Real Family Budget Update- MAY 2019 (with BIG NEWS!)

We are keepin’ it real over here in the Six Figures Under family.  As usual, I’m going to show you all of our actual spending for our family of seven and this month, well, it’s not the same ol’, same ol’. Some of these numbers may shock you.  I know they shocked me!

And then there’s some other news too.

First of all, we bought a new van (well, new-to-us).  Somehow between normal use and kid curiousity, the stitching at the end of one seat belt in our van was broken and then picked out entirely, so the buckle just fell off.  That means we can’t get the whole family in the van right now.  We’ve worked around it by taking two cars when the whole family is going somewhere.  We often have to do that anyway when Mike meets us somewhere after work or has an early meeting before church.

Having one less seat belt in the van hasn’t been a huge inconvenience yet, but sometime in November our family will need 8 seat belts!

Yep, that’s an announcement!

It wasn’t a necessity to get a new van right away, but I had the thought to look on Craigslist one day and the first 8-passenger van I saw was a Honda Odyssey being sold by the original owner for a great price for the mileage.  I had Mike call on it, everything fell into place perfectly, we felt good about it, and we brought it home the next day.

The van cost $5,200 with the tax and registration fees of $591, so in total we spent $5,791.  You’re probably wondering where that money came from, because, hey, that’s what we talk about around here.  You know we haven’t been saving up for a new vehicle.

So how did we buy it?  We didn’t do it on credit, that’s for sure.  We paid cash, but the cash was kind of like a loan from ourselves.  Since we’re a month ahead financially, we have the money in our accounts that is budgeted for the current month (earned in the previous month) AND the money earned in the current month but earmarked for the next month.

What makes it even better is that my husband gets paid monthly at the beginning of the month, so his pay sits there for a full month before we even think about budgeting it. The new paycheck arrives before we have even spent a dime of the last paycheck. Our other income comes in at various points during the month, but we still don’t budget and spend it until the month after we receive it.

This buffer of cash at our disposal is different than our emergency fund, which we keep elsewhere to earn a little interest.  As a general rule, we don’t borrow from this cash buffer for splurges like going out to dinner.  We’ve only ever dipped into our month-ahead buffer a few times.

So how are we paying back what we borrowed from our buffer?

We will be selling our other van soon, which should cover around half of the cost of the new one.  Plus, I know that in June I’ll have an unusually large blog income because I’ll recieve a payment I earned months ago.  Our depleted buffer will be replenished soon, but we can continue budgeting and spending as normal because the buffer is far larger than the cost of the van that we borrowed from it.

If all that buffer/month-ahead talk was gibberish to you, download my free Guide to Getting a Month Ahead Financially which explains it all in simple terms and helps you get to this wonderfully liberating point in your own finances.

–Ok, we’re almost to the budget report!–

Before I get into our numbers I want to remind you to report your May progress in our community Debt Smash-athon by June 10th!  As soon as you finish reading here, go to the May Debt Smash-athon Report to let us know how you did. You’ll get entered for the monthly prize!  Remember, we’re counting your debt paid, your contributions toward retirement, and/or your saving for a big goal! Please report whether your  month was a big financial success or not. There’s no shame in having a low savings month. It happens to all of us, as you’ll see here in our own report!

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 May — $9,006

We live on last month’s income. This income section shows the money we earned in May and will be spending in June.  The spending section below shows the money we earned in April and spent in May.

Attorney Income $6,122 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 $1,442— My blog has been on the back burner lately (see the announcement above), but I’m planning to put some effort in this summer now that I’ve got a little more energy.

Airbnb Income $1,442— That’s not a typo.  Our net blog income and net Airbnb income are exactly the same this month. Couldn’t have planned that!  In case you didn’t see, I published a post recently that goes into detail about our Airbnb start up costs.

Spending in May

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

Giving

Tithing- $952— We always pay a 10% tithe on our income.  This tithing (like all of our May spending) comes from the money we earned in April.  You can read about why we continued paying a 10% tithe even when we were in debt.

Fast Offering- $80— Each month we 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 little PMI.  We have a 15-year mortgage, but our big goal is to pay it off in 5. If you’re a numbers person, or are looking at mortgages yourself, Mike has a number-full description of our mortgage just for you.

Electricity- $224 This bill mostly covered the electricity used in April.  Our house (and our rental, which is on the same meter) is completely electric– no natural gas or propane.

Car Insurance- $168 We drive two older vehicles (1999 and 2005).  We have been so impressed with the service and coverage that USAA provides. 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/are in the military, you’re probably eligible for USAA too! We added our new new van to the insurance, but haven’t been charged for the addition yet.  In June we’ll have a larger payment to cover this time between buying the new van and selling the old one.

Internet- $70 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- $53 Our water bill comes every other month and varies, but we try to set aside half (usually $45) of what we expect the bill to be.

Trash- $34 Our garbage collection bill comes every other month, so we set aside half each month.

