usage.  The bill comes every other month so we set aside half of what we expect the bill to be.  We had $60 set aside last month and we needed  another hundred to cover the bill.  Yikes!

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 share all my secrets 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 Since our oldest gets her braces adjusted every other month, we chose to treat this as a monthly bill rather than pay it all up front.  These payments will last for the two years that she has braces.

Everyday Expenses

Food – $102 On Day 2 of the Frugal Fresh Start Challenge, we set a goal of just spending $25 per week on groceries, so January was basically a pantry challenge month. And we did it! But we were really excited for February’s monthly grocery haul (which I’ll be posting soon)!

Fuel – $387  It’s always exciting to spend less than $400 on gas for the month.  If you’re new here, Mike commutes an hour each way to work.

Houshold Misc – $386 January was an expensive month for our household misc category.  If you watched our Frugal Fresh Start series, you heard about our kitchen faucet drama in this video and our new laundry system in this video.  In addition to those expenses, we bought new toner for our printer and regular toiletry items.

Clothing – $29 We bought a few things at the thrift store, ThredUp and online in January.

Animals – $61 We bought three bags of chicken feed and one bag of cat food in January.

Kids’ Activities/School – $75 At our schools, every sport is $75 per child. We had one starting basketball in January.

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 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 sits 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 – $400 Our medical bills from the birth of our new baby have been trickling in.  Mike has been keeping track of everything and getting those bills organized and paid.  We spent $489 in January. Current category balance is $3,754.

Car Maintenance – $300 We didn’t spend from this category in January. Current category balance is $2,972.

Christmas – $100 We spent $68 on various after-Christmas clearances items for next year, including matching family PJs for next year. Current category balance is $32.

Life Insurance – $75 Our premiums aren’t due until November, but if we put aside $75 per month we should have them covered. Current category balance is $225.

Birthdays & Gifts – $40 We didn’t spend anything on gifts in January.  Current category balance is $179. 

Car Registration & Smog – $40 We didn’t spend from this category in January.  Current category balance is $503.

Family Fun Fund – $0 We didn’t spend from or contribute to this fund this in January. Current category balance is $514.

Car Fund – $550 – 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.  He’s been driving our second van (the one we were going to sell after we bought our 8-seater) ever since his car was totaled by a deer. Current category balance is $3,532.

Disability Insurance – $200 – Mike has been looking at policies for the past couple of months, but is still waiting for another quote.  I had tentatively set aside this money not knowing for sure what our payment would be.  I decided to leave it in this new category for now.

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 some 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 2020.  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.

In addition to the $1,439 of our normal payment that went toward principal, we also had $2,070 in additional principal payments

That brings our totals to:

Current balance (after January 2020 payments): $308,697

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: 15%
Percent of 5-year time elapsed (15 mo): 25%.  We hope to do some catching up in the next few months.

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 by June 30th).  So far we have put $2,070 toward that 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!

If you haven’t already done so, take a sec and report your Debt Smashing progress for January! 🙂

How About You?

• How did your budget and/or debt repayment go in January?

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