Disclosing our family's budget numbers last week seems to have been very useful to a lot of folks, which I am thrilled about. I am very passionate about eliminating the stigma of talking about money (a post for another day). For this reason, I was pleased and honored that a dear friend of mine, Johanna Tatlow, offered to write a guest post describing her family's current budget, which differs from ours in many ways, not least of which because of COVID-impacted incomes and debt repayment. Please enjoy this well-written piece, and feel free to reach out if you would like to share your own budget as well!
Thank you, Johanna!
A Covid-Adapted Budget
Our family hasn’t had a “normal” budget in quite some time. I finished grad school in 2017, and we had a few months of two full time incomes. Then we moved. I started freelance work and had a baby. Honestly, I let our finances slide way out of hand during grad school and the early months of motherhood. Then I got serious about things late last year. I had just landed a permanent job when Covid-19 started soaring.
First I was furloughed. Then my position was eliminated. I could go back to job searching, but I don’t have childcare right now. Also, my graduate studies involved one semester of public health and a lot of economics. Those combine to tell me that the job market will suck until March 2021 at least. So instead of looking for a salaried position, I am working from home as a freelance writer. My husband works afternoon and evenings right now, so I usually get a some dedicated time for work in the mornings and (less often than I like) during my toddlers’ afternoon nap.
The spreadsheet for our budget is below. Read it with the following in mind—
Family Size: We are two adults, one toddler boy, and one aging dog.
Variable Income: Over the last few months our income has fluctuated greatly. We received the COVID-19 relief checks. Then there was a bonus from my husband’s work. He briefly got hazard pay, and then that stopped. Then my severance pay came through. I try to budget without counting on any of the extras. I base the budget off my husband’s base salary and my low target freelance income. Doing that allowed us to pay off one of our credit lines last month. Hurrah!
Food budget: I have Gluten-Triggered IBS, so I have to eat a certain way. That ends up being expensive. But eating well also has kept me out of the hospital. We compensate somewhat for the cost of gluten free foods by eating relatively little meat.
No kid’s clothes: A friend of mine passes all her son’s clothing down to me, so I rarely have to buy anything for my toddler besides shoes. This saves us quite a bit.
Medical and doctors: We have a high deductible health insurance and an HSA account. Since those come out of my husbands’ paycheck before I see the money, I am going to leave those off of here. But you should probably know that $200+ a month from that goes to paying off a hospital bill for my son from January. We also do pay for some medications and prescriptions out of pocket.
Childcare considerations: Right now, I am not paying for childcare. Sometime in August, my husband’s shift will switch to a morning and afternoon rotation, and I will likely need to pay for a mommy’s helper or nanny-share to look after my kid while I work from home. Hopefully my writing business will have scaled up by then so that it’s possible. Otherwise I will be writing in the evenings, which is not my favorite.
Travel: My parents live in California. My husband’s parents live overseas. I used to use travel rewards credit cards to earn tickets to see my California family. But we started using the credit cards for other things and our spending got out of hand. This month we will drive up to see my sister in DC and stay at her place. After that we will need to start setting money aside for future trips again.
Debt: We are digging our way out of a lot of credit card debt. Right now we have around $7,000 on a travel points card, and a further $10,000 from previous credit card debt that has been consolidated to a personal loan for a lower interest rate. We also have student loans. We have put the student loans on income based repayment for now so that we can pay off the higher rate credit card debt first. Thanks to the CARES Act, the student loans aren’t accruing interest right now.
Savings: Since we have one month’s expenses in savings, we are putting all our extra toward paying off debt. Once the credit card debt is paid down, we will shift those payments over to saving for a house.