Debt Repayment
Now that we are using YNAB and living on last month’s income, it’s so much easier to make sure every dollar has a job. At the beginning of the month we took all the money we had earned in February and assigned it to our budget categories. We put $1,200 toward our debt on the 1st of the month.
As the month went on the amount budget to our categories changed around some, which is completely normal (who spends exactly the budgeted amount anyway?). At the end of the month we emptied all the extra from our categories and put it toward debt as well.
This month we put $1,306.92 toward debt. To put it in perspective, that’s 36% of March’s available income (income earned in February).
Income
Our total net income for March was $3584. It’s just chilling in the bank waiting to be spent in April (though we did pay a chunk of debt with it on the first just like we did in March). It’s really nice to know exactly how much money we have to spend/save/pay debt at the beginning of the month. Here’s how it breaks down:
Regular Income: $2969-– This is my husband’s regular monthly after-taxes take-home pay.
For those who are new here (or haven’t read the details of our income here), my husband is an attorney at a small law firm where he makes 30% commission on the work that he does. In order to regulate what would otherwise be a very irregular income, the firm gives him a draw. They keep track of how much he has earned versus how much he has been paid. When he consistently meets his draw he can ask for an increase. Since he is also in charge of his own marketing and bringing in his own clients (and he doesn’t have an assistant), there is some catching up to do from the beginning months when he was just starting out (just over a year ago).
Etsy Income: $518— This is my net income for the month. I spent $60 on supplies this month, which is much more than I normally spend.
Other Income: $98— Once again, I didn’t get to the (small) things I have to sell locally and on ebay. I did make a little side income from my blog though.
Spending
Tithing–$342 We pay a full 10% tithe on our income. To make it match up with our living-on-last-month’s income budgeting, this is paid on February’s income. It’s convenient to know what our tithing check will be on the first of the month.
Fast Offering– $10
Other Giving– $20
Mortgage/Rent– $0 We have rent-free basement accomodations thanks to my generous in-laws. While our unfinished basement dwelling isn’t much to look at, it’s a huge blessing for which we are super grateful.
Utilities– $0 Just so no one thinks we’re leaving anything out, the utilities are covered in our rent. We try to conserve water and electricity as much as possible to show our gratitude (which is why I’m wearing a hoodie with the hood on as I type this post).
Cell Phones– $20 We have dumb phones on my parent’s family plan that’s nearly a decade old. This is really the only category in our budget that rolls (a “sink fund”). Since I don’t write and mail my dad a $20 check each month I just let it grow until it’s worth writing a check for. I offered to pay him through PayPal, but he doesn’t have a PayPal account. He does do a lot of Amazon shopping, so I think I can set up a payment through Amazon. Does anyone do a person-to-person money transfer on Amazon?
Health Insurance– $114 This is through our ACA plan. You can read about our change in health insurance thanks to the ACA.
Dental– $23 Our dental discount plan.
Car Insurance– $195 This was a two-month payment. We just switched the payment schedule to paying monthly though, so it will be $97 every month from now on. We have our car insurance through USAA and love it. Besides awesome, easy to reach customer service, I love that they give us a dividend at the end of the year.
Food– $298 Our goal is always to keep our food budget under $300. We went right up to our limit because we were planning for April being a no-spend month.
Gas– $502 Our goal is always to keep our gas budget under $500 and we just barely went over. That might sound outrageous, but my husband drives an hour to work each day and sometimes meets clients around town. The commute is worth the free rent though. For the record gas is around $3.79 here.
Clothing– $25 The majority of our clothing budget ($21) went to dry cleaning. My husband wears a suit 6 days a week (M-F and Sunday). I thought buying suits was expensive, but that’s nothing compared to what we spend cleaning those things! I also bought some kids’ rain boots and a shirt at the thrift store.
Household– $40 We bought some toilet paper and a few random household things. We put our Dollar Shave Club subscription on hold– I love that you can do that. Since my husband makes each cartridge last a month, we are stocked up for a while. I ordered a 10 lb bag of citric acid
Lawyer Marketing (Food)– $12 This is my husband’s food budget for a weekly networking meeting he attends. He usually spends $6 per week, but he missed a few meetings this month because they conflicted with court appearances.
Lawyer Marketing– $161 We have a year-long contract to put an ad in a local publication. It’s not having much in the way of results, so we downsized to the smallest (cheapest) ad to ride out the rest of the contract.
