Everything we spent and earned last month- February 2024 Family Budget Update

Every month we share our family’s real budget with you in an effort to break the taboo about money and help you see how a budget can help you reach your financial goals.

When we started openly sharing our finances on 2013, we had six figures of student loan debt. Through hard work and diligent budgeting, we paid off our debt less than three years later.

We didn’t stop budgeting when we became debt free.

Quite the opposite! As a well-oiled frugal budgeting machine, we tackled one financial goal after another.

If you have financial goals, you should budget. If you don’t have financial goals, you should make some! I bet it won’t be too hard to think of what those goals would be. It’s just a matter of vocalizing them and committing to start. The time will pass, whether you have financial goals or not.

Budgeting just to budget isn’t very fun, but budgeting to reach financial goals is super motivating!

Okay, let’s dive into our family’s February 2024 finances!

Spending in February

When we first understood the concept of living on last month’s income, it rocked our financial world in the best kind of way. If you don’t know what I’m talking about, this video will tell you all about living on last month’s income and how life-changing it is. Or you can read this article on how you can get started.

At the beginning of each month, we start budgeting by first adding up the income we earned the month before. In February, we budget and spend what we earned in January. We knew on February 1st exactly how much money we had to work with during the month. So on February 1st, we start the February budget by taking everything we earned in January and assigning it to our February budget categories.

We can’t see the future, so on the first of February, these dollar assignments were really just best guesses and goals. We’ve been doing this for years, so we have a lot of history we can rely on, but every month is different. Our dollar assignments at the beginning of the month almost never stay exactly the same because our needs and priorities often change during a month.

It’s normal for our spending plan to change during the month. The important thing isn’t spending exactly how much we had guessed at the beginning of the month. It would be silly to let our February 1st guesses dictate what we can and can’t do all during the month. The important thing is to not spend more total in February than we earned in January.

If we need to spend more in one budget category than we had originally assigned, that money has to come from some other budget category. We revise the budget categories to meet our priorities during the month, but we can’t just add more money to all of them, because the total amount stays the same all month long. A changed budget is not a failed budget. A budget needs to be flexible in order to be successful!

Here’s our family’s final February spending for all of our budget categories.

Giving

Tithing – $1,154 We start out the month paying a 10% tithe on our income. Like all of our February spending, our tithing is calculated on what we earned in January. You can see January’s Budget Update here. We often get questions about this. You can read our thoughts on tithing here.

Fast Offering – $100 Each month we take one day to go without food and drink (fasting) and contribute to a program that helps people who need it.

Refugees Misc – $831 February was pretty epic for the Ukrainian refugee family that we took in. The mom got her drivers license and bought her first car! She saved up $3,300 for a used car. We covered the prepurchase inspection, DMV title and registration, and some initial maintenance work that it needed.

Monthly Bills

Mortgage – $2,823 We have a 15-year mortgage on our 2200 sq ft house in Northern California. We’re so thankful to have locked in our mortgage interest rate at 2.375% when we refinanced in December of 2020 (all of the details and numbers are here.) We currently have about $175,000 remaining on our mortgage.

Electricity – $6 Last year we installed solar panels on our property, a $70,000 investment that we just finished paying for recently. For part of the year we produce more than we use, so we will also have some credit toward our bills in the winter when we won’t produce as much because of the shorter, cloudy days. Our electric bill is just the $6 unavoidable fee.

Car Insurance – $226 Our car insurance went up a little more this month because we got a small car for our Ukrainian refugee family. They paid $3,300 for the car, but for right now it is on our insurance. Right now we have 4 vehicles on our insurance.

Internet – $70 We have cable internet through Comcast. When we bought our home six years ago, we invested $5,000 into getting cable internet brought to our property. It has been well worth it every single day since then.

Water – $75 Our water bill comes every other month, so we set aside half of what we expect the bill to be.

Garbage- $52 Like the water bill, our trash pick-up bill comes every other month, so each month I set aside the money for half of the bill.

