Family Budget Update– June 2017

Have  you ever budgeted for an expense you knew was coming up, but then forgot that you did?  I did that this month and it was the best feeling.

When I budgeted at the beginning of the month (using last month’s income), I set aside $3,000 to cover a portion of the major repair we would be doing on our rental unit.  I figured that was all we could spare from the budget so we would need to dip into the emergency fund to take care of the repair.

Fast forward to the end of the month when our contractor was available to do the work.  I somehow had it in my mind that the money to cover the repair was going to have to come out of the emergency fund.  I was mentally geared up for that.

When I sat down at the computer to move money around and record the transactions, I realized that I had in fact set aside money for the repair.  I had completely forgotten that I had done that, so I was thrilled!  A budget nerd high, for sure!

In fact, between moving money around in different budget categories and using June’s rent money, I was able to cover the entire cost of the repair!

Hooray for looking ahead and budgeting!

Now let’s look at how everything else went for us in June.  As always, these reports are meant to encourage you and show you what a real-life, practical family budget looks like.  The numbers have changed pretty drastically over the years since I first started these reports, but they’re all the real thing.

Income

Our total income for June was $10,444. Since we live on last month’s income, this is money that we’re waiting to spend in July.

Attorney Income (Day Job)– $5,509 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 $4,407 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 it is more easily compared with our old income from the small firm when we didn’t have any benefits.

Attorney Income (Private Practice)– $2,753  On top of working full-time, my husband has his own private law practice on the side (crazy, I know!).  He started it to help speed up our debt payoff and because he had clients from his days at the small firm that didn’t want to let him go.  He hasn’t done any advertising since being on his own, but the work keeps coming in.  His income fluctuates greatly from month to month.

My Income (Blog)– $2,182 The income that I report is the income that I received this month minus all of my blogging expenses.  Of this, I set 30% ($654) aside for self-employment taxes and the remainder ($1,528) goes into the family budget.

For the past six months (between pregnancy and having no internet at home), I haven’t done much to grow my blog (besides posting 4-6 times a month) and it still brings in a consistent income.  As soon as we get internet (later this week!!!) I will start working on growing my blog, but for now I’m thrilled that it has held steady all this time.

If you’re interested in the details of my blogging income and expenses as well as other blogging tips and resources, you can sign up for my Behind-the-Scenes Blogging emails to get the scoop.

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 June came from the income we earned in May.  Here’s how we spent money in June:

Tithing– $1,148 We happily pay a 10% tithe on our total income from the previous month (May).  You can read more about why we paid tithing even when we were in debt. Since we pre-paid a big chunk of tithing at the end of 2016 (for tax reasons), this didn’t actually come out of our pockets this month, but we’re keeping track so we know when we’ve reached the end of our $8,000 of pre-paid tithing.

Other Giving– $80 Other charitable donations this month.

Mortgage/Rent– $2,500 Our payment is actually slightly less than this, but I like round numbers, so we decided to just pay a nice even $2,500 each month.  This small adjustment actually shaves a few years off the mortgage!  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– $168 Our bill was less than last month, which was an absolute shock, seeing as we now have renters who are on the same utility lines (read about how we got renters here)!  I attribute it to being very involved with our bill and daily usage. We have been really motivated by the OhmConnect program which lets you earn some extra money for saving power.  My kids think it’s super fun to save power now.  They love “Ohm hours”!  If you’re in California (or Toronto or Texas, I think) then you should definitely check it out!  If you live in other places, you can sign up too, and earn prizes instead of cash.

Water– $45 Our water bill comes every other month, so I just set aside approximately half of what I expect the bill to be.

Trash– $18 You can read all about how we keep trash costs low here, though with having renters now and a new baby soon, I might bite the bullet and go with a trash pick-up service.  We’ll see.

Internet– $213  We bought a new wireless router (we let the in-laws keep ours when we left) and cable modem (so we don’t have to pay $10/month to rent it from the cable company).  The work on the poles to physically bring the line to our home (what we paid $4,800 for several months ago) was completed last week.  Our installation (where the internet is activated) is later this week.  And we can hardly wait!!!

Republic Wireless Cell Phones– $36  We’ve been using Republic Wireless as our cell phone carrier for over two years now.  This covers the cost of service for both our phones, including all taxes and fees (we’re on the Republic Refund plan).  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.

Car Insurance– $220  We  once again have three cars on our insurance.  Hopefully in July we will sell or donate my husband’s old car so we’ll get it back down to paying to insure just two cars.  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 husband’s father was in the service years ago.  If you or your parents were in the military, you’re probably eligible for USAA too!

