It’s that time again when I share our real budget numbers with you– everything we earned, spent, and paid in debt last month. I have been transparently sharing our finances for two and a half years now. And let me tell you– we have come a long way!
When we started this journey, our income was about one third of what it is now. There was no blogging side income and my husband didn’t have side income either. When I added up all the numbers this month, I was pretty shocked. That side income makes a big difference!
I have never felt like a “disclaimer” was necessary on these reports, but this time I’m a little worried that our income might make some of you feel like you can no longer relate to us. Our income isn’t outrageous, but it has grown considerably since we started out a couple of years ago with a pre-tax salary of $39K. Making steady progress on paying off our student loan debt on a salary one-third of the size of our debt was encouraging to many of you who are in a similar situation.
From the beginning, we knew that we had to increase our income to make reaching our goal possible. When I announced our initial goal, I got naysayers telling me that I obviously couldn’t do math because it was impossible to pay off $100K in 3 years on an annual income of $39K. Having people mock our goal just got me more fired up and motivated.
I hope that this report will show you that when you put your mind to something, you really can reach your goals. We’re not there yet, but we’re happy with our progress and know that we can achieve our goal.
My advice is to get your expenses low (my book will help you) and do whatever you can to increase your income. As you’ll see, our expenses have not changed much from when we were making under $40K. In fact, some of them have even gone down. I hope that making our personal finances public will encourage you to reduce your expenses and increase your income too.
Here goes! Let’s see how our earning and spending looked in January. We’ll start with debt payoff.
Debt Repayment
In January we paid off $2,866 in debt! We are really close to knocking out another loan which is exciting! This is the year we’re going to finish off the rest of our debt! Our goal is to be done by December, but I’m secretly hoping that we can do it sooner.
Income
Our total net income for January was $10,473. Since we live on last month’s income, this is income that we haven’t touched yet. We will budget and spend it in February.
Attorney Income (Day Job)– $5,140 With Mr. SixFiguresUnder’s new job, in addition to taxes being taken out of his gross earnings, our health insurance, dental, vision, parking, union dues and retirement are taken out. In order to keep consistent and comparable reporting, I add the value of those benefits back in to come up with this income number, although they are deducted from his check before he gets it. His actual take-home pay is $3,762.
Attorney Income (Private Practice)– $2,990 In addition to his job with the state, my husband does estate planning, small business, and real estate work for private clients. His income is very variable. Some of the work gets paid up front, and some he won’t see for over a year after the work has begun.
My Income (Blog)– $2,286 This is just blogging income since my Etsy shop is still on vacation right now. I have already taken out my expenses (besides taxes), which were higher than normal because I bought a ticket to FinCon!
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Other Income– $57 I earned a bit of income selling some old sewing patterns. They’ve been passively listed for sale for a while, but I had two (high-priced ones) that sold in January.
Spending
Each month we budget down to zero using last month’s income. Our spending in January came from the income we earned in December. In addition to the debt payment above, here’s how we spent money in January:
Tithing– $964 We happily pay a 10% tithe on our total income from the previous month. You can read more about why we pay tithing even though we’re in debt.
Other Giving– $20 Other charitable donations this month.
Mortgage/Rent– $0 Living in my in-laws’ unfinished basement is a huge blessing. I don’t expect everyone to do what we do, but for us, it’s worth sacrificing some comforts and privacy to pay off our debt faster.
Internet– $0 Thanks to some legal work that my husband did for our service provider, we will have free internet for a while. It’s nice to have a skill to barter with.
Republic Wireless Cell Phones– $24.85 We switched our Republic Wireless phones to the new Republic Refund plans. With our refund for the data we didn’t use the month before, I ended up paying $11.72 and my husband paid $13.13 for our phones. That includes taxes too! You can read about getting refunded for cell data you don’t use here.
Health Insurance– $665 We have our insurance through my husband’s employer. This is our part of the insurance premium that his employer does not cover. I include dental and visions in this too.
