Real Family Budget Update – June 2020

It’s time for a family budget update (we’ll get back to food storage next week)!

If you know us, you know that we love to budget!  We love budgeting because it allows us to do what we want with our money and helps us reach our financial goals.

If you are not a budget lover, you might be confused when you hear me say that our budget “allows us to do what we want with our money,” but it’s true!  When we budget, we decide on our priorities and put our money there!

On the flip side, without a budget, your money just disappears and goes to whatever comes up first, instead of going to the things that are most important to you.  Want a little more help with that? Check out these money-saving tips for people who hate frugality.

But what if you’re budgeting but you continually get budgeting “surprises?”  I’m all for fun surprises, but being surprised by unplanned expenses is anything but fun.  I recently wrote a comprehensive article all about budgeting for periodic expenses.  Knowing how to handle periodic expenses will prevent those not-so-fun surprises and make your budget really work like a well-oiled machine!

If you’re new here, every month for six years we have shared our family’s real budget numbers.  I share what we actually earned, what we spent in each of our budget categories and how we are doing on our goals.

If you’re working on paying off debt this year we would love to have you join us in the Debt Smash-athon!  If you’ve got savings goals instead of debt, you’re welcome to join in too! You can report your June debt payoff (and savings) progress right here!

Now, let’s jump into the numbers. If you want to see the budget walkthrough in YNAB, checkout the video below.

Income Earned in June – $12,039

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 June, which has all been set aside to use in our July budget. (The spending section below shows the money we earned in May and spent in June).

Attorney Income – $6,856 Mike works as an attorney for the state of California.  This is his take-home pay after taxes, social security, and health insurance premiums.  Normally parking is taken out too, but when we realized that he would be working at home for a while, he cancelled his parking pass, which saves us $190 a month!

Blogging Income – $3,742 This is my blogging income after expenses have been taken out.  It fluctuates greatly each month.

Airbnb Income – $1,441 We rent the one-bedroom apartment on our property through Airbnb.  We have had a family staying there all month.  If you’re thinking about renting out your space, 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 June

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

Giving

Tithing – $995 We always pay a 10% tithe on our income.  This tithing (like all of our June’s spending) comes from the money we earned in May.  You can read about 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 make a donation to help the poor.

Monthly Bills

Mortgage – $2,781 This is our newly refinanced mortgage. If you still have dependable income, you should seriously look at whether it makes sense for you to refinance yours. As an example of the really big potential savings, Mike shares our experience with a true no-cost mortgage re-fi, with all the number details you could want. This might seem like an odd time to think about refinancing your mortgage, but rates are currently as low as they have been in the last 100 years. Anyone with a mortgage interest rate above three percent is likely to find a better rate now. A refi at a low rate puts real money in your pocket every month for the life of your mortage.  Check out the post to see how you might be able to save.

Electricity – $233 Our electric bill covers both our home and our Airbnb rental.

Car Insurance – $0 We didn’t have a bill in June.  I think it’s a combination of a covid rebate and prorating our bill from when we took Mike’s vehicle off the insurance.  Since he’s working at home, we’re just acting like a one-car family and saving on insurance and registration.  We have been so impressed with the service and coverage that USAA provides as both a bank and an insurance company. We’re able to join USAA because my father-in-law was in the service years ago.  If you, your parent, or your spouse were/are in the military, you’re probably eligible for USAA too!

Internet – $70 Having good internet at home is even more important now that Mike is working from home 100% of the time!

Water – $120 With our garden, I really have no idea what our water bill is going to look like.  It comes every other month, so I try to set aside about half of what I expect it to be (though I suspect even this may not quite be half).

Trash – $37 Our garbage collection bill comes every other month, so we set aside half each month.

Cell Phones – $47 This includes one Republic Wireless phone and a new phone using through Visible. We’ve had a Republic Wireless plan for many years. It offers a unlimited calls and texts and 1 GB of cell data for $20/month with no contract.  The nice thing about Republic Wireless is that any time you’re in wifi range, the phone uses wifi for both calls and data, so we rarely get close to the 1GB data limit.

We live in kind of a funny spot where Republic Wireless cell service isn’t available. That might sound crazy, but since they use wifi for calls when it’s available, it has never been a problem.  Until last year when PG&E started turning off our power for days at a time when fire danger is high.  Without electricity we have no wifi, which means we can’t call or text either.  Not the kind of situation you want in a potential fire!  So we found a great affordable carrier that does get service where we live.  It’s called Visible and it has both wifi calling and unlimited cell data (on the Verizon 4G LTE network), all for $25 a month!  We decided to try it out.  So far we’re pleased with it! This will be great to have when PG&E turns off our power in the summer/fall due to fire danger.

Another great option for affordable cell phones is Mint Mobile, especially if you want to bring your own phone.  I’ve had readers rave about their great service.  You can get data for a lot less than Republic Wireless.  Mint Mobile or Visible both look like they’re worth looking into if you want a cheaper cell phone bill!

Home phone – $5 We have a home phone as well. Mike mostly uses it for work as its generally better signal than any cell phone here, even over wifi. It’s through Ooma, which is internet-based instead of a traditional land line.  The monthly bill is a minimal $4.50 and the initial set-up (hardware, etc) was under $100.  If you want to give Ooma a try, that link should also get you a $20 credit (let me know if it’s not working).

Orthodontist – $61 Since our oldest gets her braces adjusted every other month, we’re treating this as a monthly bill rather than paying it all up front.  These payments will last for the two years that she has braces.

Disability Insurance- $151 We have been talking about getting disability insurance for Mike for years, but we finally did it in February.

