Happy 2018, friends! I’m excited for the new year! I’ve been a little absent here lately because of 2017’s adventures (new house… no internet, new baby… no sleep etc), but I have lots of plans for Six Figures Under in 2018!
As I mention below under the grocery category, in the new year I’m planning to give you some more insight into what I buy and what I cook on a $300-$400 grocery budget. I want to do both videos and blog posts to show you how we manage to eat well without feeling deprived on a low grocery budget. Please let me know any questions you have in the comments.
We had a wonderful Christmas this year! I must say that my favorite part of Christmas morning (besides that the four of us who were throwing up on Christmas Eve all felt better) was seeing the gifts my kids gave and received from one another. They each gave from what they had, gave generously and willingly, and were gracious and genuinely thrilled with what they received from one another. It warmed my mother heart!
Okay, onto the numbers from December 2017!
Income
Our total income for December was $10,584. Since we live on last month’s income, this is money that we’re waiting to spend in January.
Attorney Income (Day Job)– $6,215 Mr. SixFiguresUnder has been working full-time as an attorney for the state of California since the fall of 2015. His actual take-home pay was $5,021 but I add back in the cost of the benefits (insurance, dental, vision, parking, union dues and retirement) that are automatically taken out of his check so that you can see what happens to the money that never makes it home.
Attorney Income (Private Practice)– $1,847 On top of working full-time, my husband has a part-time private law practice on the side. He started it to help speed up our debt payoff and because he had clients from his days at a small firm that didn’t want to let him go. This income fluctuates greatly from month to month.
My Income (Blog)– $2,522 The income that I report is the income that I received this month minus all of my blogging expenses. Of this, I normally set a percentage aside for self-employment taxes to cover the estimated quarterly payments for both of our businesses, but after meeting with our tax guy we learned that we have already paid enough for taxes this year (we’ll probably be getting a refund, too), so I distributed the entire amount to the family checking account.
If you’re a blogger (even if you’re just getting started), you should check out my Blog Finance Spreadsheets. They really make keeping track of my blog income and expenses really easy (and, I daresay, fun!).
Spending
Each month we budget down to zero using last month’s income. When we started doing this, it literally changed our lives! For more about how living on last month’s income works and how you can get started, check out my free Guide to Getting a Month Ahead Financially.
Our spending in December came from the income we earned in November. Here’s how we spent money in December.
Tithing– $785— We happily pay a 10% tithe on our total income from the previous month (November). You can read more about why we paid tithing, even when we were in debt.
Other Giving– $1,090– Other giving this month.
Mortgage/Rent– $2,500 Our actual mortgage is just under $2,500, but I like paying a little over to make a nice even number. Curious about our mortgage? You can read more about why we got a conventional mortgage instead of FHA or USDA and then why we didn’t wait for a 20% down payment.
Electricity– $272 I was a ittle shocked by the $100+ increase in this month’s utility bill, especially since we have been using our wood stove to heat the house instead of our central heat. Hubby and I were discussing it though, and with the shorter days we have the lights on more, we’re baking more, we’re using the dryer instead of the clothesline, we have an additional fridge now and a desktop computer with two monitors that he uses when he works at home two days a week. All that together has contributed to the increase in electric use.
We have been really motivated by the OhmConnect program which lets you earn extra money for saving power. My kids think it’s super fun to save power now. If you’re in California, Toronto or Texas, you should definitely check it out!
Water– $45 Our water bill comes every other month, so I just set aside approximately half of what I expect the bill to be (or what it is).
Trash– $32 Our bill for trash service comes every other month, so I set aside half of the bill each month. We’re currently paying for curbside pickup, but that’s not the only way to do it. If you’re trying to cut every expense to its bare minimum, here are some ideas to save on trash service.
Internet– $50 After surviving so long without internet, I’m thrilled to be paying an internet bill (and a nice low one too)! It’s been months now, and we’re still oozing with gratitude to have internet access in our very own home. We won’t quickly forget what it’s like to go without it.
