February 2022 Family Budget Update

Welcome back friends! If you’re a long-time follower, you might be hoping to find something especially appropriate for April 1st, like…

You will be disappointed to know that despite the fact that today is a day for jests and japes, here you’ll just find an honest post. Just a normal budget update in an effort to get caught up.

I hope you’ll find lots of fun ways to celebrate April Fools Day and that no one gets you too good. One year my kids stuffed clothes to make a body on my bathroom floor and both Mike and I (separately) nearly had heart attacks upon finding it. Let’s hope there’s nothing that over-the-top this year or I might not survive!

If you missed January’s (late) budget update, you can find that here. March is officially over now, too, so I’ll have that update ready shortly as well.

If you have financial goals you want to achieve, whether it’s as big as getting out of debt or as small as buying new shoes, a budget is the way to make it happen! There’s a common misconception that budgets are for people who are “poor” or have financial trouble, but the truth is that budgeting is for everyone who wants to be in control of their money. If you want your money to work for you, it’s time to make a budget.

We’ve been faithfully budgeting and sharing it here since 2013. Lots has changed over the years, but we’ve kept moving forward and have made our money work for us. If you have any questions on how to get started budgeting, let’s talk about it in the comments. You can do this!

Okay, onto the February numbers!

Income Earned in FEBRUARY – $9,610

We live on last month’s income. If that doesn’t mean anything to you, check out the video explaining how living on last month’s income changed our lives or the post explaining how we got to that point.

This income section shows the money we earned in February, which has all been set aside to use in our March budget. The spending section below shows the money we earned in January and spent in February.

Attorney Income – $8,610 Mike works as an attorney for the state of California. This is his take-home pay after taxes, social security, pension contribution, and health insurance premiums. If you’ve been paying attention you might notice this is $900 larger than the last few months! No, Mike didn’t just get a raise, but he did change the withholding from his paycheck. Because we’re installing solar panels at our home we’ll be eligible for the residential solar tax credit, which will erase our federal income tax liability for this year. We could leave withholdings the same, but then we’d get a huge tax refund next spring. It’s better to get $900 a month to help pay for solar now than get $11,000 a year from now.

Blog Income- $0 I haven’t been giving myself a paycheck every month for two reasons. First, I haven’t done much work on the blog in the past two years. Homeschooling my kids has been my priority and I haven’t figured out a great way to spend the time I need with my family, which is my most important work, and still be actively build the blog or develop other business income. Second, while my blog does produce residual income even when I’m not working on it, it declines every month and no matter what I earn, I have about $500 in blogging overhead expenses each month. Right now I’m holding off on paying myself as I’m reinvesting a chunk of what I’m earning back into the business.

Rental Income – $1,000 We rent a one-bedroom apartment on our property. We had it listed on Airbnb for a few years, but have a long-term renter now instead. Though we don’t earn as much as we did with Airbnb, there are some big perks. We don’t have to clean and do a full Covid-disinfect and airing of the apartment between stays, for one. Also, our renter, who has also become a dear friend, helps take care of our animals and property when we go out of town. We expect that we’ll go back to Airbnb after our current renter moves out. 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.

Spending in February

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

Giving

Tithing – $964 We always pay a 10% tithe on our income. This tithing, like all of our February spending, comes from the money we earned in January. You can read our thoughts on paying a 10% tithe here.

Fast Offering – $100 Each month we take one day to fast (go without food and drink) for two meals and contribute to a program that provides assistance for local folks who need it.

Monthly Bills

Mortgage – $2,369 We re-financed our 15-year mortgage to a 2.375% rate in December 2020 and this is our current monthly payment. If you’re interested, you can check out all of the numbers and re-fi details.

Electricity – $371 This bill covers both our home and our rental which are both are completely electric, with no gas or propane. That will be great once we have our solar installed, but right now the price of electricity keeps going up and up.

Car Insurance – $116 Our insurance is through USAA and we love them! If you, your parent, or your spouse were/are in the military, you’re probably eligible for USAA too!

Internet – $70 Having good internet access is super important with everyone at home for work and school. We’re so glad we invested in bringing internet access to our property when we first bought our house. That $5,000 investment was worth every penny!

Water – $45 Our bill comes every other month so we try to set aside about half of what we anticipate the bill to be.

Garbage- $42 The bill for our curbside trash pickup also comes every other month so we set aside half of the bill each month.

Cell Phones – $75 We have three cell phones: one for me, one for Mike, and one we use as a home phone for when the kids are home without us (or that the older kids take when they babysit at someone else’s house). They are all through Visible. Visible is a Verizon company that offers wifi calling and unlimited cell calls and data on the Verizon network. We’ve been using them for three years now and have no complaints at all. It is $25 per phone, but right now you can get the first month for just $5 through my link.

