I love getting to sit down and chat with you at the end of each month! It’s a great chance for us to review our finances a little more thoroughly than we probably otherwise would.
If this coversation feels a little one-sided, feel free to chime in down in the comments and share how you’re doing on your own financial goals. I really do love hearing how you’re doing!
We have some biggish changes with our budget in the coming months. Here’s a little preview:
Food budget
We are making some changes to our food budget, though hopefully not the actual amount we spend. We’re trying to eat healthier, so we’re challenging ourselves to avoid buying processed food. We’ll also be buying more produce and whole grains. I’m excited to share our big monthly shopping trip with you (hopefully next week!) so you can see how we do!
Allowances
For the first time ever we are giving our kids an allowance. We have had our kids do chores to earn money off and on, but we were never very consistent. We developed a system based on the ideas in the book The Opposite of Spoiled. After we have a little history with this, I’ll do a whole post on the way we do allowance and how it works out for us. Stay tuned for that.
Mortgage
I’m not giving away all the details yet, but I will say that we’re refinancing our mortgage. My amazing husband will be writing a post soon that will explain what we’re doing, what our options looked like and why we made the choice we did. I’ll leave it at that for now, which leaves all the budget nerds in suspense! 🙂
If you want to see me walk through our budget, check out the video below! In the video, I show you what we do with money leftover in our categories at the end of the month (hint: it depends on what the category is), as well as show you what we spent in each category. I’m also showing you how we set up our budget for next month!
Okay, onto the numbers from February 2018!
Income
Our total income for February was $9,357. Since we live on last month’s income, this is money that we’re waiting to spend in March.
Attorney Income (Day Job)– $6,346 Mr. SixFiguresUnder has been working full-time as an attorney for the state of California since the fall of 2015. His actual take-home pay was $5,422 but I add back in the cost of the benefits (insurance, dental, vision, parking, union dues and retirement) that are automatically taken out of his check so that you can see what happens to the money that never makes it home.
Attorney Income (Private Practice)– $658 On top of working full-time, my husband has a part-time private law practice on the side. He started it to help speed up our debt payoff and because he had clients from his days at a small firm that didn’t want to let him go. This income fluctuates greatly from month to month.
My Income (Blog)– $2,353 The income that I report is the income that I received this month minus all of my blogging expenses. Of this, I’m setting aside 25% for taxes ($588) and distributing $1,765 to the family checking account as my paycheck. Last year I set aside 30% of my blog earnings and it more than covered our tax liability for both of our businesses.
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Ruth from Elite Blog Academy is hosting a free blogging webinar in a couple of days that teaches the basic framework for successful blogging. If you have any interest in starting a blog or making money with your blog, then I can’t strongly enough recommend signing up! You will walk away with great ideas and real strategies.
Spending
Each month we budget down to zero using last month’s income. When we started doing this, it literally changed our lives! For more about how living on last month’s income works and how you can get started, check out my free Guide to Getting a Month Ahead Financially.
Our spending in February came from the income we earned in January Here’s how we spent money in February.
Tithing– $1,002— We happily pay a 10% tithe on our total income from the previous month. You can read more about why we paid tithing, even when we were in debt.
Other Giving– $300– Other charitable giving this month.
Mortgage– $3,000 Our actual mortgage is just under $2,500, but I like paying a little over to make a nice even number. As you can see, we paid an additional $500 over our normal amount. That extra $500 goes toward the refinance costs. We’ll have a post up soon to show you what we are doing and why we’re doing it. You can read more about why we got a conventional mortgage instead of FHA or USDA and then why we didn’t wait for a 20% down payment.
Electricity– $260 Our electric bill was nearly the same as last month. Keep in mind this is for two households, as our renters are on the same meter.
If you’re in California, Toronto or Texas, you should definitely check out the OhmConnect program which lets you earn extra money for saving power. My kids think it’s super fun to save power now, especially since I put all of the money we earn through OhmConnect in our “Kids Fun Fund.”
Water– $45 Our water bill comes every other month, so I just set aside approximately half of what I expect the bill to be (or what it is).
Trash– $32 Our bill for trash service comes every other month, so I set aside half of the bill each month. We’re currently paying for curbside pickup, but that’s not the only way to do it. If you’re trying to cut every expense to its bare minimum, here are some ideas to save on trash service.
