After a rough summer, I’m glad to be back to sharing our budget updates. I’m also proud of getting August’s budget update posted so promptly!;)
If you’re new here, I have been sharing our family’s transparent finances since 2013 when we were in six figures of student loan debt. I realized that most people have never looked at someone else’s real budget numbers before. If you’ve never been taught how to budget, you’re not alone. Most people were never explicitly taught how to manage their money.
There’s no one right way to budget, so don’t think you need to do it exactly the way that I do. Everyone’s numbers will look different, too. The purpose in sharing our budget process and numbers is just to give you ideas and share one example of a way that works. I hope you’ll be motivated to create (or improve) your own budgeting process and habits so that you can pay off debt and reach your financial goals!
Lots has changed since I first started transparently sharing our finances, but one thing that has stayed the same is our commitment to be intentional with our money by using a budget. I absolutely love budgeting! I love the freedom that a budget gives us to spend on things that matter to us. I love not feeling worried about money constantly.
In August’s family budget update, I’ll start by sharing everything we spent in August, including saving and investing, then I’ll talk about what we earned in August, which we will spend in September.
Spending in August
When we first understood the concept of living on last month’s income, it rocked our financial world in the best kind of way. If you have no idea what that means, here’s a video walk-through. Or you can read up on how you can get started.
At the beginning of each month, we start budgeting by first adding up the income we earned the month before. We knew on August 1st exactly how much money we had earned and received between July 1 and July 31, so we knew exactly how much we could spend between August 1 and August 31. On August 1st, we start the August budget by taking everything we earned in July and assigning it to our August budget categories.
We can’t see the future, so on the first of August, these dollar assignments are really just our best guesses and goals. We’ve been doing this for years and can make some pretty good guesses, but every month is different. Our dollar assignments at the beginning of the month almost never stay exactly the same because our needs and priorities usually change during a month.
It’s normal for our spending plan to change as we move through the month. The important thing isn’t spending exactly how much we guessed we might spend in each budget area at the beginning of the month. It would be silly to let our August 1st guesses dictate what we can and can’t do all during the month. The important thing is to not spend more total in August than we earned in July.
If we need to spend more in one budget category than we had originally assigned, that money has to come from some other budget category. We revise the budget categories to meet our priorities during the month, but we can’t just add more money to all of them, because the total amount stays the same all month long. A changed budget is not a failed budget. A budget needs to be flexible in order to be successful!
Here’s our family’s final August spending for all of our budget categories.
Giving
Tithing – $1,628 We start out the month paying a 10% tithe on our income. Like all of our August spending, our tithing is calculated on what we earned in July. 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.
Monthly Bills
Mortgage – $2,999 Our mortgage is $3,499 each month now. At the beginning of the year, the escrow portion of our payment increased by over a thousand dollars to accommodate a massive increase to our annual home owners insurance. Our Ukrainian neighbors contribute $500 per month. 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 (details of that here.) We currently have $124,990 remaining on our mortgage.
Here’s our mortgage payoff goal tracker house which I need to update (you can get your own copy in my shop)!
Electricity – $6 Three years ago we installed solar panels on our property, a $70,000 investment that we finished paying for last year. Our electric bill is just the unavoidable fee (which has gone up) for most of the year, then in December we have our “true-up” which is the difference between what we’ve used and what we’ve produced over the year. I’m working on writing up a detailed analysis of whether solar was worth it for us. I was hoping to have it published by now, but I passed it onto Mike who is both busy and devoted to details.
Car Insurance – $454 We have four vehicles with two adult drivers and two teen drivers.
Internet – $124 We have cable internet through Comcast. When we bought our home nine years ago, we invested $5,000 to have Comcast extend cable internet to our property. It has been worth it every single day since then, even though the cost for internet service went up recently.
Water – $300 Our water bill comes every other month. We try to set aside about half of what we expect the next bill to be. Our last bill was a shocking nearly $900. We’re hoping the next one isn’t like that.
Garbage- $61 Like the water bill, our trash pick-up bill comes every other month, so each month we set aside the money for half of the bill. The cost seems to go up several times a year.
Cell Phones – $125 Our phones are all through Visible. Visible is a Verizon subsidiary that offers no-contract plans with wifi calling, unlimited cell calls, and unlimited calls and 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.
Gym – $60 For the first time in our lives, we joined a gym last year. Our teenagers were extra excited, since it’s a small local gym that many of their friends go to. We hope that investing in our fitness now will make life better now and for years into the future.
Everyday Expenses
Food – $927 We are a family of 8 including 3 athletic teens. We primarily buy ingredients and cook at home, rather than eating out or buying convenience food. We did eat out on our trip to take our daughter to college in Utah. Eating out goes in this category since we don’t have an “eating out” category in our budget.
Want to see what our average grocery spending was last year (and how it has changed over the past several years) check out this recent post. If you need help getting your grocery spending under control, you can learn all about my strategies and method in my Grocery Budget Hero online course. Right now it’s available with pay-what-you-can pricing!
Fuel – $1,445 Gas prices in here in August were $5.39 at the station we frequent, but we spent the first week and part of the last week traveling, so gas was way more than normal.