We used to use Republic Wireless, which costs a little less, and some readers rave about Mint Mobile’s great service and even lower costs, but neither of those use a network that provides cell signal at our home.

If you’re paying more than you want for cell service, check out one of these three great and affordable companies: Visible, Republic Wireless, Mint Mobile.

Disability Insurance- $185 This will replace about 2/3 of Mike’s current income if injury or illness leaves him unable to work as an attorney. Our income potential is our greatest financial asset right now and disability insurance helps us protect it.

Music Lessons – $180 Our oldest takes piano and French horn lessons. Some of the others take piano lessons from me, but haven’t quite shown the dedication they would need to merit a paid teacher.

Everyday Expenses

Food – $489 Our food budget includes both groceries and eating out, though we normally don’t eat out much. We aim to spend around $500 for our family of 8, so we were right on target in February.

Every time I go to the store, groceries are more expensive! Have you seen the cost of butter? If you are ready to get your family’s grocery spending under control, Grocery Budget Hero is for you! In this course I teach you the exact strategies I use to rock our family’s grocery budget (even with rising prices). Enrollment is open now! Get $20 off with the coupon code STARTNOW.

Fuel – $477 As I’m writing this (in late March) gas is now $5.64 at the cheapest place around town and is $5.30 at Sam’s Club. Of course it wasn’t quite that high during February. We have some kids’ activities that require driving around, but thankfully Mike doesn’t have to commute anymore.

Household Misc – $292 In addition to regular household items and toiletries, we had the annual renewal of our cloud storage which is around $80 per year. We also had a few magazine subscriptions that renewed in February.

Clothing – $2 –I made one purchase on ThredUp using some credit that I had and needed to pay a tiny bit out of pocket.

Animals – $55 In addition to buying our own food, we bought food for the dogs and cats.

Allowances – $84 Because our allowance system is age-based, we increase this monthly amount as kids have birthdays. 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.

Homeschool – $0 We get funding through our homeschool charter that covers most everything for homeschooling our 4 oldest kiddos, but occasionally there is something we want that isn’t covered. This month, we didn’t have any of those purchases.

Sinking Funds

For most of our budget categories, we zero out the dollars left at the end of the month and send them towards our solar panel purchase goal, but in our sinking funds we set aside money each month for periodic 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 sits in our checking account. We’re 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 account balance unless we’re reconciling the account. We track our budget categories and spending in YNAB.

Medical/Dental – $400 added. In February we spent $362 at the dentist. Five of the eight of us had appointments and some teeth needed some work. Current category balance is $817.

Car Maintenance – $0 added. We spent $111 in February. Current category balance is $2,192.

Christmas – $200 added. We spent $0 on Christmas 2022 during February. Current category balance is $338.

Life Insurance – $75 added. Next year’s life insurance premiums will be due in November. Current category balance is $254.

Birthdays & Gifts – $0 added. We spent $0 on gifts in February. Current category balance is $122

Car Registration & Smog – $40 added. We spent $0 on car registration in February. Current category balance is $176.

Family Fun Fund – $0 added. We spent $840 on getting the three older kids registered for summer swim team. We also paid for an upcoming Airbnb stay. Current category balance is $1,957.

Home Projects- $331 added. We added just enough to cover the cost of some projects (there was already around $300 in the category). The category balance is currently $0.

Garden & Orchard- $0 added. We didn’t spend anything here in February. The category balance is currently $0.

Investing

Kids’ 529s – $150 We know that $25 per kid per month invested for college isn’t much, but college costs are not our highest concern. Scholarships, grants, loans, and jobs during school worked for us. We may accelerate this savings later, but we’re ok with small, consistent payments right now. The kids like to see their balances growing, and it adds up and teaches them good savings principles, even if it won’t entirely pay for school. You can read about our decision to start saving a little for college in this post.

IRA (Steph) – $500 With $500 monthly, I’ll max out my $6,000 IRA contribution for 2021. Mike has about $950 each month deducted directly from his paycheck into a pension fund.

Goal Progress

We are pausing our mortgage payoff goal for the next two years to tackle a new goal. Mike and I shared all the details here about why we are getting solar, how much it costs, and how we’re planning to pay for it here in this recent post.

In March we’ll begin making monthly payments of $1,500 on the $50,000 personal loan for the solar panels. Until then we’re saving up the other $20,000 to cover the $70,000 total cost.

In February we set aside a first payment of $1,058. Adding that to our January payment of $1,181, we’ve saved a total of $2,239 so far.

We still have a long way to go! I made a new chart to keep track of our progress. I color in a little square for each $250 we put toward our solar purchase. Two years might be a little bit of a stretch goal, but we’re excited to figure out how to get it done!