And just like that the summer is over! School starts in a week.
July was a pretty good month for our budget. There weren’t any major surprises. We took a trip to Yellowstone for a week and our gas spending was actually less than June’s (still over $800, though)! That was a pleasant surprise. Since Mike sold back some of his PTO in June, we had a nice chunk of money to put toward our solar goal in July.
About that solar… They’ve been telling us they would have it in “by the end of the month” since April and they still haven’t even started. The bad part is that we’re missing out on a summer’s worth of sunny days that would be producing electricity and instead, we’re paying electric bills. The good part is that we have longer to save up the cash to cover the $20K that we will need (in addition to the $50K loan we took out).
Let’s take a look at our numbers for July.
Income Earned in JULY – $12,839
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 July, which has all been set aside to use in our August budget. The spending section below shows the money we earned in June and spent in July.
Attorney Income – $8,651 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. It also includes a small “work-at-home” stipend that he started getting from the state.
Blog Income- $2,394 I haven’t paid myself in a while, but thought now was a good time since we’ll (hopefully) be paying for our solar installation in August.
Rental Income – $1,794 We rent a one-bedroom apartment on our property. Our long-term renter moved out in June, so we’re back to Airbnb. 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 July
Each month we budget the previous month’s income down to zero. This is how we spent the money we earned in June.
Giving
Tithing – $1,486 We always pay a 10% tithe on our income. This tithing, like all of our July spending, comes from the money we earned in June. 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 have a 15-year mortgage on our house. If you’re interested in the details of our Dec 2020 refi, you can check out all of the numbers and details.
Electricity – $329 This bill covers both our home and our rental which are both completely electric. 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 – $185 Our bill comes every other month so we try to set aside about half of what we anticipate the bill to be, but we estimated on the low side in June, so we had to set aside more for July’s bill.
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 or work at someone else’s house). They are all through Visible. Visible is a Verizon subsidiary that offers wifi calling and unlimited cell calls and data on the Verizon network. We’ve been using them for over two 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.
Music Lessons – $0 July was so busy that we had to pause music lessons.
Everyday Expenses
Food – $638 You can see what we got on our monthly grocery haul for July here, which included lots of strawberries to make jam. We got pizza once, but other than that all of our food spending was on groceries. When we camped in Yellowstone for a week we took turns with Mike’s siblings planning and cooking meals for our group.
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Fuel – $825 Gas here has been around $5.40 or so most of the month, though now it has actually dipped below $5! Our most significant gas use in July was a road trip to Yellowstone for a week.
Household Misc – $62 We didn’t spend very much in household miscellaneous in July. In addition to small household needs, we paid for our Google storage. We also pay monthly for a Scribd subscription because we love the unlimited access to so many audiobooks.
Clothing – $63 – We got some clothes for the kids that were a good deal at Sam’s Club. I had budgeted $100 for the month, but just left what was remaining in this category for next month (like a sinking fund).
Animals – $102 We bought 1 bag of cat food and 3 bags of chicken feed.
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 – $100 We didn’t buy anything for homeschooling in July, but just left the funding in this category.
Sinking Funds
For most of our budget categories, we zero out what is left at the end of the month and send it to whatever our big financial goal is at the time, 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. We spent $0 in July. Current category balance is $1,331.
Car Maintenance – $300 added. We spent $19 on oil. Current category balance is $2,867.
Christmas – $200 added. We didn’t spend anything for Christmas 2022. Current category balance is $1,038.
Disability Insurance- $190 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. Current category balance is $724.
Life Insurance – $75 added. Next year’s life insurance premiums will be due in November. Current category balance is $629.
Birthdays & Gifts – $40 added. We spent $41 on gifts in July. Current category balance is $141.
Car Registration & Smog – $40 added. We didn’t do any spending here. Current category balance is $140.
Family Fun Fund – $300 added. We spent $475 from our family fun fund on our Yellowstone camping trip. That includes this Camp Chef stove, with this griddle that goes with it, and a propane tank. We also got bear spray, which we didn’t need to use, but will be added to our outdoor gear. Current category balance is $465.
Home Projects- $200 added. Mike picked up some things at Home Depot for some projects around the house. The category balance is currently $84.
