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We really buckled down on our spending to beef up our emergency fund this past month.
It wasn’t hard, since the entire state is under a “stay at home order” because of the coronavirus outbreak.
Luckily, we’re in a rural area and have (so far) only seen 17 cases in the entire county.
Andrew and I are still working from home. And Nora’s school has put together an eLearning program that’s keeping her pretty busy.
We had a major shift in our financial priorities over the last month. The pandemic made me realize how ridiculous it is to think a $1,000 emergency fund is enough.
Dave Ramsey is good at a lot of things, but he got this one very wrong.
And started hoarding cash.
Despite our best efforts, we went over-budget in quite a few categories.
Are you ready to see how we did this month with our money?
Let’s dive in.
What this report is about
The key to making your debt-free journey a success is accountability.
And that’s what this spending report is for me: A way to keep myself accountable.
I’ll also share some of our money-philosophies and some tips and tricks we’ve learned along the way to help you get your finances in tip-top shape.
You’ll learn why we only spend with debit cards, how we track our expenses, and how to read our spending report. I also want to give you an update on our financial goals.
Finally, after all of that, you’ll see our spending report.
That’s where share the nitty-gritty of our budget. You get an inside look at the categories of our expenses, the amount, and notes about where that money went.
Why we don’t use credit cards
1. It’s easier to stick to our budget. The money immediately gets taken from our checking account. We don’t have to wonder how much money we have and if we’re going over budget because our money goes in and out from one single place.
2. We don’t accumulate more debt. Andrew and I have tried to budget with credit cards. It always gets us in trouble. We haven’t re-programed our brains yet to understand that a credit card is the same as spending “real” money. We’ve tried the “use a credit card to earn rewards” game and always end up with more debt.
3. Sometimes we use credit cards. There are a few situations where we use credit cards. If we’re booking travel (which we won’t be doing for a while – thanks, coronavirus), or making a one time big purchase that we know we can pay off at the end of the month, we use our Chase Sapphire Preferred card to earn rewards. (We love our Chase card – find out how you can earn $750 in free travel rewards.)
How we keep track of our budget
I can’t tell you how many personal finance apps and programs we’ve tried over the years. EveryDollar, Mint, YNAB, Zeta (for couples), Quicken, Personal Capital… the list goes on.
And you know what works best?
A plain old boring spreadsheet.
I track our net worth, debt payoff progress, sinking funds, goals, checkbook register, and our monthly budget on one simple Google sheet.
Automated is nice (and easier!). But the hands-on approach forces me to watch where our money is going.
We’re less likely to overspend when I track every expense manually.
Here’s what our looks like before I dump all of our data in.
Our budget tracker is on the left.
Before the first of the month, I assign a spending limit for each budget category. We use the zero-based budget and give every dollar a job before the month begins.
Note: I have Auto Gas, Groceries, and Out to Eat highlighted in yellow so I know to keep a close eye on them. These are the three categories where we constantly overspend.
The middle section is our checkbook register. I add our starting balance at the top and add transactions throughout the month. When a transaction clears the bank, I check the box.
On the far right is where I track a birds-eye-view of our budget.
It tells me if we’ve budgeted every dollar before the month begins and tells me how we’re doing with our spending overall.
A note about “missing” expenses
As you look through our spending report, you’ll notice a few things missing.
Like car insurance, trash and recycling, a water bill, and sewer bill.
We live in a rural area that doesn’t have city water or sewer. Our water comes from a well in the ground near our home. And we have a septic system instead of city sewer, so we don’t have bills for those.
We also pay in full whenever we can.
Take our car insurance, for instance. We get an enormous 11% discount if we pay for the full 6 months in full rather than making monthly payments.
Every month, I take a little money and transfer it to a high-yield savings account (we use CIT Bank because it pays the highest interest that we’ve found).
Then, every six months, I pay our car insurance bill from that savings account.
(If we left it in our checking or even in a savings account at our credit union, I’m sure we’d spend it.)
We pay our trash and recycling bill annually, so you won’t see that, either.
I also don’t share our charitable giving. We’re big believers in sharing our financial blessings with our church and charities that we’re passionate about. But I prefer to keep how much we give to ourselves.
How we did on last month’s financial goals
In March, we changed our financial priorities big time.
The economy took a nose-dive and hoards of people lost their jobs.
Andrew and I are fortunate enough to still be working throughout all of this. But it made me realize how quickly things could change.
Since we were huge Dave Ramsey fans, we were proud of our $1,000 baby emergency fund.
But what if Andrew lost his job because of the pandemic?
What if my clients cut their marketing budgets, leaving me with no income?
It’s scary to think about. So we stopped paying extra on our debt (bye-bye, debt snowball!) and started stashing cash in our savings instead.
Here’s what our March goals were, and the progress we made:
- Contribute 5% of our income to retirement: Done.
- Add $500 to our emergency fund: We blew this goal right out of the water. We got a small amount of cash back from refinancing our house and I had a few payments on late invoices come in, and we put $4596 in our emergency fund.
- Cut every unnecessary source of spending possible: We did okay with this, except we bought a deep freezer to stock up on extra groceries and a chainsaw to cut up a fallen tree in our yard.
April’s financial goals
Since not much has changed with the economy, we’re going to continue to hoard cash as much as we can.
Here’s what we’re shooting for in April:
- Contribute 5% of income to retirement
- Add $1,000 to our emergency fund
- Spend less than $700 on groceries
Our April 2020 Spending Report
|Savings/Sinking Funds||546||For car insurance and our Christmas fund.|
|Emergency fund||4596||This was a huge blessing to add this to our emergency fund in a time like this.|
|Mortgage||935||With the interest rates dropping, we started to refinance but it hasn't gone through yet.|
|Utilities||610||Our annual trash bill was due this month, which makes this higher than usual.|
|Auto expenses||74||We saved a ton of money in gas with Andrew working from home all month!|
|Entertainment||59||Most of this was digital rentals to keep ourselves entertained.|
|Groceries||989||For the 2nd month in a row, I'm embarrassed by this number. We've been spending more eating at home and stocking up on hard-to-find items.|
|Out to Eat||132||Supporting local businesses with everything being shut down!|
|Home Repairs/Service||487||A tree fell in our yard this month and we bought a chainsaw to clean it up ourselves. We also invested in a deep freezer.|
|Medical Bills & Prescriptions||521|
|Allowance and Activities for Nora||33||With everything closed, there wasn't much she could do.|
|Pet Expenses||114||With the pandemic, we stocked up on cat food and litter (mostly because our cat needs specialty food that you can't buy at Walmart).|
|Credit card payments||301||Significantly less than last month since we're focused on saving money instead of paying debt right now.|
|Student loans||51||My student loan is suspended by the CARES Act, but Andrew's didn't qualify.|