Cell Phones – $187 We pay for seven cell phones: four for our family, and three for the Ukrainian family that we sponsor. They are all through Visible. Visible is a Verizon subsidiary that offers no-contract plans with wifi calling, unlimited cell calls, and unlimited data on the Verizon network. We’ve been using them for years. You can’t beat paying just $25 per phone each month with unlimited data.

Music – $0 Our music teacher generously offered his time and talent to teach our 11-year-old Ukrainian girl free of charge. What a blessing!

Everyday Expenses

Food – $727 We eat at home almost exclusively; we don’t go out to eat or get takeout. We keep a well stocked pantry and freezer, as well as long term food storage. Our grocery spending is just for our family of 8 because the Ukrainian family receives income-based food assistance now.

If you need help getting your grocery spending under control, you can learn all about my strategies and method in my Grocery Budget Hero online course. Get $20 off with the coupon code STARTNOW. That puts your total cost at $39. I promise you’ll earn that back many times as you build your grocery budget hero skills.

Fuel – $767 Right now gas is $4.59/gallon at the cheapest spot.

Household Misc – $274 In addition to normal household necessities, I had to buy some things for the snow campout that our boys went on, like headlamps, tarps, hand warmers, etc.

Clothing – $279 – Our boys went on a snow campout in February. It’s been a couple of years since we’ve done anything extreme in the snow, so none of our snow gear fit. I found three pair of snow pants and a few winter coats at the thrift store. I also bought new wool socks for the three boys. A couple of the kids are also participating in a dance festival that requires some specific clothing.

Animals – $128 We bought cat food, dog food, and 4 bags of chicken feed.

Allowances – $130 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.

Sports – $0 In February we paid for summer swim team, but I usually categorize that in the family fun fund since it’s a sinking fund and it usually takes more than a month of saving.

Sinking Funds

For our normal budget categories above, we take out any funds that are still left at the end of the month and send them toward our big financial goal. For example, if we started the month with $600 in our groceries budget category, but only used $520 of that, the other $80 would go toward our current major financial goal. Focusing all these extra funds from each category into one goal helped us pay off our solar panels several years early.

In contrast to the regular budget categories described above that we zero out each month, we also put money into the categories below. These are our sinking funds. Our sinking funds are categories where we set aside money for periodic expenses each month and let it roll over and build up until we need it.

The amount in bold is the amount we added to the fund this month, followed by spending notes and the current balance of each fund.

To answer a question we often get, we do not have separate bank accounts for these funds. We had separate accounts many years ago when we first started budgeting but we learned that was overkill. Instead, all of the money sits in our checking account. Since we spend according to our budget category balances, not our checking account balance, we’re not worried about getting the money mixed up. 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, a budgeting tool we absolutely adore. Yes, you can adore a budgeting tool. Don’t believe me? Try it out. If you have been using Mint or something similar to manage your finances, you’ll want to read about our switch to budgeting with YNAB.

Medical/Dental – $300 added. We had a couple of hospital visits in February (like I mentioned in this post), but we haven’t seen the bills for them yet, just $52 for a couple of office co-pays and some prescriptions. Current category balance is $1,793.

Car Maintenance – $400 added. In February, we spent $105 from this category, though it was actually on CarFax reports for potential used cars. Current category balance is $1,121.

Christmas – $200 added. We didn’t spend anything for Christmas 2024. Current category balance is $404.

Disability Insurance- $190 added We set aside each month for disability insurance so that when the annual premium is due we have the money ready. If Mike is unable to do his work as an attorney due to illness or injury, this disability insurance will replace about 60% of his current income. Since our income potential is our greatest financial asset right now, we want to have disability insurance to help us protect it. Current category balance is $2,117.

Life Insurance – $100 added. Our life insurance premiums are due each November, so we set aside a portion of the estimated total each month which will go toward next year’s premium. We had a $73 remaining after paying last year’s premiums. Current category balance is $373.

