Also, last week I published a post explaining the details of how we are working the finances for the Ukrainian family that we’re sponsoring.
For those who are new here, we are a family of 8 in Northern California who recently took in a refugee family of 4. We share our real family budget in an effort to break the taboo about family finances. If you are like most Americans, the only family budget you’ve ever seen is your own and you probably learned how to budget from your own trial and error, not from any direct instruction. Our budget will look completely different from yours since our financial details and individual priorities are different, but hopefully you can look past the numbers and see the principles behind them. My hope is that being open about our finances will help other families to see ways that budgeting can work for them.
Okay let’s take a look at our numbers for July 2023. We had lots of extra income in June which was helpful for July’s budget. July also had some extra income, which we are putting to good use in August. 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 JULY – $12,444
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 July, which has all been set aside to use in our August budget. The spending section below shows the money we earned in June and spent in July.
Attorney Income – $9,026 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- $3,418 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 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 blogging expenses (which are a lot more than most people would guess). I only pay myself a couple times a year now.
Spending in July
Each month we allocate every dollar earned in the PREVIOUS month into our budget categories for the current Month. For July, we budget and spend the money we received in June.
Tithing – $1,802 We always pay a 10% tithe on our income. Like all of our July spending, this comes from the money we earned in June. 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.
Mortgage – $2,823 You may notice that this is up about $450. This was because of an increase in home owner’s insurance. We have a 15-year mortgage on our house. With mortgage interest higher now, and potentially still climbing, 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 – $6 We are finally reaping the benefits of our huge investment into solar. We are producing enough solar energy to cover all of our current usage, plus some credit to go toward winter months. The small bill is just for random service fees that can’t be avoided. I should also note that we are still very conservative with our electric usage (we very rarely use our air conditioning) while we wait to see how the year’s solar true up goes.
Car Insurance – $189 Our car insurance went up now that we have a third vehicle (see this post if you don’t know what vehicle I’m talking about) and we drive much more. 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 – $130 You may notice that this cost is up from the normal $70 per month. Apparently our plan had a cap of 1.2TB limit. We had never even come close to using that much even when renting out our guest house, so the limit never really mattered to us. With our Ukrainian guests, we have been going over, so Comcast bumped us up to the unlimited plan which is an additional $30 per month. In August we had to pay the extra $30 for the previous month as well.
Water – $344 Our water bill comes every other month. Our bill was higher than we expected so we had to contribute a big chunk in July to pay the bill. I really don’t like not being able to track our water use. Getting to the meter is a 4 mile drive or a very long, steep hike. With the bill only coming every other month, it is hard to pinpoint the problem.
Garbage- $50 It seems like this bill creeps up a few dollars about twice a year.
Cell Phones – $228 We now pay for seven cell phones: for me, Mike, our oldest child, one used as a home phone, and three for our Ukrainian friends. 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 several years now and have no complaints at all. It is $25 per phone with unlimited data per month, but right now you can get the first month for just $5 through my link. We also have a Gabb watch and have a Bark subscription.
Music Lessons – $0 We have paused music lessons because our daughter is extremely busy right now. Our music teacher has generously offered his time and talent to teach our 11-year-old Ukrainian girl. What a blessing!
Food – $698 Being so busy with transportation and logistics for the past three months, I have not been very intentional about planning meals or grocery shopping. I haven’t been doing a big monthly grocery haul like normal. I cook several big meals a week and we eat lots of leftovers. I’m thankful that our “survival mode” doesn’t include take-out or anything too outrageous.
Food prices are definitely higher than they were a few years ago, but I still believe almost everyone can spend significantly 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 – $837 Our gas spending went down from $1,000, probably because many of the summer activities (like swim team) ending in mid-July. The older kids and I went to a church camp for a week, and the next week our family (and Ukrainians) went camping. (Spoiler: August gas will be much more!)
Household Misc – $434 This is a fraction of what we spent in this category last month, but it’s still amazing how all of the “little things” add up. We had normal, household things along with a couple of subscriptions.
Clothing – $130 – We didn’t do back-to-school clothes shopping for the most part, but we did need to buy a few things for some of the older kids.
Animals – $50 We bought dog food and chicken feed.
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 – $60 We paid for wrestling in July.
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.
We have skipped some of our sinking funds in the past several months since the budget has been tighter due to extra expenses related to our newcomers. Since June’s income was higher, we were able to put some extra toward our sinking funds.
Medical/Dental – $300 added. We spent $106 in July on an x-ray. I’m convinced that there is another bill coming as soon as the insurance company realizes that we haven’t met our deductible. Current category balance is $2,584.
Car Maintenance – $1,200 added. We spent $1,840 in July getting the radiator fixed on one of our vehicles. Current category balance is $344.
Christmas – $400 added. We didn’t spend anything for Christmas 2023. Current category balance is $1,335.
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. We put money aside each month to pay the premium when it’s due each year. Current category balance is $787.
Life Insurance – $100 added. Next year’s life insurance premiums will be due in November. Current category balance is $800.
Birthdays & Gifts – $50 added. We spent $113 in July for birthdays for two of the kids in the Ukrainian family. Current category balance is $59.
Car Registration & Smog – $80 added. We didn’t spend anything in July. Current category balance is $80.
Family Fun Fund – $350 added. We spend $673 in July. We didn’t plan any major family trips this summer because we weren’t sure how things would go with welcoming our refugees. We decided we needed to do something fun before school started, so took a camping trip at the end of July. Camping itself didn’t cost anything, but we bought two fun additions to our family. This stand-up paddleboard and this kayak were used from dawn until after dusk each day that we were camping. They will be fun for years to come! Current category balance is $24.
Home Projects- $100 added. We didn’t spend any in this category in July. The category balance is currently $311.
Garden & Orchard- $200 added. In July we spent $68 on a hose timer. The category balance is currently $132.
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) – $542 With $542 monthly, I’ll max out my $6,500 IRA contribution for the year. Mike has about $1,200 each month deducted directly from his paycheck for retirement.
We are just paying normal mortgage payments for a few more months while we finish up an interim goal–paying off our solar installation. 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 are so excited to finally have solar all set up and running (it took over a year, which is ridiculous!!)! We are hooked up to the grid, so 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.
The total cost of getting solar was $70,000 (plus about $3,000 of interest on the $50K loan if we pay it off in 2 years). 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 July was $5,007.
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 a separate budget category.
That brings the total we’ve paid towards solar so far to $51,540.
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.
How About You?
- How did your budget and/or debt repayment go in July?
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