Real Family Budget Update– October 2019

October’s budget was a doozie! If you read my last post, you know what I’m talking about. We had $1,000 of unplanned spending thanks to California’s new strategy for fire prevention. For 7 days of the month we were without electricity (and cell phones and internet).

Since these Public Safety Power Shutoffs are supposed to be the new normal for the next 10 years, and especially because most Airbnb guests won’t appreciate being in the dark during their stay, and even more especially because I’ll be having a baby any day now and really would appreciate being able to use my cell phone if I go into labor during an outage, we bought a generator and a backup battery. I’ll talk more about the details below and how we handled this big unexpected expense.

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!

Before I get into our numbers I want to remind you to report your October progress in our community Debt Smash-athon by November 10th!  As soon as you finish reading here, go to the October Debt Smash-athon reporting form to let us know how you did. You’ll get entered for the monthly prize!

Remember, for the Debt Smash-athon we’re counting your debt paid, your contributions toward retirement, and/or your saving for a big goal! Please report even if you don’t feel like the month was a big financial success. It’s important to have a real reflection of both our good and our bad months, not just a summary of all the people who rocked it this month.

I’ll summarize our progress as a group and post it here when I get all of the submissions in. If you’re not already receiving Debt Smash-athon updates, sign up here.

—On to the numbers!—

Income Earned In October – $11,646

We live on last month’s income. If that doesn’t mean anything to you, check out the new video explaining how this changed our lives or the new post explaining how we got to that point. The income section shown here is the money we earned in October, which has all been set aside to use in our November budget. The spending section below shows the money we earned in September and spent in October.

Attorney Income $6,342 – 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 $3,061 – My blogging income really fluctuates.  My blog income has been down in recent months, so this month looked much better.

Airbnb Income $2,244 – Our Airbnb income was higher than normal.  We were booked all but about 4 nights.  This amount includes one booking that started in October but extends into November.  Because of the way Airbnb pays out, we receive the whole amount for that booking in October.  That means October income is high, but November income will be lower. 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 October

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

Giving

Tithing – $945 We always pay a 10% tithe on our income.  This tithing (like all of our October spending) comes from the money we earned in September.  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 – $3,454 Our mortgage payment includes homeowners insurance, property taxes, and a small amount of PMI.  We have a 15-year mortgage, but our big goal is to pay it off in five. We’re not quite on track right now, as you’ll see in the goal section down below.  We’ll keep working on it. If you’re a numbers person, or are looking at mortgages yourself, Mike answers a series of questions about how and why we refinanced, including all the numbers involved in the decision.

Electricity – $295 This bill covered the electricity used in September.  Our house and our rental share a meter and both are completely electric– no natural gas or propane.  Thankfully the weather has been pretty temperate. I don’t think we used our air conditioning at all during the bill cycle, which is probably why this bill was over $100 less than last month.

Car Insurance – $239 Our insurance is higher than normal because we still have three cars insured instead of two. We were hoping to be back down to two vehicles soon.  It’s complicated. 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 – $60 Our water bill comes every other month and varies, but we try to set aside half of what we expect the bill to be.

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, 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 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).

Everyday Expenses

Food – $491 Our food spending was higher than we had planned this month. You can see our monthly grocery haul here.

Fuel – $534  Gas here has been right around $4/gallon.  In addition to the gas for our vehicles, we borrowed a generator from friends (whose power wasn’t out) for the 7 days in October that we didn’t have power (for more on that, see my last blog post).

Houshold Misc – $1,309 We budgeted $200 at the beginning of the month, but after 7 days of not having power, we bought an inverter generator and a backup battery to run our electronics.  Between both of them, we will be able to run our fridge and freezer and the rental’s fridge, as well as keep our internet (crucial for our cell phones) and computers running. (Read more about this in my post about Public Safety Power Shutoffs here) After pooling together all the excess in our budget categories and the extra we had planned to put toward our mortgage at the end of the month, we still came up $500 short.

We covered that $500 using October’s income.  Normally all of October’s income would wait to be budgeted in November, but for this special circumstance we made an exception.  Thankfully October’s income was higher than in recent months, so having $500 less in November won’t be that noticeable.  If you want to see how we work this in YNAB, be sure to watch this month’s budget update video, as I show exactly how I do it.

Clothing – $0 I put whatever money I had budgeted for clothing toward our generator (household misc).

Animals – $41 We bought two bags of chicken feed and 1 bag of cat food.

Kids’ Activities/School – $20 We had one school activity with a cost in October.

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 – $400 We had one $10 doctor copay and a $500 downpayment for orthodontic work for our oldest.  For the next 2 years we will have a category for $61 monthly orthodontic payments. Current category balance is $3,177.

Car Maintenance – $300 I love months with no spending on car repairs! Current category balance is $2,086.

Christmas – $0 We spent $101 on Christmas gifts even though we didn’t contribute to this category in October.  Current category balance is $509.

Life Insurance – $5 At the beginning of the month we put the normal $75 in this category, but after paying our annual premiums, we only needed about $5 more than what we had previously saved! So we put the remaining $70 toward the generator (household misc). Current category balance is $0.

Birthdays & Gifts – $0 We didn’t add our normal $40 to this category, but did spend about $60 between a birthday gift, future birthday gift, and clearance Halloween candy that will be used for a future birthday pinata.  Current category balance is $164. 

Car Registration & Smog – $0 We didn’t add anything to or spend anything from this category.  Current category balance is $383.

Home Projects – $0 After buying the last supplies for our new clothesline, we emptied out the remaining $297 from this category to put toward our generaor (household misc).  We spent $105. Current category balance is $0.

Family Fun Fund – $0 We didn’t add anything to this category in October, but we spent $53.  We attended the school harvest festival fundraiser. Current category balance is $479.

Investing

Kids’ 529s – $125 I know that $25 per kid per month invested for college looks piddly, 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. 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.

Our normal October mortgage payment of $3,454 includes principal, interest, property tax, homeowner’s insurance and PMI.  Of that, $1,714 went to principal.  In addition to the normal payment, we paid an additional $500 of principal. 

That brings our totals to:

Current balance (after October 2019 payments): $319,759

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: 11.95%
Percent of 5-year time elapsed: 20%.  We have some catching up to do.

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 October! 🙂

How About You?

• How did your budget and/or debt repayment go in October?
• Any big plans for November?

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