This month, Kyle and I finally FINALLY had the money management conversation(s) we had been putting off for so long. As a result, we are making some updates to our finances:

1) We are going to live off of Kyle’s income alone for our monthly spending, short-term goals, and long-term goals (retirement). We are going to use my income to fund our mid-term goals. This means that we are, for the first time in our marriage, not applying our percentage-based budgeting system to part of our income (we are suspending saving for retirement from my income). Kyle’s income is the bulk of our household income so this is really more of a mindset shift than a difference in the dollar amounts.

2) We identified two mid-term goals: 1) save a down payment for a house and 2) fund a 529 for DPR. The discretionary portion of my income (49.7%, after tithing and taxes) will go 80% toward the down payment and 20% to the 529.

3) We are going to open a 529 for DPR, but we’re trying to decide between two states so it’s not implemented yet. We have the money we plan to contribute to the 529 sitting in a separate savings account for the time being.

4) We hire babysitters occasionally so I can speak; since that is a direct ‘cost of doing business,’ that expense will bypass our budget and be paid directly from my income (instead of the discretionary portion of my income going toward saving).

5) Kyle said I can do whatever I like with the monthly/yearly budgeting regarding having targeted savings accounts or not – to him, it’s all cash and fungible, whereas I am motivated by dividing up the money and setting little goals. I decided I’ll re-institute some targeted savings accounts for our irregular expenses in 2017 – after we get through the massive money hemorrhage that is the holiday season!

We signed up for our first airline credit card – our first credit card with a non-waived annual fee! We’ve been flying Alaska quite a lot since moving to Seattle so we decided to get their card for the yearly companion pass and ongoing rewards. I think we’ll make good use of it as long as we’re living here. We signed up for one card and paid the $75 annual fee.

DPR in her DIY witch costume

I don’t know what came over me, but this month I decided to make DPR’s first Halloween costume. I am not a craft-y person and I don’t know how to sew, so I decided to make something that looked cute but was very easy. In comparison with buying a costume in a store or getting a hand-me-down from craigslist/Buy Nothing, this approach was way more expensive and way more time-consuming. Actually, the worst aspect was my crazy idea to buy the supplies in a store (Jo Ann’s Fabrics) instead of ordering it online. It would have been so much faster to shop online than truck DPR all over the city looking for the supplies I needed, and I figured out in retrospect I would have spent less money, too. In all, I spent just over $40 and probably 8 hours on the costume. I liked the result (mostly), but I don’t think I’ll do it this way again! We attended three Halloween events this month, so we got some good mileage out of the costume.

Sources of Income

Our budget is based on Kyle’s net income (after taxes and insurance).

Percentage-Based Budgeting

From Kyle’s net pay, we set aside/transfer:

• 18% toward retirement
• 10% for our tithe

Monthly Budget

We did surprisingly well keeping our variable expenses in check this month.

Regular Expenses

Rent $1495 ($1495 budgeted)

Water/Sewer/Garbage $130 ($130 budgeted)

Phones $61.58 ($65 budgeted): Republic Wireless for me and Cricket Wireless for Kyle!

Internet $69.95 ($70 budgeted)

Netflix $10.74 ($11 budgeted)

Student Loan $99.67 ($100 budgeted)

Cloud Backup $5.99 ($6 budgeted)

Variable Expenses

Transit $29.41 ($50 budgeted): One gas fill-up. For the first time since DPR was born, we didn’t pay for parking at all this month!

Power $0 ($50 budgeted): An off month for our power bill.

Groceries $717.34 ($600 budgeted): Major overage here! I don’t even know why, except perhaps taking too many trips to the grocery store. I’m still meal planning most of the time, which increases our spending but helps us eat more healthfully.

Restaurants $45.58 ($100 budgeted): Kyle bought a cupcake when we went to the farmer’s market one day. The rest of the money was what I spent on two meals out! Those were the second and third meals I’ve eaten in restaurants since DPR was born – and the first without Kyle – so they were big occasions for me. One meal was with another new mother, babies in tow, and the other was for a “mom’s night out” with my mother’s group. It was surprisingly very fun to be away from DPR for those few hours.

Irregular Expenses

In total, we are allocating $800 per month (on average) to spend across five six seven categories.

In this period, we spent:

Cars $0

Travel $75: This is the fee for our Alaska Airlines credit card.

Gifts $0

Appearance -$236.54: I spent $105.17 on two new clothing items, but returned a bunch of stuff I bought in previous months. This is an ongoing project to dress like a normal human being again.

Electronics $0

Baby $41.57: A body suit and supplies for DPR’s Halloween costume.

Health $0

Miscellaneous

Our total available miscellaneous money for this period was our normal $41.57, of which we spent $0!

Bottom Line(s)

Monthly: Spent $2665.21 of $2,677.00 budgeted – under!

Irregular: Spent -$119.97 of $800 budgeted – under under under!

Miscellaneous: Spent $0 of $49.46 budgeted – over!

This period, we spent $2,605.23 of $3,526.46 available. It’s great that we came in negative (!) on our irregular expenses spending, because we are going to have massive irregular expenses spending in November and December – Thanksgiving and Christmas travel and Christmas gifts!

Have you ever decided to reduce your retirement contribution (percentage or amount)? How have your holiday plans affected your budget?