Piano – $110 Our oldest started taking piano lessons (from a teacher who isn’t me) and it’s going really well.  The last few months she’s had socially distant lessons via Zoom.

Everyday Expenses

Food – $561 Did you see our epic grocery shopping trip after concluding our Quarantine Food Storage Challenge?  It was the biggest (and most expensive) grocery shopping trip of my life!  We split the cost between this category and our preparedness category (where we set aside money during our food storage challenge).  We also made several other smaller shopping trips and online orders during the month.

Fuel – $123 We mostly stayed home in June, but we went out more than we have in months.  We went to the park to play once, to the grocery store several times, the hardware store, and Mike had to make two trips to his office in Sacramento.

Houshold Misc – $442 We stocked up on laundry detergent and trash bags, got plastic organizing bins for reorganizing a few cupboards, restocked batteries (Office Depot had a deal where you get 100% back in rewards when you buy the big packages of Duracell AA and AAA batteries), bought snail mail stamps, restocked shampoo and other toiletry items, and renewed our Sam’s Club membership.  Conveniently it expired in the middle of March, just after we stopped shopping for three months, so we didn’t even miss it.  We also bought a simple broom organizer for the laundry room and a couple of cherry pitters.

Clothing – $30 We got a few clothing things, including a pair of shoes.

Animals – $75 We bought a bag of cat food and two bags of dog food, so we should be good for a while.

Kids’ Activities/School – $35 Our oldest needed the next level of piano books.  We’ve been having a lot of fun at home, including cleaning out our hot tub (well, cold tub) so we can cool off.  We’ve had some family fun in there with all 8 of us!

Allowances – $70 Because our allowance system is age-based, we increased this monthly amount when some of the kids had 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.

Sinking Funds

For most of our budget categories, we zero out what is left at the end of the month and send it to our mortgage payoff 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 balance unless we’re reconciling the account.  We track our budget categories and spending in YNAB.

Medical/Dental – $400 added. We had a $147 of medical expenses in June.  Current category balance is $3,390.

Car Maintenance – $300 added. We spent $102 on a new car battery for the Odyssey. Current category balance is $3,782.

Christmas – $100 added. We didn’t do any Christmas spending. Current category balance is $512.

Life Insurance – $75 added. Our premiums aren’t due until November, but if we put aside $75 per month we should have them covered. Current category balance is $605.

Birthdays & Gifts – $40 added. We didn’t spend anything from this category in June.  Current category balance is $228. 

Car Registration & Smog – $40 added. We didn’t spend anything in this category.  Current category balance is $421.

Family Fun Fund – $0 added. Mike went backpacking with one of the kids and they spent a little on water treatment tablets and a few other supplies. Current category balance is $745.

Car Fund – $550 added. This fund is new this year, to purchase a commuter car, maybe a used Prius, for Mike.  We’re planning to have $10,000 saved by the end of the year.  Mike has been driving our second van (the one we were going to sell after we bought our 8-seater) ever since his car was totaled by a deer. Except for the last 4 months, when he hasn’t been commuting at all. That probably won’t last forever though, so we’re preparing. Current category balance is $6,279.

Preparedness – $100 added. I’m using this category to restock our long-term food storage now that we’re done with our Quarantine Food Storage Challenge.  I spent around $600 from this category. Current category balance is $4.

Home Projects- $500 added. We had some more things to do for the garden project.  There will be a few more expenses coming up next month too. The category balance is currently $20.

Investing

Kids’ 529s – $125 We know that $25 per kid per month invested for college isn’t much, but we’re not as concerned about college costs as some people.  Scholarships, grants, loans, and jobs during school worked for us.  We may accelerate this savings later, but it’s not our highest priority right now. You can read about our decision to start saving a little for college in this post.

IRA (Steph) – $500 $500 monthly will max out my $6,000 IRA contribution for 2020.  Mike has about $700 each month deducted directly from his paycheck into a pension fund.

Mortgage Payoff Goal Progress

Our big financial goal right now is paying off our mortgage.  The original goal was to pay it off in 5 years. It looks kind of impossible on paper right now, but we’re hoping to figure out how to still make it happen! We’ve made some adjustments to our priorities, so if we don’t make it exactly in our five-year time frame, we’ll be ok with that too. You can read about our mortgage-payoff goal here and see the numbers for our most recent re-fi here.

We paid $1,476 of principal in our normal June mortgage payment, but didn’t pay any additional principal. We hope to be back to paying extra each month soon.

That brings our totals to:

Current balance (after June 2020 payment): $296,681

For reference:

Original balance of 15-year mortgage: $372,700
Balance at start of 5-year goal (Nov 2018): $363,171

Percent of 5-year goal reached: 18.3%
Percent of 5-year time elapsed (20 mo): 33.3%.  Yep, we’re behind!

The 6-month goal we set for Day 1 of the Frugal Fresh Start Challenge is to put an additional $25,000 toward our mortgage by June 30th, above our normal monthly mortgage payments. With covid, we adjusted some of our priorities and missed out on Airbnb income for a few months, with the result being that we’ve only put $8,216 toward that goal. We do have $10,195 waiting in our checking account, and that will go toward the mortgage once some of the current economic uncertainty is abated and we feel more comfortable actually making the payment.

You can get this hand-drawn brick house printable progress chart here.  I love that it has LOTS of spaces (365 in total) so that we can color it in often and celebrate our progress!  It would work great for paying off your mortgage OR saving for a down payment.

Whew!  That was a lot of numbers.  Thanks for reading our personal finances made public!

How About You?

• How did your budget and/or debt repayment go in June?

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