Law Practice– $44 Monthly subscription to my husband’s law practice management software.
Etsy Supplies– $60 (only $20 from the budget, the other $40 was on Amazon with gift cards). I was out (or so I thought) of two sizes of bubble mailers that I regularly use. After I placed my order on Amazon, I remembered that I had moved the box still partly full of the larger size when I was reorganizing the room. I should be good on that size for a while!
Etsy Fees– $60 This includes listing fees, transaction fees, and all the shipping labels that I buy and print through Etsy. I know my Etsy bill at the beginning of the month (it’s calculated for the previous month), so it’s easy to budget the right amount and not have to guess what it’s going to be.
Birthday & Gifts– $21 We didn’t have a friend birthday party for my daughter this year, just a family one, but she did bring birthday treats to school. Since they won’t let you bring anything homemade we had to (gasp!) buy something. She brought suckers and clementines (we drew funny faces on them). I also mailed a package to my sister for her baby shower. I used my own strategies on the gift, but I had to pay $6 to mail it Priority because I’m a procrastinator.
Car Repairs– $350 Ugh. Save the worst for last, right? On March 31st my husband took his car in to have the brakes checked. The pads were gone and the rotors were damaged and had to be replaced. They were fine at the last oil change. Grrr. They replaced some belts too. This is half of the bill since it came right at the end of the month, we decided to divide the damage between the March and April budgets, though he paid in full with a credit card.
Well there you have it folks– all the gory details of March’s budget! Stay tuned to see how we spend March’s income in April and how our debt payment turns out. So far it’s looking better 🙂
How did your finances go in March?
Some links in this post are affiliate links. For more info check out my disclosure page.
I’d appreciate a series on how to make money blogging. You write very well. I have a blog but it’s not monetized at all.
March:
Electricity: $1100 unexpected bill. We’ve lowered our thermostat by 3 degrees now and figured out we need to replace our heater filter every 2-3 weeks! The joys of being first-time homeowners..
Mortgage: $833
Childcare: $800
Tithe: $721
Save: $500
Food: $500
Gas: $300
Phone: $169
Car insurance: $108
Ticket: $90 (oops)
Water/sewer: $88
Garbage: $21
Internet: $18
This week I posted a list of blog links including several on monetizing your blog that might be helpful! http://girlonthemoveblog.com/2014/04/22/links-im-loving-blogging-tips/
Thanks Anastasiya! I am pretty new at making money blogging, but I have read some great resources. My favorite is an e-book by Ruth Soukup
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Super motivating! Kuddos to you and your husband. I love the fact that you make sure to honor God first with your tithings even while paying off debt. Thanks for sharing!
Thanks Jesenia! 🙂 I’m glad you stopped by!
I don’t know if you talked about this and I missed it… but how did you transition to paying this month’s bills with last month’s income? Since we bought a new to us second car with our savings and tax money (we’re debt free) things got a little pinched especially because my husband has to pay for business trips out of pocket and is reimbursed but sometimes the credit card bill comes due before the reimbursement check. Anyways, I guess it forces me to be careful with my spending because our account gets so low before pay day. And I do not want to start the habit of using the emergency fund to cover us just for those days because before you know it… it’s gone! I’m off to check out YNAB.
We used extra in Jan and Feb (which consequently had low debt payoffs) to get the credit cards paid up. We pay them off every month anyway, but they always have the previous month’s expenses on them. So essentially we were paying for a month an a half of expenses during those two months. That got our previous months caught up and ready.
Once the bills were all caught up and current, we borrowed from our emergency fund for our “income” for our first month on the living-on-last-month’s-income plan. We took out the actual amount that we earned the previous month, so we would really know what it felt like (and so we weren’t cheating). The plan was to pay back our emergency fun with our tax return (which came the next month). That’s what we did. If I remember right, our tax refund didn’t quite cover what we took out, but it was pretty close.
The other way is to build up your “buffer” (one month’s living expenses) as you go by putting aside extra money each month (just like you would do save up for anything else). The YNAB classes talk more about it. You can definitely benefit from YNAB even before you are living on last month’s income!
I can’t tell you how nice it is to be living on last month’s income. There is never any stress when a credit card bill is due. All the money to cover it is just sitting in the checking account. It’s a feeling of peace. And I love that we’re giving every last cent a job to do, so I know that we are putting everything we can toward debt.