Car Insurance– $158 We are insuring three older vehicles. Yep, the crazy red van is still on there. Stay tuned.
Renters Insurance– $14 We have our renters (and auto) insurance through USAA. It doesn’t cost much and it’s really great to have when you need it.
Food– $307 We went slightly over our normal $300 budget this month, which is kind of crazy because we didn’t spend anything on groceries for the first two weeks of the month! I guess by that point we were out of everything. We should be pretty set for a good part of February though, so I’m planning for a low grocery budget in February.
Gas– $316 Hooray for gas prices going down! Gas is down to $2.24 here! With my husband’s long commute, gas prices make a big impact on our budget.
Parking– $155– Working downtown means paying for parking. It is set up to come straight out of his paycheck, which means it is paid for with pre-tax dollars, a small consolation I suppose.
Fun– $9 I went out to lunch with friends to celebrate my a friend’s upcoming baby.
Clothing– $28 I was in Sacramento near one of my favorite thrift stores. Since I don’t get there very often, I stopped in. I found several nice pairs of shoes for the kids and a pair of dress shoes for my husband, along with some other kids clothing.
Household– $166 This is super high this month. Mostly because we bought new hair clippers and accessories. We take care of haircuts at home for all of us (but the clippers are just for the boys!), which saves loads of money. Our other clippers bit the dust though. We also bought some texture and primer to finish a wall in our basement abode. Pretty exciting. Of course there are normal toiletries too.
Gifts– $23 We attended a triple birthday for three nieces (all in the same family).
Car registration– $90 The registration was due for the crazy red van. We will be taking it to fail smog (we assume) this month. Then the plan is to retire it (in other words, collect $1,500). If by some odd chance it passes smog, I have someone who wants to buy it (and has been asking to do so for months now). So either way it’s a win. But the registration needs to be current in either case.
Retirement– $484 With my husband’s state job we are forced to save for retirement. While we have some retirement savings from our before law school, it’s nice to finally be contributing again. This amount is taken out automatically.
College Savings– $100 We contribute $25 per month per child to 529 accounts. More on our decision to start saving for college in this post.
How About You?
- How did your budget go in January?
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I was wondering what your favorite thrift store was? I’ll be in sacramento next week and love a good thrift store! Thanks!
I look at your reports religiously, Stephanie! They inspire me to be as detailed in my own debt payoff journey. How are you able to itemize every transaction/item the way that you do without forgetting what goes where. I’ve tried your method of breaking down expenses, but it’s hard to remember every purchase.
Thanks for being a faithful reader Charlinda! 🙂 I use YNAB for my budget. The mobile app lets you enter a transaction right when it happens. My husband is really good about doing that. With four kids in tow, it’s all I can do to make sure I get my wallet back in my
pursediaper bag, so I often look at online statements to enter the numbers in our budget. As for WHAT I bought (not just how much I spent), I’ve found that the sooner I enter the transaction, the better. I also save receipts so that I can accurately split them when necessary (put toilet paper into the household category rather than grocery with everything else I got at the same store).No disclaimer is needed! Our monthly income is far less than yours, and it’s a fixed income for us older people. Since I’m dealing with two chronic illnesses, I’m not likely to start up any side gigs, and my retired husband spends his time helping me in addition to the tasks he would normally do. Yet, all I am is happy for you! Yeah! We’ve been living debt free for a while, with a paid-off mortgage and car, and keeping in contact with others who live a frugal lifestyle reminds us that our frugality brings us peace and security.
You’re always so supportive and encouraging Linda. Thanks for cheering us on! You’re so right about peace and security! 🙂
I enjoy catching up on your monthly progress posts. And I think it is great to see your family’s income rise up and the progress you have all made. (It always “amazes” me – not sure that is the right word – in general, how much money is deducted from a paycheck) And that is great you are going to Fincon. You will have a great time. Have you been before?
Currently, I am hacking away my credit card float. Living on last month’s income is my next goal.
Hi Christine! This will be my first time at FinCon (or any conference for that matter). I’m a little nervous since I’ve never met anyone that will be there! I’m sure it will be great though!
