Let’s normalize talking about budgets. Here are our actual expenses and income numbers for September

Want to see what our real budget looks like? Every month we share our family’s actual budget numbers with you because we think talking about personal finance shouldn’t be taboo. In fact, talking about budgeting is a great way to learn. Your budget won’t look like ours because your priorities are different, your family is different, and your location is different. But a lot of what you’ll see in our budget could still apply to yours.

So look at the numbers if they’re helpful, but also, look past the numbers and focus on how you can apply these budgeting strategies to your own situation.

Okay! Let’s just jump into the numbers for September 2023!

Spending in September

For years we tried different budgeting techniques with limited success. Then we discovered the concept of living on last month’s income, and it was awesome. If that doesn’t mean anything to you, check out this video all about living on last month’s income  and how it changed our lives or this article on how you can get started.

We sit down at the start of each month and start on the new month’s budget by first calculating the income we earned the month before. In September, we budget and spend what we earned in August. Because it’s already September when we do this, we know exactly how many dollars we have to work with. We’re not going to earn any more August dollars once September starts, right? So we start the September budget by taking every dollar we earned in August and assigning it to our September budget categories.

We don’t have a crystal ball, so on the first of September, these dollar assignments area really just best guesses and goals. We’ve been doing this for years, so we have a lot of history we can rely on, but we have never had a month where we spend exactly the same amount we first allocated in every budget category.  Our September 1 dollar assignments are a first cut; our needs and priorities often change during a month.

The key is not to get every category spot on; it’s just to make sure that if we decide to spend a larger  number of dollars in one category than we had originally assigned there, we have to take those dollars from an existing allocation in a different category. The thing we can’t do is spend more in September than we earned in August. There’s some give and take in the details, and that’s alright. In fact, it’s necessary! A budget needs to be flexible in order to be successful!

Here’s our actual September spending in every budget category.

Giving

Tithing – $1,165 We start out the month paying a 10% tithe on our income. Like all of our September spending, our tithing comes from what we earned in the month before, in August. We often get questions about this. You can read our thoughts on tithing here.

Fast Offering – $100 Each month we take one day to go without food and drink (fasting) and contribute to a program that helps people who need it more than we do.

Monthly Bills

Mortgage – $2,823  We have a 15-year mortgage on our 2200 sq ft house in Northern California. We’re so thankful to have locked in our mortgage interest rate at 2.375% when we refinanced in December of 2020 (all of the details and numbers are here.) We currently have $182,500 remaining on our mortgage.

Electricity – $6 Our electric bill is so low (just an unavoidable service fee) because last year we installed solar panels on our property. That was a $70,000 investment that we are still paying for. Right now we produce more than we use, so we will have some credit toward our bills in the winter. Since this is our first year using solar, we are still being very careful with our usage while we wait to see how the first full year of solar production turns out. In practice that mostly means no using the A/C (or heat now that it’s getting cool) and line drying our clothes when the weather allows.

Car Insurance – $211 Our car insurance went up pretty significantly when we got a 15-passenger van so we could drive ourselves (8) and our Ukrainian refugee family (4) together in one vehicle. See this post for details. It’s not just the new vehicle, though. With 12 people in the household, each with their own appointments and activities, we’re also driving a lot more miles and insurance premiums go up with more expected driving.

Internet – $70 We have cable internet through Comcast. When we bought our home six years ago, we invested $5,000 into getting high speed internet brought to our property. It has been well worth it every single day since then.

Water – $163 Our water bill is always higher during the summer because we irrigate the garden and fruit trees. We are looking forward to the rainy season coming soon!

Garbage- $49 Like the water bill, our trash pick-up bill comes every other month, so each month I set aside the money for half of the bill.

Cell Phones – $201 We now pay for seven cell phones: four for our family, and three for the Ukrainian family that we sponsor. They are all through Visible. Visible is a Verizon subsidiary that offers no-contract plans with wifi calling, unlimited cell calls, and unlimited data on the Verizon network. We’ve been using them for years. You can’t beat paying just $25 per phone each month with unlimited data. We also have a Gabb watch and a Bark subscription.

Music – $0 Our music teacher generously offered his time and talent to teach our 11-year-old Ukrainian girl free of charge. What a blessing!

Everyday Expenses

Food – $652  It’s true that food prices are higher than they were a few years ago, but I still believe almost everyone can spend a lot less than they currently do on groceries. You can learn all about my strategies and method in Grocery Budget Hero now. Get $20 off with the coupon code STARTNOW.  That puts your total cost at $59, and I promise you’ll earn that back many times as you build your grocery budget hero skills.

Fuel – $868 Compared to last month, this gas spending is looking lovely! With six of our own active and involved kids to drive around and our four Ukrainian friends who also have full schedules, I spend many hours on most days on the road. I combine trips and try to do things in the most efficient way, but it still adds up!

Household Misc – $199  We have an Amazon subscription for some of our normal toiletries that comes every six months. We also randomly got charged from the parking garage in Sacramento where Mike used to park before the world shut down in 2020. That’s refunded now, but it wasn’t before the end of the month, so it still shows up here this month. There were also a few other household and hobby purchases.

Clothing – $318 – I had to get new running shoes for my oldest son since he had outgrown his size 15 pair. In case you’re wondering, the pickings get slim (and pricey) when your feet get ridiculously huge. I ordered several pairs for him to choose from and then returned all but one. For one of the returned pairs, I accidentally got Amazon credit instead of putting it back on the credit card. There were a few other clothing purchases as well.

Animals – $105 We bought two bags of chicken feed, plus cat food and 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.

Sports – $260 Our two high schoolers ran in a huge cross country meet 8 hours away. They stayed in a hotel for two nights and even went to the beach. The team paid for most of the trip, but families were asked to contribute $100 per child. We also paid $60 for the monthly fee for club wrestling.