Birthdays & Gifts – $50 added. We spent $8 in February for gifts. I keep a gift stash at home which comes in handy when the kids go to parties. Current category balance is $72.

Car Registration & Smog – $50 added. We spent $0 in February. Current category balance is $52.

Family Fun Fund – $300 added. We spent $1,165 paying for summer swim team for most of the kids. Current category balance is $88.

Home and Garden – $100 added. We didn’t spend anything here in February. Current category balance is $100.

2025 Trip – $975 added. We have top secret plans for a family adventure in 2025, so we made a separate budget category for it. We’re aiming to add $500 each month either through our normal budget or other means. In February, all of the money added to this category came from credit card points ($75) and bonuses from opening a Chase business credit card ($900). Want to do this too? Here is the link to get a sweet bonus for opening a Chase Business Credit Card. You can get a $300 bonus for opening a Chase checking account online and set up direct deposit within the first 90 days. Or you can open a Chase business checking account and get $400. Current category balance is $2,742.

Investing

Kids’ 529s – $150 added. Investing just $25 per child per month for college isn’t much, but we are okay with that. Neither of us had much college savings when we went to college, but with scholarships, grants, loans, and jobs during school we were able to get our undergraduate degrees without debt. We may contribute more later, but right now we’re happy with small, consistent contributions. I looked at the balances recently and was please to see that this small contribution that is barely noticeable in our monthly budget has added up to over $15,000! If you want to know more you can read about how we decided to start 529s for our kids.

IRA (Steph) – $583 added. With this same amount each month, I will reach my $7,000 IRA contribution for 2024. Mike has about $1,300 each month deducted directly from his paycheck into the state pension fund for his retirement.

New Goal!

Since we finished paying for the remainder of our solar installation back in November, we have a new financial goal!

We will need to replace one of our vehicles (our minivan that seats 8) soon, so saving for that will be our new goal! We are setting our goal at $20,000 for now, though we may choose to go with an older van, which would be less expensive. The most we have ever spent on a vehicle is $5,500 (a 2007 Odyssey that we bought in 2019), so $20,000 sounds like a lot!

In February, we set aside $527 for our new van fund. With our total of $1,327, we are 6% of the way to our goal of $20,000.

Income Earned in February- $16,050

Above you can see everything we spent in February (that we had earned and received in January.) At the same time we were spending what we earned in January, we were also (of course) earning money during February. At the beginning of March, we set up our budget to allocate spending from our February income.

This concept of getting a month ahead, has made such a huge impact on our finances! It takes some work to get to the point where you are living on last month’s income, but the effort is completely worth it!

The income section below shows the money we earned in February, which we didn’t touch until March.

Attorney Income – $9,852 Mike works as an attorney for the state of California. This is his take-home pay after taxes, social security, his pension contribution, and health insurance premiums.

Rental Income – $0 For years we rented out a one-bedroom apartment on our property through Airbnb. We gave that up to take in a Ukrainian refugee family for a couple of years. We loved Airbnb and will likely go back to that in the future. If you’re thinking about renting out your space on Airbnb, check out Mike’s post about dealing with insurance for your Airbnb rental or our explanation of how we handle our Airbnb finances.

Law Firm- $6,198 Before working for the state, Mike did estate planning and business transactional work. Over the last few years he has had a steady stream of potential clients, most of whom he refers to other attorneys, but he still occasionally helps former clients. He doesn’t cut himself a paycheck each month, just a couple of times a year.

Blog – $0 I only pay myself a couple times a year now. My blogging income took a major hit when I put the blog on the back burner during Covid to start homeschooling my kids. It is slowly recovering as I put more effort into posting regularly and all of the things I do behind the scenes. Thankfully the income still covers my fixed blogging expenses (which are a lot more than most people would guess) and allows me to pay myself a few times a year.

At the beginning of April come back to see how we use this income to fund March’s budget.