February 2025 Family Budget Update

Every month we share our family’s real budget with you in an effort to break the taboo about budgeting and help you manage your own budget. Unfortunately, personal finance isn’t offered in most high schools and most people don’t ever have experience with a real budget until it’s their own.

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 after paying off our debt. We kept tackling more financial goals! We changed the amount of money we allocated to certain categories, but change is just a normal part of budgeting.

If you have financial goals then budgeting will help you reach them! If you don’t have financial goals yet, you should make some! I bet it would be pretty easy to come up with some goals that you are excited about. It’s just a matter of vocalizing them and committing to start. The time will pass, whether you have financial goals or not, so you may as well be working toward something great!

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

Here’s what our spending and earning looked like in February.

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 have no idea what that means, here’s a video walk-through. Or you can read up 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 and can make some pretty good guesses, 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 usually change during a month. And a budget that changes during the month is good!

It’s normal for our spending plan to change as we move through the month. The important thing isn’t spending exactly how much we guessed we might spend in each budget area 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 – $1,286 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. 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.

Monthly Bills

Mortgage – $3,000 Our actual mortgage bill each month is $2,525 but we round up any pay an even $3,000. This shaves two years off of our mortgage and saves us over $4,000 in interest. If you’re new here, 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 $155,470 remaining on our mortgage.

I finally updated the goal tracker house (you can get your own copy in my shop)!

Electricity – $6 Two years ago we installed solar panels on our property, a $70,000 investment that we finished paying for last year. Our electric bill is just the $6 unavoidable fee.

Car Insurance – $365 We have three vehicles with two adult drivers and one teen driver, soon to be adding another teen driver.

Internet – $105 We have cable internet through Comcast. When we bought our home eight years ago, we invested $5,000 to have Comcast extend cable internet to our property. It has been worth it every single day since then, even though the cost for internet service went up recently.

Water – $100 Our water bill comes every other month. We wet aside $100 to go toward the bill which will come in March.

Garbage- $53 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. The cost on this service recently increased, too.

Cell Phones – $175 We pay for eight cell phones: five for our family, and three for the Ukrainian family that we sponsor. Mike is trying out the annual plan, so we now only pay 7 phone bills per month). Our phones 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.

Gym – $60 For the first time in our lives, we joined a gym this year. Our teenagers were extra excited, since it’s a small local gym that many of their friends go to. We have been going early every morning. We hope that investing in our fitness now will make life better now and for years into the future.

Everyday Expenses

Food – $900 Along with going to the gym, we have been having more protein. February’s grocery spending also includes $100 of stocking up on the protein shakes we like when they were on sale. Our grocery spending has been creeping up lately and it’s not just because of the rising price of groceries. Much of it comes from just not practicing what I preach. I have a new blog post where I go into all the details of the 4 things I’m doing to lower our grocery spending in March.

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. Right now it’s available with pay-what-you-can pricing!

Fuel – $583 Getting our Prius was a game changer for our gas budget. We drive it whenever we’re going somewhere with 5 or fewer people. We still have our 15-passenger van, but we don’t need to use it very often. We often take both the minivan and the Prius when we are all going somewhere close.

Household Misc – $373 Mike bought this spot carpet cleaner to use in our vehicles. Neither Mike nor I have used it, but our kids (especially our 15-year-old and 7-year-old boys) have been using it a lot, so I’ll call that a win! We had our normal subscriptions like Google Suite ($6), CrashPlan ($30), Adobe Lightroom ($20), Scribd/Everand ($12), and Sadie Active ($10). In addition, we bought normal household/toiletry items and various things on Amazon, including a blood pressure monitor (which my kids absolutely love to use when visiting their grandparents) and a universal vacuum cleaner attachment set (the kids were excited about this too 😂).

Clothing – $0 – We did buy a few basics like socks and underwear for some of the kids, but that was all offset by some returns we made in the clothing category.

Animals – $94 We got a couple bags of chicken feed along with dog and cat food.

Kids Activities – $225 Our three older kids are doing a week-long summer church camp at a college. The majority of the cost of covered by the church, but families pay $75 per teen.

Allowances – $143 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 – $1,343 Four of our kids will be doing summer swim team again this year which is $1,225 total. I decided to start a sinking fund for for next year’s swim team because it’s kind of a big amount of money to come up with in February. The remainder of our sports spending was admission to see our kids play sports. We have a pass for home games, but the away games really add up!

Sinking Funds

For our regular 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 food 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 law school debt years earlier than we thought possible.

In contrast to the regular budget categories 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. I recently wrote a whole article about how to get started using sinking funds (and why you should).

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 spent $71 on orthodontics in February. Current category balance is $561.

Car Maintenance – $400 added. In February we didn’t spend anything. Current category balance is $454.

Christmas – $200 added. In February we didn’t spend anything on Christmas 2025. Current category balance is $380.

Disability Insurance- $190 added We set aside money 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 have disability insurance to help us protect it. Current category balance is $2,180.

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. Current category balance is $322.

Birthdays & Gifts – $50 added. We spent $144 on gift in February. Current category balance is $30.

Car Registration & Smog – $50 added. We didn’t spend anything in February. Current category balance is $292.

Family Fun Fund – $100 added. We paid for our family to ride the train into San Francisco to see Annie at the Orpheum theater (we gave our kids tickets for Christmas). Mike and I also went to see the amazing BYU Ballroom Dance Company when they were here on tour. Current category balance is $11.

Home and Garden – $75 added. We spent $45 on paint to fix some rusty spots on our 15-passenger van. We haven’t actually used it yet, but we made the first step! Current category balance is $30.

Big Trips – $462 added. We didn’t add any of our “own” money in February. We earned $36 from Rakuten and $450 from our Carnival credit card. I wrote in detail about how we’re saving for this trip creatively without using our own money. We’ve already paid for our cruise, so now we’re just saving for everything else like the drive down to Long Beach, the parking garage, excursions, and spending money on shore. I bought a few things for our cruise including these waterproof phone cases and different colored lanyards. Current category balance is $1,233.

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 pleased to see that this small contribution that is barely noticeable in our monthly budget has added up and grown to over $21,000! 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 2025. Mike has about $1,300 each month deducted directly from his paycheck into the state pension fund and a 457 plan for his retirement.

Income Earned in February- $11,457

The categories above show everything we spent and saved in February, which was all the money we had earned in January. At the same time we were also (of course) earning money during February. At the beginning of February, we set up our budget to allocate spending from our January 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 will use during March.

Attorney Income – $9,094 Mike works as an attorney for the state of California. This was 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 this post where I talk about how much you can make on Airbnb.

Law Firm- $0 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 write himself a paycheck each month, just a couple of times a year.

Blog – $0 I only pay myself a few 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.

Child Care – $845 For the past year I have been taking care of the 3-year-old of the Ukrainian family that we sponsor. The state pays for childcare while the mom is at work. It’s much less expensive and more convenient to have her stay with me than to bring her to a standalone child care facility.

Tax Refund – $1,518 We really weren’t sure if we were going to have to pay this year or not. We finished up using our solar tax credit (more on that here) and had to change Mike’s withholding back to normal at work, plus with our self-employment taxes we weren’t sure how things would shake out. We ended up not owing, but instead getting a bit of a refund. This is just from California, we should be getting a small amount from our federal return as well.

Come back next month to see how we used this income to spend and save in March’s budget.