Garden & Orchard- $0 added. We didn’t spend anything in July. The category balance is currently $112.
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 the year. 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 post.
We started making payments on the $50,000 loan in April. Our payments are $1,502 per month.
We also have another $20,000 that will be due by the time everything is done. The total cost is $70,000 (plus about $3,000 of interest on the $50K loan if we pay it off in 2 years).
Our contribution to our solar goal in July was $4,832.
That brings the total we’ve saved toward paying for solar to $16,524.
The way we have our it set up in our budget is kind of like a sinking fund. We put money into our “solar” category each month, some months it is a lot, some months it is a little. There is an automatic payment of $1,502 toward the solar loan each month that comes out of that budget category. At the end of July the “Solar” category balance was $9,516. In addition to paying the solar loan, the balance in our solar category will go toward the additional $20,000 over the $50,000 loan (total will be $70K). They haven’t installed anything yet, so we haven’t had to paid the rest of the funds yet (They’ve been promising “by the end of this month” since April.)
I made a chart to keep track of our progress. I color in a little square for each $250 we put toward our solar purchase.
How About You?
- How did your budget and/or debt repayment go in July?
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How has the switch back to Airbnb been? Do you charge the same throughout the month or does it change? How many nights out of the month does it usually stay occupied? Do you do the cleaning when they leave? I’ve never known anyone who did it so I’m eternally curious.
I think of your family each time the media does a drought story in CA. Are you worried about water levels in your area? Have you thought about digging a well? I’m in NC where it’s not an issue, and as critical as water is, I’ve been wondering about it.
Gas here is down to $3.85 at Sam’s, so glad yours is heading in the right direction too. In SC, just 100 miles south, they are $3.24!!
Hi Jennifer! Those are great questions. On Airbnb you can set your minimum price and choose “smart pricing” which lets Airbnb adjust the rental price based on the demand in your area. You can also set the price for each night individually (ie charge more on weekends) or set a standard price that doesn’t change. We usually have ours on “smart pricing” so that Airbnb can adjust the price but not go below our minimum. We usually have it rented most nights. I think in 2019 (before we had our 2-year renter) we had it rented over 300 days. In July we had someone who stayed the entire month. We have another long stay coming up. We do the cleaning between guests ourselves. Some Airbnb hosts hire the cleaning out, but we it’s more convenient to do it ourselves since we are here on the property anyway. Let me know if you have other Airbnb questions and I might do another post in my Airbnb series. You can find my other Airbnb hosting posts here: https://www.sixfiguresunder.com/category/earning-extra/hosting-on-airbnb/
I woke up to the smell of rain today! I thought I was dreaming, but it actually rained! In August!! It’s not enough to pull us out of a drought, but we’ll take whatever we can get! Thanks for thinking of us! Digging a well hasn’t been on our radar. We have a spring/well on our property that feeds an old cement cattle trough from about 100 years ago (literally), that we might be able to use in dire straights. Plus our 2 week(ish) water storage. My primary concern with drought conditions here is FIRE! It happens all the time around here. Thankfully the firefighters get the vast majority of them out while they are small, so most don’t turn into a Caldor Fire or Camp Fire, but fires make me nervous about 6 months out of the year.
Hooray for gas prices going down!! I filled up at $4.59 this week, which is insanely cheap for around here.
Do you have emergency savings other than your sinking funds? Do you keep enough in savings to cover one year’s worth of expenses? Is that a goal?
That’s a great question Kathy! We don’t have enough to cover an entire year’s worth of expenses, but we have $25,000 of emergency fund savings. We that split between I-bonds, CDs, and a money market account. Because of our other layers of protection (including sinking funds, disability insurance, and being a month ahead of our expenses), we haven’t really had to use our emergency fund at all. Once we finish paying for our solar we will probably go back to aggressively paying off our mortgage, which will greatly decrease the “cost” of a year’s worth of expenses.
Always love reading your monthly updates! I was wondering which category items like toilet paper, personal care products, dish soap, etc fall into for you? Are you still making your own laundry detergent?
Those all fall into the “household misc” category. I haven’t been actively making my own laundry detergent lately, but I do have all of the ingredients on hand (I think!) so if the need arises in the future I can.