Household Misc – $480 This includes our normal toiletries, household things, and subscriptions, including our annual Google One storage. We have needed new camp chairs for a very long time and finally bought a couple in August. I saw a friend with these chairs and loved how small they fold up and how sturdy they were. I bought these bins for our oldest to store her stuff (that she’s not taking to college) in. This squeegee is a necessity for washing the big van at home.
Clothing – $503 – We did not go “school shopping” but we did get some essentials. Actually more for mom and dad than the younger kids. I got these shoes for my oldest, but I found them (like new) on Depop for half the price. I also got these for my high school freshman (yes, my kids have giant feet).
Animals – $30 We bought cat food in August.
Allowances – $157 We give our six 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.
College – $185 I went into detail on what we bought to send out daughter off to college in this post.
Sinking Funds
For our regular budget categories above, 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 $800 in our food budget category, but only used $720 of that, the other $80 would go toward our current major financial goal. Focusing all these extra funds from each category into one goal helped us pay off our law school debt years earlier than we thought possible.
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. I recently wrote a whole article about how to get started using sinking funds (and why you should).
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. If you have been using EveryDollar or something similar to manage your finances, you’ll want to read about our switch to budgeting with YNAB.
Medical/Dental – $800 added. This is more than we normally add, but we did not add to this category in July. We spent $114 in this category in August. Current category balance is $1,832.
Car Maintenance – $500 added. We also added more than normal in this category since we skipped it in July. We spent $0 in April. Current category balance is $2,253.
Christmas – $400 added. We doubled our normal monthly contribution since last month it was zero. We haven’t spent anything from our Christmas 2026 budget yet. Current category balance is $1,400.
Disability Insurance- $190 added We set aside money each month for disability insurance so that when the annual premium is due we have the money ready. If Mike is unable to do his work as an attorney due to illness or injury, this disability insurance will replace about 60% of his current income. Since our income potential is our greatest financial asset right now, we have disability insurance to help us protect it. The annual payment was $2,000 in March, so now we’re saving for our March 2027 payment. Current category balance is $1,382.
Life Insurance – $125 added. Our life insurance premiums are due each November, so we set aside a portion of the estimated total each month which will go toward next year’s premium. Current category balance is $1,125.
Birthdays & Gifts – $75 added. We spent $285 spent in August. Current category balance is $128.
Car Registration & Smog – $50 added. We spent $0 in August. Current category balance is $384.
Family Fun Fund – $0 added. We spent $90 in August, mostly for campsites for our Wyoming trip. Current category balance is $364.
Home Improvement – $100 added. We started an emergency bathroom project at the end of November that involved completely gutting our kids’/guest bathroom. We haven’t made it very far yet, but it will be a DIY project that we hadn’t planned on or budgeted for. With our Cuba trip, then everything this summer, we have not made it very far. Current category balance is $600.
Swim Team 2026 – $250 added. Last year I started a sinking fund to start saving up for summer swim team. It was nice to have the money ($1,300 for 4 swimmers) saved up when registration was due. We are back to saving up for next year. Current category balance is $500.
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 much 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 pleased to see that this small contribution that is barely noticeable in our monthly budget has added up and grown to over $28,500! If you want to know more you can read about how we decided to start 529s for our kids.
IRA (Steph) – $625 added. With this same amount each month, I will reach my $7,500 IRA contribution for 2026.
Investment property – $1,749 A year ago, we bought an investment property. Right now we are putting money into it, including paying the mortgage until it gets to the point where it covers its own expenses. The amount listed here is the money that came out of our family budget to go toward the new property. Our monthly costs on the property includes the mortgage payment of $2,339 and the cost of trash service and internet. We get $700 from our RV renter that goes toward this and we cover the rest from other funds until we get a permanent rental home on the property.
Income Earned in August- $11,371
The categories above show everything we spent and saved in August, which was using the money we had earned in July. At the same time we were also earning money during August. At the beginning of September, we set up our budget to allocate spending from this August income. I’ll share that spending once September is over.
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 August, and will used in September.
Attorney Income – $9,903 Mike works as an attorney for the state of California. This was his take-home pay after taxes, social security, his pension contribution, and health insurance premiums.
Law Firm- $0 Before working for the state, Mike did estate planning and business transactional work. 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 write himself a paycheck each month, just a couple of times a year.
Blog – $1,288 I also only pay myself a few times a year now. My blogging income took a major hit when I put the blog on the back burner during Covid to start homeschooling my kids. Hopefully it will recover as I put more effort into posting regularly and all of the things I do behind the scenes. Thankfully the income still covers my fixed blogging expenses (which are a lot more than most people would guess) and allows me to pay myself a few times a year.
Child Care – $180 For the past three years I have been taking care of the 4-year-old of the Ukrainian family that we sponsor. There is a community organization that pays for childcare while the mom is at work. It’s much less expensive and more convenient to have her stay with me than to bring her to a standalone child care facility.
Come back next month to see how we used this income to spend and save in September’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 August 2026 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?
What would you like to see in our future budget updates?
Let’s chat in the comments!
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