September 2022 Family Budget Update

September was a good month for income. That’s important because we have a big solar payment due as soon as our system gets final approval and is connected to the grid. Hopefully that happens soon because the amount we are paying for electricity every month is ridiculous (and just keeps going up). Our water bill was also atrocious this month (more on that one below).

The good news is that we kept our grocery spending to less than $250. We did that on purpose, knowing that we will have a big solar bill coming up. It feels good, especially in this time of crazy inflation, to be able to choose how much we want to spend on groceries and not have to completely submit to the current prices.

Gas, on the other hand, is still through the roof, as you’ll see below. I wish gas was something you could stock up on when the price was low so you don’t have to pay whatever the current price is!

Let’s take a look at our numbers for September. As always, feel free to ask if there’s anything that doesn’t make sense or you would like me to clarify.

Income Earned in SEPTEMBER – $16,936

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 September, which has all been set aside to use in our October budget. The spending section below shows the money we earned in August and spent in September.

Attorney Income – $8,698 Mike works as an attorney for the state of California. This is his take-home pay after taxes, social security, his pension contribution, and health insurance premiums.

Rental Income – $2,244 We rent out 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.

Law Firm- $4,000 Mike does some legal work on the side completely unrelated to his job at the state. He has had a steady stream of past and potential estate planning clients continue to come to him after he started working for the state. He had stopped taking clients for a while but now that he is working from home (not commuting 2-3 hours a day) he has more time. Accepting some clients again (instead of referring them to other attorneys) can help us pay for our solar system.

Blog – $1,994 My blogging income is still recovering from having it on the back burner during Covid when I started homeschooling my kids. I don’t pay myself every month, but I paid myself in September knowing that our final solar payment will be coming up soon.

Spending in September

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

Giving

Tithing – $1,181 We always pay a 10% tithe on our income. This tithing, like all of our September spending, comes from the money we earned in August. 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 – $2,380 We have a 15-year mortgage on our house. With mortgage interest rates going up quickly, we’re so grateful we were able to lock ours in at 2.375%. If you’re interested in the details of our Dec 2020 refi, you can check out all of the numbers and details.

Electricity – $544 This bill was a painful one because our solar should have been installed before the summer even started. The price of electricity keeps going up. We can’t wait to be using this money to pay for our solar instead of continuing to pay an electric bill.

Car Insurance – $101 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 – $260 We got a shocking water bill of $445. We had set aside $185 in August and had to budget the remainder in September (this bill comes every other month). Last weekend Mike discovered the reason. Most of our garden terraces are on timers, but the orchard terraces weren’t on timers yet. We water the fruit trees overnight, once a month. He had turned the water on the orchard and forgotten to turn it off the next morning, so the drip system on the trees was running for an entire month. Now looking up on the hill, standing out against the general landscape colored by drought, I see the vibrant green weeds growing through the woodchips around our young fruit trees. Sadly, our next bill that comes in November is also going to reflect part of this expensive oversight.

Garbage- $46 The bill for our curbside trash pickup also comes every other month so we set aside half of the bill each month.

Cell Phones – $84 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 three 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 have a Gabb watch for our oldest, which gives us the ability to call and text with her, but without many of the negatives of a regular smart phone.

Music Lessons – $0 We paused music lessons again because of an extremely busy schedule.

Everyday Expenses

Food – $234 We made a conscious decision to spend less on groceries in September knowing that we have a big solar payment coming up when we get connected to the grid. I didn’t do a normal big monthly grocery haul. We mostly ate from the pantry, garden, freezer, and food storage. We did buy dairy and produce, and we even got thirty dollars of pizza one night. No one in the family noticed any difference because we try to have enough food on hand (or growing in the garden) that we can go for several months before it starts making much of a difference.

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Fuel – $665 Gas prices went nuts in California in September. The very cheapest station in town got up to $6.29. Last time I filled up I was thrilled to find a station that was $6.05. It’s painful!

Household Misc – $648 Our electric company, PG&E, is notorious for shutting of power regularly to prevent wildfires. Sadly, their equipment has caused many of the largest, most expensive, and deadly fires in California over the last few years. To help mitigate the power outages, PG&E offered us a $500 rebate toward a generator or large battery to use during these outages. We ordered this large battery, so we ended up paying about half the cost after the rebate. Other than that, we had minimal normal monthly expenses. For the last year or so, those normal monthly expenses include a $12/mo Scribd subscription. We love the unlimited access to so many audiobooks, and the kids listen to hours and hours of books every month.

Clothing – $305 – We bought running shoes for two of our kids. I also did some clothes shopping so we could have something coordinating for family pictures.

Animals – $124 We bought 2 bags of cat food, 2 bags of chicken feed, and a bag of dog food.

Allowances – $84 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 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 $5 in September. Current category balance is $2,126.

Car Maintenance – $0 added. We spent $120 on an oil change and a new brake light and cover. Current category balance is $2,747.

Christmas – $200 added. We didn’t spend anything for Christmas 2022. Current category balance is $1,438.

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 $1,104.

Life Insurance – $75 added. Next year’s life insurance premiums will be due in November. Current category balance is $779.

Birthdays & Gifts – $0 added. We spent $0 in September. Current category balance is $180.

Car Registration & Smog – $40 added. We spent $0 in September. Current category balance is $140.

Family Fun Fund – $0 added. We paid a $150 for a deposit on a cruise that Mike and I might go on next year. It’s a promotion that makes it free except for this deposit. Current category balance is $567.

Home Projects- $0 added. We didn’t spend any in this category even though Mike did do some projects around the house. The category balance is currently $170.

Garden & Orchard- $0 added. We didn’t have any garden expenses in September. The category balance is currently $112.

Homeschool – $69 We already had about $90 in this category from last month. I bought a subscription to Nicole the Math Lady and it has been amazing! We use the Saxon match curriculum, which I love, but sometimes the grading stacks up and gets overwhelming for me. With Nicole, the kids enter their answers online as they do the problems and they get immediate feedback on each problem. I can set how many tries they get on each problem. I go over the ones that they need help with, but otherwise I just get an email with their results for each lesson. It’s better for them because they know immediately if they have the answer right or not (rather than waiting for me to grade it) and it’s a lot of work off of my plate. Also, there is a teaching video of each lesson, so the kids don’t have to wait until I am available to work with them one-on-one, they just watch Nicole’s lesson. I love it and wish I had found this program years ago. It’s well worth the money (and it’s priced for the family, not per student!). If you’re a homeschooling family who uses Saxon, I definitely recommend checking it out (here’s a discount code: 5PEROFF_1478 ). Current category balance is $0.

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 $1,100 each month deducted directly from his paycheck for retirement.

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 of getting solar 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 September was $1,703 which isn’t much more than our monthly payment on the loan, but with our September income, we’ll have more for next month.

That brings the total we’ve saved toward paying for solar to $22,231.

The way we have 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 September the “Solar” category balance was $6,470. In addition to paying the solar loan, the balance in our solar category will goes toward the additional $20,000 over the $50,000 loan.

We are almost all set up. The panels are installed and working during sunny hours, but we are not hooked up to the grid yet. When we are hooked up to the grid, what we produce (over what we use) during sunny hours will be sent back to the grid and will help offset what we use during non-sunny hours. Our system doesn’t include any batteries.

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.