Cell Phone (Steph)- $14 Republic Wireless no longer offers my plan to new customers, but you can now  get a 1 GB plan for $20/month.  That’s pretty sweet too.  It’s what Mike has, but it’s a business expense for him, so never shows up here!

I had a reader recently tell me about Mint Mobile.  It looks like another really great option for affordable cell phone service, especially if you want to bring your own phone.  You can get data for a lot less than Republic Wireless.  Definitely worth looking into if your cell phone bill is through the roof!

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 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, I think that link should also get you a $20 credit (let me know if it’s not working).

Everyday Expenses

Food- $607 You probably noticed April’s grocery spending was abnormally high for us, but I’m pretty sure May’s grocery spending is a family record.  Oops!  I got behind in entering my receipts in YNAB.  I knew we were overspending, but I had no idea it was this much over our normal $400 budget.  A big part of this is that I didn’t do my normal monthly grocery shopping in April or May.  I’m blaming it on the tired-sick-lazy that happens to me in the first few months of pregnancy.

Fuel- $603  We didn’t drive more than usual, but with increasing gas taxes, fluctuations in oil prices, and the more expensive “summer blend” of gasoline, fuel prices are up, and so is our monthly expense.

Houshold Misc- $405 A lot of this month’s household miscellaneous spending is for maintaining the outside of our property.  Expenses included spare chains for the saw, three 100-ft hoses, supplies to fix an outdoor plumbing emergency (the unplanned water fountain pictured below), and gallons of Roundup (see last month’s poison oak epidemic).  We also bought a big box of diapers.  Since all of our kids have been potty trained by their 2nd birthday, we hope these are the last diapers we buy until the new baby in November.  I also bought rotary cutting blades, a larger cutting mat, and fabric for a few quilting projects.

We didn’t even think this spigot worked (it never turned on for us), until Mike inadvertently rolled a round of wood onto it and created a geyser that we couldn’t turn off.

Clothing- $154 I bought new athletic shoes for myself and my oldest son, plus new swimsuits for three of our five kiddos.

Animals- $95 We bought chicken food, dog food, cat food, and shredded wood bedding for the tortoise.  And the answer to last month’s teaser… we got 4 goats and a livestock guard dog to go with them.  A friend who is moving gave them to us along with quite a bit of fencing.  We will be buying some additional fencing and supplies, but it makes for a very inexpensive “goat experiment.”  We’ve been wanting to try sheep or goats to help clear some of our land that’s too steep to mow (and too much acreage to weedwhack) so we’re better prepared for fire season.  So far, so good!  We had a very strange week of rainstorms in May, but Mike made the goats a shelter completely with scrap wood that we had on the property, so that cost us nothing!

Kids’ Activities/School- $4 I bought a used book on ebay for my oldest who I homeschooled this year.

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.

Fun- $0 Don’t worry. We had lots of free fun in May, including a tour of the newly remodeled LDS temple in Oakland.  It’s about a two-hour drive so we did have to pay for gas, but we brought a picnic lunch so we didn’t have any additional spending.

Sure, there were about a hundred better places to take a picture, but when a kind stranger offers to take your squirrely family’s picture you just say yes, even if it features the lovely handicap parking and one of the kiddos is grumpy.

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 and let it build up until we need it.

The amount in bold is the amount that was 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 This month we didn’t spend anything.  Current category balance is $2,745.

Car Maintenance- $300 We didn’t spend anything for car maintenance either. Current category balance is $2,046.

Christmas- $100 We spent $0. Current category balance is $390.

Life Insurance- $75 Our premiums aren’t due until November, but if we put aside $75 each month we should cover them.  Current category balance is $430.

Birthdays & Gifts- $40 We spent $32 on a wedding gift.  Current category balance is $207.

Car Registration & Smog- $40 We spent $58 to smog our old van so that we can sell it (vehicles in California have to pass a smog test within 90 days of sale)  Current category balance is $223.

Home Projects- $0 We aren’t actively putting money toward any home projects right now. Current category balance is $706.

Family Fun Fund- $0 Formerly referred to as the Kids’ Fun Fund, this is where we put money that the kids earn together.  Most of the money comes from the OhmConnect program where you earn money for reducing your electricity during designated hours a few times a week. Current category balance is $314.

Investing

Kids’ 529s $125 — I know that $25 per kid per month invested for college looks piddly, but we’re just not as concerned about college costs as a lot of people seem to be.  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 state 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 can see all the numbers and details about our big goal here.

Our normal May mortgage payment of $3,454 includes principal, interest, property tax, homeowner’s insurance and PMI.  Of that, $1,666 went to principal.  In addition to the normal payment, we paid an additional $105 of principal. (Yeah, that’s not much. We know. And we’re thinking about how we can jump start the savings.)

That brings our totals to:

Original balance of 15-year mortgage: $372,700
Balance at start of 5-year goal (Nov 2018): $363,171

Current balance (after May 2019 payments): $334,571

Percent of 5-year goal reached: 7.88%
Percent of 5-year time elapsed: 11.7% 

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 May! 🙂

How About You?

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

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