I hope that helps Jerilyn. Let me know if it doesn’t make sense. 🙂
Yes, it does. The problem I am running into is my husband’s work expenses. He has to pay for his trips up front and then is reimbursed. Good for points, not so good for me budgeting. 🙂 we often have to pay the credit card bill before the reimbursement. I feel like I spend the whole month planning and transferring money back and front. Some months drive me nuts!
Thank you for being so honest about your finances! I’m sure this is giving a lot of hope to others in similar situations. You guys are doing so much to save and it’s a great example to your kids!
Thanks Carrie! It’s my hope that others will be encouraged to attack their own financial goals and get some frugal inspiration to do so 🙂 Thanks for stopping by!
Stopping by from SITS Sharefest and I truly appreciate your honesty in this post! Very motivating to keep me on track for my budget and I can’t wait to read some of the links you included in this post!
Hi Julie! Thanks for stopping by! It does take some guts to put your real numbers out there, but usually people are kind and not judgmental. It also gives me some accountability since I know I’ll be telling everyone about how I spend my money!
You guys are doing an awesome job on focusing on repaying all debt! And we’ve had all too many car bills recently–we’re just hoping our cars keep running till July–only a few more months and we’re going car-free, I can’t wait to not have that responsibility and the bills that go with them!
Wow car-free! That’s pretty cool! I bet that’s going to save you so much money! Are you in walking or biking distance from everywhere or will you use public transportation? Here’s hoping your cars last a few more months!
Hi Stephanie,
I came across your post through the Saturday Sharefest #SITSSharefest . I also have a personal finance blog and I have often thought about doing a detailed income in/income out post like this one. I love how you break everything thing down for your readers. It’s so personal where I feel like I know you just based on “how” you spend and save. Good luck with your financial goals and I will be checking back often to read more of your posts.
Hi Danielle! That’s for stopping by! That’s fun that you feel like you know me just from reading how we spend our money 🙂 It’s nice to meet you!
Stephanie, I had to smile as I am sitting here reading this post also in a hoodie with the hood on and pulled tightly…we are so much alike! Another thing we do is we all wear winter hats OFTEN in the house…sometimes that’s all you need to keep your whole body warm. Granted we keep the heat at 67-68, but I am always freezing regardless.
Great job on the Etsy income! I’m glad that you had a good number on a month where you had lots of fees and supplies–that must help soften the blow a little of that amount eating away from your profits.
I’m guessing you are a one-car family, but I can’t quite remember. I’m also assuming your car is paid off. What year is it, and how many miles are on it? Do you have a plan NOW for once it needs to be replaced? Just curious.
We did SO good (like never before!) in the last 2 weeks of our budget that we had an extra $150 to put in savings instead of sending to Capital One! 😛
That’s exciting that you had an extra $150! Way to go! That’s a big deal Liz 🙂
I’m glad I’m not the only one who bundles up indoors. Even though it’s only 60 degrees in here, my kids run around barefoot on our cement floors and they are never cold.
We have 2 cars. My husband takes 1997 Camry to work and I have a 1997 Plymouth Grand Voyager minivan. I have to pick my daughter up from kindergarten every day, but other than that we are usually at home. When we got places together we usually take my husband’s car to save on gas. We bought them each used. I think the van has 230,000 miles and the car has 180,000. We don’t have a fund yet to replace them. We used to do “sink funds” where we would put a little bit in a lot of categories to save up for different things we pay annually like our life insurance premiums or at random times like a new-to-us car. Since we got serious about the debt we stopped that, so we wouldn’t have lots of money just sitting around. The months we have those payments or incidental expenses, we just won’t pay as much on our student loans.
If one of our cars died tomorrow, we could borrow from our emergency fund to get another car and then pay our emergency fund back in a couple months (which would mean no debt payments those months). Maybe our cars will just live forever?! Or at least outlive our debt? It’s probably not likely, but one can hope, right? 🙂
Getting ready for canning tomato products?
Nice guess Heidi, but we won’t can any more tomatoes until the end of summer! My tomato seeds are just sprouting indoors right now!