Good job working on your credit card float! 🙂
I totally get why you would feel “ashamed” of your additional income. But I say, CONGRATS! It is amazing for you and your family! I got about a 10% raise in December and I just started seeing the boost in income. I don’t live on last month’s income yet, but I get paid bi-monthly and my first check covered all my expenses with $500 left over! That’s never happened before. So my second check will go completely towards debt payment, plus that additional $500! So happy about my raise!
That’s so exciting about your raise Tracie! That’s great that you can you can live off of less than one pay check and put the rest toward debt!!
If I did the math correctly, I think you’ll have $6K to put towards debt in February….and that will bring you to over $100K of debt paid off – woohoo!!
Oooo! You’re sneaky Libby! 🙂 We just made our “first of the month” payment for February… and I’m excited. My lips are sealed until next month’s report though.
I think a growing income is nothing to feel ashamed about. My husband makes an above average income, but he did it by going back to school to be a software engineer. He used to be a commercial diver on an oil rig, very heavy duty work. I made 26K a year working community mental health before I went back to nursing school and eventually tripled my income when I was still full time. People with high incomes can still make foolish choices and waste the fruits of those labors. It’s good to see you prioritizing debt-free living over lifestyle inflation.
Thanks Jen. We’re definitely excited about the growing income. I just wanted to let any new readers know where we came from. That’s great how you and your husband have both leveraged education to increase your income! Avoiding lifestyle inflation really is key.
I think the fact that you made more from side income than from regular income is encouraging. I know that both you and your husband have worked so hard to find other streams of income, and so can others. Great work!
Wow– you’re right! Let’s see if we can keep that up!
You have almost paid off $100,000 worth of debt! Congrats to you! Your doing a great job!
Yes! Nearly $100K of debt– it’s exciting and sickening all at once! 🙂
Wow Stephanie! You and your family are doing a great job! Your debt number is dropping fast!! I look forward to your monthly progress reports to inspire and encourage us to keep going on our own debt payoff journey.
We did pretty well in January and February is going to be a super exciting month for us in terms of debt payoff…we had an unexpected change of plans last week so it looks like we will be paying off our mortgage sooner than expected…like 6 months earlier than expected!!! I’m giddy with excitement with the idea!!! Both husband and I are feeling impatient and just wanting to be done with debt as we have been on this journey since February 2010 and now…the end is almost within sight!!! Just gotta keep pushing forward!
I believe you can pay off your debt sooner! Keep pushing with focused intensity!
Cheering you on! Go TeamSixFiguresUnder!! Go, Go, Go!!!
Midori
Thanks for always being so encouraging Midori! Six months until your mortgage is paid off?! Now that is exciting! You’re so close! Way to stick with it for six years! The finish line is so close!
That is amazing! Since 2010…I can’t even imagine. Congratulations!
I like that you say you “secretly hope to pay off your debt sooner”… ummmm it’s not so secret anymore – you just told in the internet 😉
Ha ha! You got me Jody– not a secret anymore. I didn’t give away *when* my secret goal is though! 😉
I think the overall idea is great. Our income doesn’t even come to a quarter of your income but everyone has their own situation. I can’t even fathom making that much either. I’d love to say we have less debt but we have about 80k on our home loan. Not all of your tips would work for us but we all can apply the same spirit or basic idea of the tips to our own personal situation.
Yes Carrie! Everyone’s situation is totally unique, so there isn’t a specific one-size-fits-all plan. Generally, decreasing expenses, increasing income, and not giving up pretty well cover it. 🙂
I think the increase in income is an important part of the debt repayment story. For most of us, plotting to increase income or to maintain a very difficult high income job is critical to accelerating debt repayment. It’s very exciting to see what you have achieved–your side income is impressive! It shows hustle, plus cultivating a side income is probably more relatable than finding a rent-free living arrangement for most of your readers.
That’s very true Jenny! Thanks for pointing that out. 🙂