Internet– $50 After talking to our tax guy, we figured out how to split this expense. We divide this utility based on usage, so 20% to our household, 20% to the rental, and 30% to each of our businesses. But to keep things here simple and relevant, I just put the entire cost.
Home Phone- $4 Since my husband works at home a day or two each week, we decided to get a home phone for him to use. It’s Ooma, which is internet-based, not a traditional land line. The monthly service charge is minimal and the set-up (hardware, etc) was under $100 (that link will get you a $20 Amazon gift card on top of it!).
Republic Wireless Cell Phones– $14 We’ve been using Republic Wireless as our cell phone carrier for over three years now. This covers the cost of service for my phone, including all taxes and fees (we’re on the Republic Refund plan from a few years ago which is no longer available). My husband also has a Republic phone which he uses for his private practice, but that’s a business expense, not a family budget expense. If your cell phone bill is killing you, I definitely recommend that you check them out!
Health Insurance– $408 We have insurance through my husband’s employer. This is the portion of the insurance premium that his employer does not cover. It includes health, dental and vision insurance premiums and comes straight out of his paycheck (so this money never reaches our hands).
Car Insurance– $140 Our auto insurance at USAA is fabulous! In addition to the wonderful coverage, they also give us dividends at the end of the year, which is always a nice treat. We’re able to get insurance with USAA because my father-in-law was in the service years ago. If you, your parent, or your spouse were in the military, you’re probably eligible for USAA too!
Food– $373 This year I’ve committed to showing you exactly what we spend our food budget on. At the beginning of the month I ordered a 40 pound box of boneless skinless chicken breasts from Zaycon Fresh. We’ve been getting about 2 boxes of chicken from Zaycon per year. I posted the breakdown of our big monthly grocery shopping trip and a video of our mid-month grocery shopping trips.
Gas– $370 Gas around here is still at $2.97/gallon. It’s a little cheaper at Sam’s Club, but since I’m only there once a month, we don’t take advantage of that very often.
Parking– $155 Working downtown means paying for parking. It comes straight out of my husband’s paycheck, which means it is paid for with pre-tax dollars, a small consolation.
Clothing– $96 Between seasonal clearance at Walmart and 50% off day at Goodwill, we bought a lot of clothes and shoes this month! They were all great prices, but it still adds up. At the thrift store I found nice winter coats for two of my children that will fit them next year as well. I also got tennis shoes for all four of my older kids, and some dress shoes too. I even bought a few things for myself (I’m at this awkward post-partum-nothing-fits stage), some at the thrift store and a couple of things from Thred-up using some credit that I had.
Household– $123 We got a few toiletries, a new kitchen thermometer, a new forehead thermometer, dishwasher soap, dish soap, generic replacement brush heads for electric toothbrushes, a waffle maker from the thrift store (so we can make them twice as fast), and a few other random things like batteries and cupcake wrappers.
Fun– $30 We paid a registration fee for a wrestling tournament our oldest son competed in (he took second place!) and paid our admission to the tournament.
Animals– $36 We bought two 40 lb bags of chicken feed and 35 lb cat food.
Tax Prep– $90 Our tax advice and preparation plan allows the cost to be spread over the year.
Supplemental Property Tax– $158 The property tax that is included with our mortgage doesn’t include the increase in taxes that comes from the reassessment at the sale of a property. California property tax law is a peculiar thing and we don’t need to cover all the details, but in short, when a property changes hands, the property tax bill generally goes up. This wasn’t a fun notice to find in the mail. If we set aside $158 each month, we’ll have the money when the bill comes again.
Vacation/Family Reunion– $300 We have a couple of road trips and a family reunion planned for 2018, so we’re designating some dollars to those expenses.
Allowances– $30 Partway through the month, we started doing allowances for our kids. I will explain all about our system in an upcoming post, but if you want a sneak peek, check out the book The Opposite of Spoiled.
Sinking Funds
Now that we’re done funneling every extra cent toward debt, we are using sinking funds in our budgeting. This is money that we set aside each month into certain categories where it builds up until we need it.
The amount in bold is the amount that was added to the fund. Any spending from the fund is noted in the comments, along with the current category balance.
Home Projects– $0 We still haven’t got to most of the projects that we had planned when we funded this category in January. We did spend $47 getting some soils and peat moss for planting blueberries, blackberries and raspberries. We got the plants themselves from family and friends. My husband made a temporary raised garden bed with some scrap wood we had. So far we have planted strawberries that we got from friends. The current category balance is $1,011.