Refugees Misc – $40 I decided to have a separate category for the expenses for our refugees that aren’t covered in other categories. We spent $40 on bus transportation for the Ukrainian mom to attend her daily English classes.

Sinking Funds

For our normal budget categories, we take out any funds that are still left at the end of the month and send them toward our big financial goal. For example, if we started the month with $300 in our household miscellaneous budget category, but only used $199 of that, the other $101 would go toward paying off our solar panels, our current major financial goal.

In contrast to the regular budget categories above that we zero out each month, we also put money into the categories below. These are our sinking funds. Our sinking funds are categories where we set aside money for periodic expenses each month and let it roll over and build up until we need it.

The amount in bold is the amount we added to the fund this month, followed by spending notes and the current balance of each fund.

To answer a question we often get, we do not have separate bank accounts for these funds. We had separate accounts many years ago when we first started budgeting but we learned that was overkill. Instead, all of the money sits in our checking account. Since we spend according to our budget category balances, not our checking account balance, we’re not worried about getting the money mixed up. 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, a budgeting tool we absolutely adore. Yes. You can adore a budgeting tool. Don’t believe me? Try it out.

Medical/Dental – $0 added. We spent $59 in doctor visit and medicine. Current category balance is $2,122. It would be great to have some of this left at the end of the year so we can roll it into next year’s medical/dental! No accidents, injuries or illnesses, please!

Car Maintenance – $200  added.  We didn’t spend anything on car maintenance in September. Current category balance is $944.

Christmas – $100 added. We spent didn’t spend anything on Christmas 2023. Current category balance is $1,548.

Disability Insurance- $190 If Mike is unable to do his work as an attorney due to illness or injury, this disability insurance will replace about 2/3 of his current income. Since our income potential is our greatest financial asset right now, we want to have disability insurance to help us protect it. Each month we put money aside so the full amount is waiting when the premium is due each year. Current category balance is $1,167.

Life Insurance – $100 added. Next year’s life insurance premiums will be due in November. Current category balance is $1,000.

Birthdays & Gifts – $60 added. We spent $52 in September for birthdays.  Current category balance is $44. 

Car Registration & Smog – $40 added. We didn’t spend anything in September. Current category balance is $160.

Family Fun Fund – $0 added. We didn’t spend anything in September. Current category balance is $154.

Home Projects- $32 added. We drained this category last month when our dishwasher needed to be replaced. We grabbed a few things from Home Depot in September. The category balance is currently $0.

Garden & Orchard- $0 added. We have been successfully ignoring our garden this year. We didn’t spend anything in September. The category balance is currently $32.

Investing

Kids’ 529s – $150 added. Investing just $25 per child per month for college isn’t much, but we are okay with that. Neither of us had significant college savings when we went to college, but with scholarships, grants, loans, and jobs during school we were able to get our undergraduate degrees without debt. We may contribute more later, but right now we’re happy with small, consistent contributions.  I looked at the balances recently and was please to see that this small contribution that is barely noticeable has added up to over $15,000! If you want to know more you can read about how we decided to start 529s for our kids.

IRA (Steph) – $542 added. With this same amount each month, I will reach my $6,500 IRA contribution for 2023.  Mike has about $1,100 each month deducted directly from his paycheck into the state pension fund for his retirement.

Goal Progress

We are getting so close to finishing paying for our solar installation! We really hope (and expect) to finish paying it off next month.

If you are thinking about getting solar or are just curious, you can read about why we are getting solar, how much it cost us, and how we’re paying for it.

Our total cost for getting solar was $70,000. We will have paid about $3,000 of interest on the $50,000 loan we took out to cover the majority of the cost. We started making payments on the $50,000 loan in April 2022. Our payments are $1,502 per month.

Our contribution to our solar goal in September was going to be just enough to make our $1,502 payment, but this month Mike and I did financial spring cleaning “found” $1901. We consolidated and closed out accounts at several institutions that were sitting inactive. That included a rental property emergency fund from when we were renting out our Airbnb and some other accounts with a total of a few hundred dollars. So in total, we put $3,403 toward solar.

Our remaining balance for solar is $14,197 and we can’t wait to finish paying it off!

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.

Income Earned in September- $9,303

Above you can see everything we spent in September (that we had received in August.) At the same time we were spending what we earned in August, we were also earning September money, and at the beginning of October, we set up our first-cut budget to allocate spending from our September income. This concept of getting a month ahead, has made such a huge impact on our finances! It takes some work to get to the point where you are living on last month’s income, but the effort is completely worth it!

The income section below shows the money we earned in September, which we don’t touch until October.

Attorney Income – $9,303 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 – $0 For years we rented out a one-bedroom apartment on our property through Airbnb. We gave that up to take in a Ukrainian refugee family for a couple of years. We loved Airbnb and will likely go back to that in the future. 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- $0  Before working for the state, Mike did estate planning and business transactions. Over the last few years he has had a steady stream of potential clients, most of whom he refers to other attorneys, but he still occasionally helps former clients. He doesn’t cut himself a paycheck each month, just a couple of times a year.

Blog – $0  I only pay myself a couple times a year now now. My blogging income took a major hit when I put the blog on the back burner during Covid to start homeschooling my kids. Since then it really hasn’t recovered. The income still covers my fixed blogging expenses (which are a lot more than most people would guess).

Come back next month to see how we use this income to fund October’s budget.

How’s Your Budget Working for YOU!?

That was a lot of words and numbers! Congratulations for making it all the way through our September 2023 family budget update!

Now we would love to hear from you!

Any questions on what or why we spend what we do?

What are your current financial goals?

Do you find that your budget is helping you reach your goals, or is it not working like you wish it was?

Let’s chat in the comments!

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