Home Phone- $4 Since my husband works at home a day or two each week, we decided to get a home phone for him to use. It’s Ooma, which is internet-based, not a traditional land line. The monthly service is minimal and the set-up (hardware, etc) was under $100 (and my link will get you a $20 Amazon gift card on top of it!).
Republic Wireless Cell Phones– $13 We’ve been using Republic Wireless as our cell phone carrier for over three years now. This covers the cost of service for my phone, including all taxes and fees (we’re on the Republic Refund plan). My husband also has a Republic phone which he uses for his private practice, but that’s a business expense, not a family budget expense. If your cell phone bill is killing you, I definitely recommend that you check them out!
Health Insurance– $408 We have insurance through my husband’s employer. This is the portion of the insurance premium that his employer does not cover. It includes health, dental and vision insurance premiums and comes straight out of his paycheck.
Car Insurance– $140 Our auto insurance at USAA is fabulous! In addition to the wonderful coverage, they also give us dividends at the end of the year, which is always a nice treat. We’re able to get insurance with USAA because my father-in-law was in the service years ago. If you, your parent, or your spouse were in the military, you’re probably eligible for USAA too!
Food– $369 Last month was high for us ($500), so I tried to keep the grocery budget under control in December. Many of you have asked how we manage to keep our grocery budget low with a family of 6 (well 7, but the baby just nurses) and I plan to share more detail about this in the coming year with some videos and posts of what I actually buy and what I actually make. Please let me know any specific (or general) questions you have so I can be sure to address them in future posts. 🙂
Gas– $302 This was a little lower since we didn’t drive much during the last week of December.
Parking– $155 Working downtown means paying for parking. It comes straight out of my husband’s paycheck, which means it is paid for with pre-tax dollars, a small consolation.
Clothing– $18 I bought more clothes than this, but I included most of them in the Christmas category.
Household– $227 I think I need to just accept that my household budget needs are higher now than we lived in my inlaws’ unfinished basement. It feels like every month our spending was high, but I think it may just be a new normal. I will admit that some of our transactions from Walmart ended up in the household budget category because I couldn’t remember what I bought and didn’t make the effort to dig up the receipt to itemize the spending.
Fun– $0 Don’t worry, we still had lots of fun this month, just nothing that cost us anything extra.
Kids– $75 Our older son is doing a winter sport at school. Though technically kids can participate without paying, the school asks for a $75 donation per kid per sport.
Home– $451 Like I mentioned in my last post, we invested in some Christmas lights for the outside of our house. That didn’t cost much, but the three 100 ft extension cords was what got us. Man those things are pricey! We bought a chimney brush and rod so that we (and by “we” I mean my husband) could clean our chimney before we started burning in our wood stove. We also bought a couple of coat racks for our entry wall (these are awesome racks for an awesome price and 5 stars on Amazon!) so we would have a place for coats when we hosted a Christmas gathering!
Animals– $61 We bought three 40lb bags of chicken feed and one 44 lb bag of cat food.
Tax Prep– $90 Our tax advice and preparation plan allows the cost to be spread over the year.
Supplemental Property Tax– $258 The property tax that is included with our mortgage doesn’t include the increase in taxes that comes from the reassessment at the sale of a property. California property tax law is a peculiar thing and we don’t need to cover all the details, but in short, when a property changes hands, the property tax bill generally goes up. This wasn’t a fun notice to find in the mail. If we set aside $158 each month, but since we skimped $100 here last month we added in the extra this month.
Sinking Funds
Now that we’re done funneling every extra cent toward debt, we are using sinking funds in our budgeting. This is money that we set aside each month into certain categories where it builds up until we need it.
Dental– $0 We didn’t set aside anything for dental in December.
Medical– $85 We had put $100 into our medical sinking fund this month, but used $15 on an office co-pay. The current total in our medical fun is $175.
Car Repair– $36 We had put $150 into our car repair sinking fund, but used $114 to buy a new battery for the van. It still had its original battery from 2005.
Car Registration & Smog– $20 We put $20 toward car registration bringing the total to $160, but used $96 to renew the registration for my husband’s car, which brought the category down to a balance of $64.