The month of March was insane for us. The hubs was laid off at the very beginning of the month. So we started the free trial of YNAB and figured out exactly what we would do. We LOVE LOVE LOVE YNAB. I have already paid for the software. It definitely keeps us on track. Also we were able to move money into checking from savings to put us a month ahead so that I was able to budget us like that from the beginning
We decided to reign in a lot and live off of just my income until he found a new job. Fortunately I make enough for us to live on with a few minor extras. Unfortunately, eBay and half.com were not good to us in March so the extra 50-100 that I was used to was only $27.
We haven’t made any extra payments to our debt. Right now we are $7040 in student loan debt. We have no other debt. Due to YNAB we were able to adjust and pull money from the fuel budget to the grocery budget to account for a little extra expenditure since we stopped eating out.
Thanks for the YNAB recommendation. Best idea ever 🙂
Good for you for making one-income work! That’s a situation where lots of people would justify getting into credit card debt or other things that would create more problems in the future. Best of luck to your husband for finding a new position. You’ll be settled into the one-income thing and be able to put his income toward debt and you’ll be debt-free in no time! That could be really close! I’m excited for you CeCee!
I’m glad you are loving YNAB too! I’ve found that it’s so much easier to keep track of every dollar that way, so nothing gets lost. That’s great that you could use savings to have a buffer right away. I love the live-on-last-month’s-income mentality!
I really want to see a menu of what you eat during the week. We cook mainly from scratch too, but I can’t really seem to spend less on groceries. P.S. I did start making bread sometimes. I was forced to because we eat so much of it I can’t buy enough of it during my weekly grocery shopping trip (not enough room in the freezer).
Thanks for stopping by Cat! That is a good idea. I will talk about what’s on our menu in one of our no-spend month updates in the next couple weeks. 🙂
That’s exciting that you’ve been making bread sometimes! Fresh bread is so yummy!
Love your budget! You guys are doing awesome. I know what you mean about car repairs. I hate them too, but I figure it is better to keep what we have going for as long as we can. You are doing so well with Etsy. I have been considering giving it a try but not sure what I would sell.
Thanks Sicorra! We want to keep our cars running as long as possible. 🙂
You guys did great, Stephanie! We want to get to the place someday where we can run a month ahead on our budget too. Very curious to see what you’re up to with the citric acid. Gonna share that? 🙂
Thanks Laurie. I’ll be filling you in on the citric acid in the next couple weeks 🙂
Just when I think we’re getting on top of this debt thing, I have another major expense coming at me: braces for my 9-year-old’s teeth. Phase 1 now (or soonest) is about $3,200 and Phase 2 when she’s a teen and all her permanent teeth are in her mouth is about $8,500, for a grand (approximate) total of $11,700!
Thank goodness my husband has a good dental plan. But we aren’t sure (yet) just how much will be covered. So far, I have $1,300 saved for my daughter’s teeth/mouth issues. If I want to avoid going into major debt just over this issue, I will need to save another $100 per month for 5 years to pay a good-sized chunk of phase 2.
But better to start saving for phase 2 now, then have that whopping big bill 5 years from now. And I really can’t say that I haven’t been warned that it’s coming. Going to have to reorder the savings/debt repayment to save for phase 2 of my daughter’s jaw/teeth realignment plan.
The fun never ends.
Yikes! That is a lot of money! I think starting to save now is a great idea. Is it normal to start braces so soon? When I was nine I don’t think I knew any kids who had braces. My kids are younger than that, so we haven’t even thought about things like orthodontics. It doesn’t sound like very much fun 🙁
Hi again Stephanie. We could wait and do it all when she’s in her teens. But it would be a lot longer, harder process then. Also, the tops of her bottom front teeth are beginning to make indents in the roof of her mouth behind her top front teeth when her mouth is at rest. This will only get worse and start causing her discomfort. So best to get that addressed now with a bite plate retainer.
A lot of kids in grades 2, 3 and 4 start getting a little ortho work done to pave the way forward and make total braces in their teens a shorter process.
That makes sense Nathalie. We just haven’t reached that stage with our kids yet. I hope it goes well for your daughter!
Nice Etsy income!! And BTW I really enjoyed your Etsy series as well. I just wish I could think of something to sell as well. Looks like fun owning your own business.
Thanks Liz! I’m glad you enjoyed the series. It’s nice that it has become pretty reliable, though it fluctuates still. I’m sure I could grow it more if I created new items and did some marketing, but my time is split between other endeavors.