Real Family Budget Update– March 2020

I’m sure it goes without saying that March was a crazy month.

Since March 16th our whole family– all eight of us– have been home all day every day.  Mike is working from home.  The kids are schooling from home.  Pretty much everything on our calendar for the next three months has been erased.  Fortunately we are healthy and well.  We’re actually enjoying the slow down and the time together, but our hearts break for all who are experiencing huge losses and devastation right now.  We are praying for you!

The impact of covid-19 didn’t really hit our budget too badly in March.  As you’ll see below, the only real effect was a little more spending on food, but that will balance with the coming months when we spend little to nothing on food.  If you missed the recent post, we are not going to the grocery store anymore (and haven’t for several weeks already) and are focusing on eating from our long-term food storage.

Every month we make our personal finances public by sharing everything we earn, spend, save, and pay toward debt.  We’ve been sharing our finances 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 income and priorities are different, so everyone’s budget should be different too.  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!

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 March debt payoff (and savings) progress right here!

Let’s jump into the numbers. If you want to see everything in our actual YNAB budget, check out the video below!

Income Earned In March – $22,241 (includes tax refund)

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

Attorney Income – $6,716 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.

Attorney Private Practice – $4,362 Mike built up a private law practice back when we were working hard to pay off student loan debt, but has been in the process of finishing up work with those clients for a while now.  One of the matters he has been working on (literally for years) just finished up and he got paid for it.

Blogging Income – $1,434 My blogging income fluctuates a lot, but I am really grateful that I’m still earning money from the long hours I put in back in the beginning.

Airbnb Income – $1,565 We’re thankful to be able to earn extra income by renting out the one-bedroom apartment on our property.  We had some cancellations because of covid-19 in March, but the pandemic will mostly affect our earnings going forward.  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.

Tax Refund – $8,164 We way overpaid in taxes in 2019.  We earned less business income for both of our businesses in 2019.  We kept the same withholding as 2018 because we planned on growing the blog income.  When I found out I was pregnant a couple of months into the year, plans changed and the blog to a back seat to growing a sixth baby to join our family.

Spending in March

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

Giving

Tithing – $1,041 We always pay a 10% tithe on our income.  This tithing (like all of our March spending) comes from the money we earned in February.  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 newly refinanced mortgage.  Mike just published all of the details and shared our experience with a true no-cost mortgage re-fi.

Electricity – $323 Our electric bill covers both our home and our Airbnb rental.  We haven’t been using our central heat this year, just our wood stove and/or bundling up.  Thankfully it doesn’t get too terribly cold here.  The rental, on the other hand, has electric heat which is used whenever our Airbnb is booked, which is nearly all the time (well, until now).

Car Insurance – $165 This covers our two minivans.  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 are grateful to have an internet connection right here in the comfort of our home.  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.

Water – $101 Our water bill keeps going up!  We got official notice that our rates will be rising steadily over the next five years, so this will likely get even higher!

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

Cell Phone (Steph) – $22  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 (for just a little longer), 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’re treating this as a monthly bill rather than paying it all up front.  These payments will last for the two years that she has braces.

Disability Insurance- $151 We have been talking about getting disability insurance for Mike for years, but we finally did it in February.

Piano – $110 Our oldest started taking piano lessons from a teacher who isn’t me and it’s going really well.  The last few weeks she’s had socially distant lessons via Zoom.

Everyday Expenses

Food – $594 At the beginning of the month (before the pandemic hit here) we did our normal monthly grocery shopping.  Since we had no clue what was in store with covid-19 we just did our normal monthly shopping where we stock up on what we’re low on.  Now that we’re officially living off of our food storage, there are definitely some things I wished I had stocked up on even more.  In addition to our normal monthly shopping I made a few trips to Grocery Outlet and some things from Sam’s Club (before we decided not to go to the store anymore), which is why our grocery spending is so high.  Mike also went out to eat once with co-workers.

Fuel – $309 This is about one hundred dollars less than gas in February, but wait until you see next month’s gas spending.  We’re aiming for a big fat ZERO in April!

Houshold Misc – $416 We spent a lot in the household category this month.  I ordered a box of commercial toilet paper (the kind where each roll is wrapped in paper) online from Sam’s Club a few days after my grocery haul. I also stocked up on AA and AAA batteries from Sam’s Club (not pandemic related, but we were out/running low).  I bought a big box of diapers and wipes from Walmart.  We cloth diaper, but use disposables at night.  We bought a larger memory card for my phone.  We bought toothpaste for everyone (between the 7 of us with teeth, we use three different kinds of toothpaste). I also bought some fabric so I could work on some quilting projects while staying home.

Clothing – $5 We stopped by the thrift store on half-off day (first Saturday of the month) and got a couple of things for the kids.

Animals – $150 We bought 2 bags of dog food, 2 bags of cat food, and 4 bags of chicken food.

Kids’ Activities/School – $0 We anticipated paying for some spring sports, but with school cancelled, that didn’t happen.

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 – $300 We paid $1,870 in medical bills this month, all bills that we finally received from last year.  About $875 was for the birth of our new baby back in November. About $950 was for two separate emergency room visits for our 2-year-old.  Current category balance is $2,462.

Car Maintenance – $250 We spent $80 to have the Odyssey looked at because it was smelling funny. Apparently there is a hard-to-get-to fluid leak.  Right now we’re not doing anything about it. Current category balance is $2,984.

Christmas – $80 We didn’t do any Christmas spending in March. Current category balance is $212.

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 $375.

Birthdays & Gifts – $40 We spent $31 on things for a birthday party that we hosted.  Current category balance is $148. 

Car Registration & Smog – $40 We didn’t spend anything here.  Current category balance is $457.

Family Fun Fund – $0 We didn’t add to or spend from this category in March. Current category balance is $17.

Car Fund – $500 – 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 $4,582.

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 financial goal right now is paying off our mortgage.  We want to pay it off in 5 years. It looks kind of impossible on paper right now, but we’ll figure it out. You read about our mortgage-payoff goal here and see more of the mortgage numbers here.

In addition to the $1,458 of our normal payment that went toward principal, we also had $1,000 in additional principal that we paid at the beginning of the month.  By the end of the month, even though we had some unused cash, we decided to put a hold on paying extra on our mortgage while we wait out these uncertain times.

That brings our totals to:

Current balance (after March 2020 payments): $304,092

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: 16.27%
Percent of 5-year time elapsed (17 mo): 28.33%.  Yep, we’re behind!

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 $5,216 toward that goal. Let’s hope the covid-19 pandemic and economic disaster resolves quickly so we can have a chance at reaching this 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 March (even if it’s zero)!

How About You?

• How did your budget and/or debt repayment go in March?
• Are you changing your financial plans in light of the pandemic?

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