Do you like living by a budget? Some people associate budgeting with being poor or feeling restricted, but that’s far from the way I see it. Living by a budget is for everyone, no matter your means. Budgeting allows you to be in control of your money (whatever amount that is) instead of having your money control you. A budget gives you the freedom to spend how you want because you are the one who decides on the budget.
The problem with not prioritizing your spending ahead of time (by making a budget) is that you are very likely to spend not according to your real priorities, but based on what is convenient, more enticing, or simply whatever spending opportunity comes up first.
Budgeting is especially exciting when you have a goal that you’re working toward, which hopefully is the case most of the time. When we were working hard to pay off six figures of student loan debt, we were very motivated to carefully allocate our money so that we could reach our goal.
Now, nearly nine years after paying off that debt, we are focusing saving to take some fun trips together. It’s easier to turn down enticing, convenient opportunities to spend money when we have an exciting goal to focus on.
Here’s what our spending and earning looked like in May 2025.
Spending in May
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. In May, we budget and spend what we earned in April. We knew on May 1st exactly how much money we had to work with during the month. So on May 1st, we start the May budget by taking everything we earned in April and assigning it to our May budget categories.
We can’t see the future, so on the first of May, these dollar assignments were 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. And a budget that changes during the month is good!
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 May 1st guesses dictate what we can and can’t do all during the month. The important thing is to not spend more total in May than we earned in April.
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 May spending for all of our budget categories.
Giving
Tithing – $1,351 We start out the month paying a 10% tithe on our income. Like all of our May spending, our tithing is calculated on what we earned in April. 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 – $3,000 Our actual mortgage bill each month is $2,525 but we round up any pay an even $3,000. This shaves two years off of our mortgage and saves us over $4,000 in interest. If you’re new here, 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 $149,585 remaining on our mortgage.
Here’s our mortgage payoff goal tracker house (you can get your own copy in my shop)!
Electricity – $6 Two 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 $6 unavoidable fee.
Car Insurance – $368 We have three vehicles with two adult drivers and one teen driver and one teen with a learner’s permit.
Internet – $124 We have cable internet through Comcast. When we bought our home eight 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 – $166 Our water bill comes every other month. I underestimated what half of the bill would be when I only set aside $75 the month before, so in May I had to pay the difference.
Garbage- $54 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.
Cell Phones – $175 We pay for eight cell phones: five for our family, and three for the Ukrainian family that we sponsor. Mike is trying out the annual plan, so we now only pay 7 phone bills per month. Our phones 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.
Gym – $60 For the first time in our lives, we joined a gym this year. Our teenagers were extra excited, since it’s a small local gym that many of their friends go to. We went early nearly every morningduring the school year, though we’ve been sturgglung to find a summer routine with everything else that is going on. We hope that investing in our fitness now will make life better now and for years into the future.
Everyday Expenses
Food – $735 We area family of 8 including 3 athletic teens. We primarily buy ingredients and cook at home, rather than eating out or buying convenience foods. 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 – $567 Our gas spending was pretty normal in May. Gas here is $4.39 per gallon at the cheapest station.
Household Misc – $363 In addition to normal toiletries and household things (and of course sunscreen), we had our normal subscriptions like Google Suite ($6), CrashPlan ($40), Adobe Lightroom ($20), Scribd/Everand ($12), and Sadie Active ($10). We stocked up on packing tape, batteries, and a new, more expensive kind of shampoo.
Clothing – $187 – We got some summer clothes and shoes.
Animals – $0 We were already stocked up on dog, cat, and chicken food, so we didn’t buy anything in May.
Allowances – $143 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.
Kids Activities – $505 Our second oldest now has his learning permit. Before he can get his license he needs 6 hours of behind-the-wheel drivers training with an instructor, which we paid for in May. Our two oldest went to a formal dance.
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 Mint or something similar to manage your finances, you’ll want to read about our switch to budgeting with YNAB.
Medical/Dental – $400 added. We spent $858 on dental work and monthly orthodontic payments in May. Current category balance is $829
Car Maintenance – $300 added. In May we spent $0 on car maintenance. Current category balance is $1,356.
Christmas – $200 added. I didn’t spend anything on Christmas 2025. Current category balance is $922.
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. We paid the balance in March and are now saving for next year. Current category balance is $532.
Life Insurance – $100 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 $622.
Birthdays & Gifts – $70 added. We spent $0 in May. Current category balance is $81.
Car Registration & Smog – $50 added. We didn’t spend anything here. Current category balance is $396.
Family Fun Fund – $0 added. We didn’t spend anything here in May. Current category balance is $172.
Home and Garden – $0 added. We didn’t spend anything in May. Current category balance is $8.
Big Trips – $1,350 added. We took a trip to celebrate our 20th anniversary (more on that coming up). I planned it in about 6 weeks. In May we spent $2,106, with just a couple more expenses that will be for our June budget. Current category balance is $62.
Swim Team 2026 – $100 added. I started a sinking fund to start saving up for swim team next year. It will be nicer to have the money all set aside when the early spring registration rolls around next year rather than having to come up with the ~$1,200 in a month or two. Current category balance is $200.
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 $21,000! If you want to know more you can read about how we decided to start 529s for our kids.
IRA (Steph) – $583 added. With this same amount each month, I will reach my $7,000 IRA contribution for 2025. Mike has about $1,300 each month deducted directly from his paycheck into the state pension fund and a 457 plan for his retirement.
Income Earned in May- $9,866
The categories above show everything we spent and saved in May, which was with the money we had earned in April. At the same time we were also (of course) earning money during May. At the beginning of June, we set up our budget to allocate spending from our May income. I’ll share that spending next month.
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 May, which we will use during June.
Attorney Income – $9,094 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.
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 this post where I talk about how much you can make on Airbnb.
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 – $0 I 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. It is slowly recovering 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 – $772 For the past two years I have been taking care of the 3-year-old of the Ukrainian family that we sponsor. The state 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 June’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 May 2025 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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