Christmas– $208 In addition to this, we had $37 left in this category from last month. We spent $49 on stamps and $16 on 100 photo cards (an awesome Sam’s Club deal). We also bought teacher gifts, the supplies to make grandparent gifts, and shipping for some handmade gifts to out-of-town family.
Since most of the individual Christmas gifts for the kids were in the need/useful category (boots, robes, pjs, jeans, shoes, clothes, sonicare toothbrushes, lunchboxes, etc), I wanted to get them a fun individual present (the trampoline was for the family). I got them each a special “how to” book along with supplies to use and it was a total hit! They’re loving them even more than I expected.
I got this book for my son (8) who loves to build and invent along with paint stirrer sticks and rubber bands. Whenever it wasn’t his turn to open a present he had his nose in this book! He has already built an awesome catapult.
I got this book for my daughter (9) who wants to learn to do her hair along with a new brush and hair elastics. She has been doing her hair (or having me do it) every day since Christmas!
I got this book for my son (6) who is learning to draw along with a new sketchbook and mechanical pencil.
I got this book for my 2-year-old daughter that she can use over and over along with these painting sheets.
Life Insurance– $70 If we put aside $70 each month, we will have our premiums set aside when they’re due.
Gifts– ($15) I put $30 into our gift fund, but spent $45 for my husband’s birthday in December. The things I got him were honestly things we probably would have been buying anyway, as it’s all safety equiptment for using the chainsaw (which we’re planning to buy in January). I used $70 in Amazon gift cards that I earned from Swagbucks and MyPoints, which covered a good portion of the total cost.
I got him kevlar chaps, kevlar gloves, helmet with faceguard and ear protection, and safety glasses. Not we just have to get the chainsaw.
Retirement– $631 With my husband’s state job, this amount comes directly out of his paycheck and into his state retirement fund.
College Savings– $100 We contribute $25 per month per child to 529 accounts. It’s not much, but it’s a start. More on our decision to start saving for college in this post.
Savings Goals
I’m going to put a saving thermometer in the side bar to track our progress toward our savings goal in 2018. The total we want to save is $26,000 ($15,000 toward our emergency fund and $11,000 to my IRA). Here’s how we’re starting out the year thanks to December:
Emergency Fund
We put $280 toward our emergency fund. The total is at $10,292. Our goal for 2018 is to reach $25,000 in our emergency fund.
IRAs
We did set aside $900 for my IRA. We’re planning to put in the full $5,500 between now and April 15th (for the 2017 tax year). We also want to save the $5,500 for my 2018 contribution. Because my husband has a pension plan working for the state, contributions to his IRA don’t have the same tax benefits as contributing to mine, so we’re just working on mine right now.
How About You?
- I’d love to hear about how your budget and/or debt repayment went in December!
- What are your financial goals for 2018?
- If you have any questions about how we budget, I’m happy to answer them in the comments or in a future post.
I urge you to consider the environmental effects of using a wood burning stove as opposed to your furnace for heat. It is much worse for air quality.
Really interested in seeing what you all eat on that budget!
Wishing you success in your blogging side hustle. Overcoming personal debt is possible with faith and creating lots and lots of content. 🙂
A car battery lasting 12 years is impressive! Mine usually go out after 5-7 years.
If your financial situation doesn’t change too much, have you considered using tax prep software like TurboTax or TaxAct? You would probably pay 1/12th of what you’re paying now. The trick is to make sure you’re taking the same deductions your tax person is giving you right now.
Happy New Year, Stephanie!
I’m super excited to learn more about what you and your family eat on $400/month. We spent $1,350 on food in December, and that really scared me. >_>
I’m absolutely amazed you still make this much on your blog! You have been MIA.
I am amazed too, Isabella! All the time an energy invested into four years of blog content pays off thanks to Google and Pinterest putting old content in front of new eyes.
I coming back from being MIA, though. 🙂 My new year plan is to post every Wednesday (as a minimum) and send a newsletter every Friday.