Dental– $30 This is always the first sinking fund we cut when things are tight because dental expenses come up so infrequently, but we actually funded it this month! We have $60 in dental right now.
Medical– $100 We used $10 for a prescription for our littlest one. Our current balance for medical is $330.
Car Repair– $300 Hooray for putting money into this fund and not taking any out! With two older cars, any month where we have no car expenses is a good one!
Car Registration & Smog– $40 We paid $120 to renew the registration on my husband’s car. We currently have $24 in this fund.
Christmas– $100 We currently have $200 in our Christmas fund.
Life Insurance– $70 If we put aside $70 each month, we will have our premiums set aside when they’re due.
Gifts– $100 I was going to plan a child’s birthday party that’s coming up quickly, but I didn’t actually get any of the shopping for it done in February. In fact, instead of spending in this category, we have a credit since we returned something that I had purchased for my husband’s birthday in December (I bought two similar things to see which he prefered). Our current balance is $138.
Retirement– $631 With my husband’s state job, this amount comes directly out of his paycheck and into his state retirement fund.
College Savings– $100 We contribute $25 per month per child to 529 accounts (for the older four). It’s not much, but it’s a start. More on our decision to start saving for college in this post.
Savings Goals
The total we want to save in 2018 is $26,000 ($15,000 toward our emergency fund and $11,000 to my IRA). Right now we are at $5,822, which is 22% of our goal!
Emergency Fund
Our goal for 2018 is to reach $25,000 in our emergency fund. In February we put $322 toward our emergency fund. Our first priority in February was finishing up my IRA for 2017.
IRAs
In February we contributed $2,993 to my 2017 IRA bringing the total to $5,500. The surprise escrow overage refund from January is included in this. We’ve now fully funded my IRA with $5,500 for the 2017 tax year, so we’re ready to file our 2017 tax return.
For the rest of this year we’ll make monthly contributions toward my 2018 IRA limit, so we’ll be maxed out for 2018 and not have to make any special contributions at the beginning of 2019.
Because my husband has a pension plan working for the state, contributions to his IRA don’t have the same tax benefits as contributing to mine, so we’re just working on mine right now.
How About You?
- I’d love to hear about how your budget and/or debt repayment went in February!
- How is your progress on your financial goals for 2018?
- If you have any questions about how we budget, I’m happy to answer them in the comments or in a future post.
This post contains affiliate/referral links for products and services that we actually use and think are awesome! If you make a purchase through one of my links, I may get a small percentage of the sale even though the price to you is exactly the same.
What it the budget software that you use? I’m at the very beginning stages and want to find that works great for the long run. Thanks!
We give our kids allowances. I love it. It allows them to make money mistakes when they really aren’t terribly important; and it ends all the ‘gimmes’ at the store – the instant answer is, “Well, you have pocket money,” or “Save your pocket money.” It’s amazing how much less they actually want when they know they have to spend their own money on it!
We went on vacation the first week of March and while we were gone, we had someone make a start to the kitchen renovation. We came home to a half-finished kitchen (we knew it wouldn’t be all done while we were gone – we still have to make some decisions re: doors and counters) and a messy house, between all the boxes for the renovation plus the boxes of kitchen stuff everywhere. I want to go on another vacation now so I don’t have to face any of it!
Yes! That’s the idea of the allowances, giving kids what they need to “practice” with money, just like we would provide them with a trumpet if they wanted to learn to play trumpet. They will save for what they want and make money mistakes when the stakes are low.
Congrats on the half kitchen! I’m can definitely see how that would make you want to go back on vacation! It’ll be so exciting when it’s done!!
I just found your blog last week and am loving it. You are a real inspiration! We are also trying to switch to a meal plan with more whole grains and produce. I’d love to hear what meals you make!
The one thing that really surprised me was the cost of chicken feed. We’ve had chickens for over 15 years and have never paid more than $15 for a 50 pound bag of layer feed. Maybe it’s just your location. You could always try making your own, considering it is mainly ground corn.
Hey Stephanie! Good catch on the chicken feed. That was a mistake. I went back and looked and we bought two bags of chicken feed (it’s about $12 for a 40 lb bag) AND a 35 lb bag of cat food. I had forgotten to write the cat food.