Food– $511  I knew this month would be higher than usual for several reasons.  I ordered another 40 lb box of fresh chicken breasts from Zaycon Fresh at the beginning of the month, which will last us about 4 months.   Their prices are are great, the meat is great, and I love the ease of just driving up and having someone load the box in the car for me. When you sign up for Zaycon’s emails, you will get emails for their coupon codes and deals, so the prices are even better than the everyday prices listed on their site.

I also found a killer deal on cereal later in the month, so I bought a lot.  A lot!  Cold cereal is a sanity saver for me when I’m pregnant.  Often, the best deals are for the cereals that are loaded with sugar, but this time I found a deal on normal, healthy cereal so I couldn’t pass it up.

Gas– $341 Not having to drive the kids to their old school has saved us hundreds in gas (and ten hours a week of driving time for me)!  My husband still commutes downtown for work, so our gas bill will never be low, but this is much better than what it usually is!

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– $82 When we were at Sam’s Club my husband picked up three pair of dress pants.  He wears dress pants 6 days a week and has been putting lots of wear and tear on his suit pants lately.  There were also some short sleeve button up shirts on clearance for him that I couldn’t resist (I am a sucker for gingham!).

Household– $137  We bought an FM transmitter so that we can play audio from our phones through the van’s speakers.   This way we can listen to audio books from our phones (so everyone can hear them) instead of having to get them on tape or CD.  We borrowed A Series of Unfortunate Events Book One on cassette from the library a while back and misplaced one of the tapes.  I kept renewing it in hopes of finding the tape, but then we ran out of renewals and still couldn’t find it.  I ordered a replacement on Ebay for $13 and literally found the tape (on top of the dryer with some odds and ends brought in from a road trip) the very next day.  So now we have our own set of tapes.  We also got an ironing board from the thrift store and some toiletries (not from the thrift store, ha ha!).

Fun– $100  I was gone for a week helping out at a girls’ camp for teenage girls from our church.  While I was gone, the kids enjoyed pizza and several Redbox movies with Daddy. We’ve had pizza a couple of other times this month too.  We went to the county fair on the day when kids were free (but adults still had to pay)

Home Improvement– $47 Primer for the boys’ triple bunk bed and weather stripping for the back door (which ended up being the wrong stuff).  We had several Home Depot gift cards that we used to  get some other things for the house or rental, too.

Rental — $3,565 We made a major repair on our rental unit.  We had planned to make the repair before renting the apartment, but the renters came our way first.  Still, we wanted to make the repair ASAP since it was a safety issue.  This is the amount of money we took out of our own budget (not the cashflow of the rental, which we keep separate).

Furniture– $323  I found a great couch at the thrift store on half-off day that goes well with a love seat I bought a couple of months ago.  We also got a new queen mattress and box spring for our guest room.  Our Goodwill has new mattresses and box springs at great prices.  Since we had very little notice before we needed a guest bed, we decided to give Goodwill a try.  We have more guests coming, so as soon as they’re all gone, we’ll give the bed a try ourselves.  We are planning to save for a new mattress for ourselves very soon.  We’ve had our queen for 12 years and it’s far from comfy now.  We’d like to get a California King so my husband’s feet won’t hang off the end anymore.

Animals– $74  We stocked up on chicken feed when it was on sale and also bought some cat food.

New Car– $1,518  I told you all about our new car in the intro to last month’s report and explained that while we paid cash for it, it would come out of next month’s budget (we can do that since we’re a month ahead of our expenses).

Tax Prep– $90  Our tax advice and preparation plan allows the cost to be spread over the year.

Quarterly Taxes– $3,692  Every month, I set aside 30% of my blog proceeds to a tax account so that we won’t be hit as painfully as we were this year.  Theoretically we do it with my husband’s law practice too, though we haven’t actually done it yet. We had the majority of this saved in our tax account. Just over $700 came out of our family budget 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.

Last month we didn’t do much with sinking funds, so I tried to catch up a little this month.

Car Repair– $200  

Medical– $150  We’re expecting a new baby at the end of August!

Car Registration & Smog– $60 

Christmas– $100 

Life Insurance– $70 If we put this much in each month, we will have our premiums set aside for when they’re due in the fall.

Gifts– $60

Retirement– $539 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

Here’s a quick look at our current savings goals.  We’ve taken care of taxes, the cost of getting internet installed, and saving for a new (used) car.

Next up is beefing up our our emergency fund so that it will cover at least 3 months of expenses.  Right now our emergency fund is sitting at around $5,000.  We knew we wouldn’t get to this in June with the rental repair, but we’re hopeful that we can add to our emergency fund in July!  I’m just thrilled that we didn’t have to dip into the emergency fund to take care of the repair!

How About You?

• I’d love to hear about how your budget and/or debt repayment went in June!

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