We were pretty happy with 2017 goals. I finished grad school without incurring student loan debt, we saved 50% in a sinking fund towards an HVAC replacement and $4k towards a car replacement, and we both maxed our Roth IRAs. Our investments did well and we were above where we wanted to be in our retirement goals. I would have loved to put more towards our mortgage, but it just didn’t happen.
I’m so impressed at how you’ve paid for grad school without going into debt and you’re still able to make progress on your savings goals! Way to go Jen!
The smaller the budget, the happier everyone is. It doesn’t take alot of money to be happy.
We have a normal chainsaw, and an electric chainsaw. My husband loves the electric chainsaw. It requires a lot less maintenance than the normal chainsaw, which always needs attention (sharpening the chain, cleaning out the gunk, etc. etc. – Seriously, it takes at least an hour to prep the normal chainsaw before he can use it.) Our electric chainsaw was an $80 Aldi special I got him for Christmas one year, so you can pick them up quite cheaply. You can’t use them for chopping down trees (well, maybe you can, with those honkin’ extension cords you have!) but they’re great for chopping up wood.
I don’t know if we have even considered an electric chain saw. That would put our extension cords to good use, though I’d be worried they accidentally get cut! The main use will be cutting up trees and limbs that are already down. I’ll definitely throw the idea out there. The current plan is to get the Stihl MS 261 C-M on recommendation from my uncle who was a professional tree guy for decades.
2017 was such a big year for you!! I’m always encouraged reading about your progress. We finished our fully funded emergency fund last month. Wahooo!! This year our goals are to save for some much needed big-items we have put off until we paid off our debt and built up our EF. A couch, a new mattress, a riding lawn mower. We also plan on opening our Roth IRA (finally!) and maxing at least one out, opening a 529 for my girls and contributing to that monthly, and starting a new car fund. It will be a big year, but the goals are smaller so we are confident we can get it done.
I’m curious…You write about your sinking funds. Where do you put those/keep them organized? In one account with an excel spreadsheet so you know how much goes in each fund? Do you have separate accounts for all of them? etc.
Congrats on the Emergency Fund!! That’s awesome! Your savings goals for the new year look like fun!
As for our sinking funds, like most of our budget categories the money is just in our checking account. We use YNAB to keep track of what money is earmarked for what purpose. We always spend and track according to YNAB, not any account balances.
The only categories that get their own account are the emergency fund and self-employment tax savings (and obviously IRAs, other retirement, and 529s).
It makes it real easy to “move money around” with out having to move money around.
Good luck with the chainsaw. My husband has saved us thousands by cutting down trees. (And we still spent thousands to have professional tree people to cut down trees he was not comfortable with.) It is sad that all of our ash trees are gone. My husband started with a Husqvarna. He says it was a great learning saw but he wore out the engine and it was cheaper to buy a new one then rebuild. He switched to a slightly larger gas Stihl and loves it. However, both caused him grief because of bad gas (ethanol in it?) if you don’t use them often enough. The additives never really worked and we finally switched to buying the expensive “pure” gas in cans at the hardware store. He was also gifted an electric battery chain saw which he loves because 1) it doesn’t have the gas issues 2) you can easily turn it on and off by just pressing the button which makes it easier to take breaks when working with kiddos in the mix 3) it is great for the bigger branches that seem to come down all the time 4) you don’t smell like gas and 5) I like it because I can handle it too and help out occasionally. He has several batteries.
Thank you for this input! I will definitely share it with my husband. I don’t think we’ve even considered a battery powered saw. I wouldn’t think they would be powerful enough, but it’s good to hear that you like yours! The main use will be cutting up trees and limbs that are already down.
Hubby was planning to get a certain Stihl saw at the recommendation of my uncle (who was in the tree business in Tahoe for years) My uncle has had the saw for decades and still loves it. Said it should run in the $300 range. When my husband looked, it turns out they don’t make that model anymore. The current version is Stihl MS 261 C-M and it’s in the $500 range.
I love reading these! Those how-2-book gifts are a great idea, I’ll remember that for my kids next year.
I’m also really curious about your blogging income details. Do you have an update planned in the near future?
Yes!! I’m way overdue for a blogging income details email! It’s on the list! 🙂