I will share more of our healthy meals in future posts. 🙂
Very interesting! I didn’t know certain jobs affected tax benefits for IRAs. Is it just because it affects his income level? I’m curious about looking more into this since we can only max one of our IRAs each year. Thanks for the mental stimulation! 🙂
Hey Krystal! It’s doesn’t have anything to do with his specific job or income level, it’s because he has a pension at work. 🙂
I’m looking forward to hear about how the allowances go with the kids! I read the YNAB book and I thought the chapter about teaching kids to budget was the most enlightening. Better to let them make mistakes and learn with small amounts then wait until later when they’re making mistakes with large amounts! I’ll have to check out The Opposite of Spoiled too.
I loved that chapter too, which is what made us want to read The Opposite of Spoiled! 🙂
I don’t want to start any arguments here, but I have been questioned about this myself, and I can’t seem to get consistent answers when I ask others, so I thought I’d throw this question out here.
1) When money is taken out of your paycheck for taxes before you get it (as is the case for most who are employed by others) does one tithe on that tax money that one never sees? Basically, does one tithe pre-tax or post-tax?
2) If one tithes on the entire, pre-tax paycheck, which means including the money that was taken out for taxes by the employer to send to the government, then if one gets a tax refund of some of that money from the IRS, does one pay a tithe on that refund?
I’ve heard compelling (and impassioned!) arguments for either side. I’d be interested to hear what the folks here have to say.
Good going on eating healthier! It’s worth it!
I’ve always been taught that it’s a personal choice. I think it’s something that is between you and your deity, and you do what feels right and comfortable for you.
Hi JD! I don’t think there’s a right or wrong answer. I would definitely say it’s up to you, as it’s a personal decision. For #2, I would say no since you’ve already tithed on the money you’re getting back.
I think allowances teach the children to budget at a very young age. I still make my budget based on the same principles I used when I was 8. Even then I had categories although they were just:
-Books
-Give
-Fun
-Save
Nobody taught me to budget. It was something I did on my own. Nowadays, I am thinking of revisiting my budget and get my act together about eating out too much.
I love that books got its own category! And how cool that you were just a natural budgeter!
February we made some progress, paid a little extra on my student loans. The big win was my husband finally started talking back when I’d talk to him about setting financial goals, paying off the debt we have, and what comes next.
That’s great Amy! Communication is huge!
Thanks for the update. I love reading these (and helped inspire me to do my own).
Can’t wait to hear about how eating healthier goes. My husband and I decided (recently) to transition to eating Vegan. We’re slowing cutting things out and trying to eat healthier. It’ll be interesting to see if we can continue to keep our food budget the same.
Congratulations! We’ve (husband and me) and have been switching every 3 months or so between eating vegan and vegetarian for the past 4 years. We let the children choose if they want to eat animal products or not and so far they’ve all decided that they want to eat meat and dairy still.
As long as you don’t start relying on the replacement meat products or the vegan dairy replacements your grocery spending will most likely go down. When we went grain free vegan our spending and hunger levels dropped dramatically.
Yes! I’m eager to see how being more intentional about eating healthy will affect our budget too! Good luck with your transition!
Do you have income from the renters or are they staying there rent-free? If you do have income from that, I am curious why it is not listed.
Our renters do pay, but so far we haven’t actually made any profit on it! We put more money into the rental than we made (which we knew was going to be the case, but we don’t mind because the rent is funding the repairs/expenses that would otherwise be out of pocket and we would probably put off indefinitely). It will be another couple of months before we recoup all of our costs. We keep the rental money in a separate account and are planning on setting most of it aside for the next year of so to put back into the rental (and some garage repairs). When we eventually start taking an income from it I will tell you all about it.
Just a question – if you have a renter, why isn’t that included in your income? Maybe you said and I missed it somewhere.
So far we haven’t actually made any profit on it! We put more money into the rental than we made (which we knew was going to be the case, but we don’t mind because the rent is funding the repairs/expenses that would otherwise be out of pocket and we would probably put off indefinitely). It will be another couple of months before we recoup all of our costs. We keep the rental money in a separate account and are planning on setting most of it aside for the next year of so to put back into the rental (and some garage repairs). When we eventually start taking an income from it I will tell you all about it.
I love reading these budget posts! And I second you on taking Elite Blog Academy. I took the course last year, after reading about it here, and I loved it!
Thanks! Your blog is looking great!