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If you already know how I do my Financial Progress Reports and are only interested in seeing how we fared this month, scroll down to the gray summary boxes.
I think you’ll agree that a major part of successfully attaining your goals is tracking your progress. How many times have you thought you were sticking with your budget only to realize at the end of the month you weren’t very diligent at all?
If you’re like me, this happens much too often. So how do we fix this problem?
I need a more significant motivator than trying to make my spending align with my budget alone. I need a financial progress report.
A monthly report forces me to look into and reflect on my spending for the month, see where I went wrong, and make a plan to fix it. Rather than merely noting I fell short and moving on, I have to take time going through my expenses, kind of like a deliberate “think about what you’ve done” moment.
At the end of every month, I run a budget report in Quicken, the personal finance software I use at home.
I look at all our income, our spending in each budget category, how we’re doing on savings, and how much debt we paid off.
I do a full cash flow analysis.
Are we in the black? In the red? Do we need to pull money from savings to cover expenses or have extra funds to stash away somewhere?
Every month I am going to do a Financial Progress Report post, which will be a version of the cash flow analysis my husband & I do every month. Part of showing you how I do things is to give you ideas you may need for your budget.
It’s also for me to hold myself accountable every month.
I’m going to share how much we earned and spent as a percentage rather than using any exact numbers.
This percentage will be the percent of our net income that we take home after taxes. I feel like that gives a better representation of how we spend the money that reaches our pockets.
Income: 20.5% decrease from last month
My husband and I both work traditional jobs. His pay is hourly, so his income doesn’t change very much. We can reliably predict what he’ll earn. However, I’m paid based on commission. So my income is very variable from month to month.
This Month’s Summary: It surely has been a crazy month for so many people. I hope you’re all staying inside and safe.
Coronavirus started profoundly affecting where I live in mid-March. Restaurants closed, except for take-out. People were bulk-buying all the food they could from the grocery store, and there was no toilet paper anywhere.
Although staying at home as much as possible did help us spend less, business closures started impacting our income.
My husband and I are both essential workers; however, due to the nature of our jobs, we both experienced reduced hours beginning March 15. His restaurant, understandably, can only do take-out, which means they don’t need much staff there at a time.
As for my job, the state Department of Health issued a directive that only allows dentists to perform essential procedures – meaning we can only do work to relieve a patient’s pain and nothing else.
We both understand the need for such precautions and agree with them, but it still means our income decreases significantly throughout this pandemic.
Thankfully, since we worked full-time at the beginning of the month and weren’t completely laid-off, we were able to make our income goals this month barely.
On March 31, I found out I’d be furloughed for the entire month of April with no pay. So when I got home, we sat down and re-worked our plan for getting through this.
If you’re experiencing something similar and aren’t sure what to do next, check out my post on Financial Moves to Make During COVID-19.
Fixed Expenses: 23.6%
Our fixed expenses are the bills we get each month that don’t change in cost and are completely necessary.
There are other insurances we pay for annually, but those are discussed under Savings Goals since we save for them each month.
- Valuable Personal Property
Medishare (“health insurance”)
- Electric & Gas
This Month’s Summary: Our fixed expenses didn’t change this month. No surprise there. However, we’ll have some changes coming up soon with rent and internet bills.
USAA Auto Insurance
Our vehicles are older, a 2006 and 2009 model Hondas, but they still run, and we have relatively few problems with them. Since they don’t have issues breaking down, we have kept full coverage auto insurance on them both with USAA. The collision and comprehensive aspect of our policy are typical of what most people would get when they seek auto insurance.
However, our liability and injury coverage are higher than most. Due to my profession, I’m at a higher risk of litigation. To help compensate for that, we increased our auto liability and injury coverage to $300,000/500,000.
I highly suggest doing this if you are also at a higher risk for litigation. It increases our monthly payment, but it’s worth the protection and peace of mind.
Guardian Disability Insurance For Professionals
My disability insurance policy is a specialized plan designed specifically for my profession that I get through Guardian Life Insurance Company of America. It’s made to pay out if I am disabled and can’t work in my chosen field. Even if I can hold another job, it still pays.
This special allowance makes the insurance more costly. It’s also common for people in my line of work to develop back problems, which can result in being unable to work in the profession earlier than expected.
Due to the specifications of my policy and high rate of professionals that file a claim, my disability insurance is more costly than most.
USAA Renter's Insurance
Our renter’s insurance doesn’t cost us much each month because we opted for a policy with less coverage. It covers $12,000 in personal property damages, enough to get us started again with the basics if something were to happen to our apartment.
We treat this policy, not as a means to replace every single item we own if something were to happen, but a way to help us restart in the event of a tragedy.
USAA Valuable Personal Property Insurance
VPP is another extremely affordable policy for us. We took out the insurance to insure my engagement and wedding rings. If you can find a cheap policy, I think it’s a good idea to insure your ring. However, you could also have the cost of replacing your ring saved up in your emergency savings instead.
Medishare ("health insurance")
When I switched jobs, I knew I would no longer have health insurance. I started looking at the healthcare marketplace to get an idea of what we’d have to pay monthly for a new policy. The cheapest plan available to cover my husband and I was a $14,000 deductible policy for $1,000 per month. There was no possible way we could afford to pay that much.
I heard of Medishare healthcare sharing and thought the idea sounded interesting. Medishare is a healthcare sharing ministry that has been in operation since 1993, where members share each other’s medical expenses. Each month they use your “monthly premium” to pay someone else’s medical bills.
It is not traditional medical insurance, and they use different terms to describe your premium, deductible, and max-out-of-pocket amount. Because it’s not traditional insurance and a smaller group of people participate, they are particular about the medical expenses they cover. You will have to pay for most things yourself until you reach your “max-out-of-pocket.”
I plan to write a post reviewing my personal experience with Medishare at a later date so you can get a better idea of how it works.
After researching it, I found it was the perfect fit for us. My husband and I are young and, thankfully, very healthy. We don’t have a lot of medical costs. Medishare is excellent for that type of person.
It allows us a much lower monthly payment than traditional health insurance.
We live in a two-bedroom, 1100 square foot apartment in a safe and convenient area of town. Our rent is mid-range for the city where we live. Our pet also limits our apartment options. We have a cat and refuse to have her declawed. It turns out there aren’t many apartments that will allow that.
We could probably find a cheaper place, but the price was right for us here. Pool, gym, pets allowed, and very close to both of our workplaces.
Our necessary utilities are electric, gas, internet, and phone. You could argue that the internet services and a cell phone are not required fixed expenses, and technically you would be right. You have to admit, though, it would be challenging to operate in this day and age without the two.
Our necessities are our costs of living that can’t be cut out of the budget unless under extreme circumstances. These costs can vary monthly depending on what curve balls life decides to throw at us.
*I know giving to charity isn’t something everyone considers a necessity. I list it here because it’s very important to me so I count it as a necessity. Unless we are really struggling financially, we don’t cut it out of our budget.
This Month’s Summary: We did have some minor expenses this month with one of our cars requiring an oil change and my husband desperately in need of a new pair of jeans. He had literally worn a massive hole in the back pocket from wearing the same pair so much!
Groceries got us yet again – definitely, an area where we need to improve. This was partially from stocking up on food, so we don’t have to leave the house as often, but part of it was just because we weren’t watching the budget as closely as we should have been.
Auto expenses include minor car repairs, inspections, oil changes, new windshield wipers, new air filters, etc. Any major car repairs we usually have to turn to our emergency fund.
As a general rule, we give ten percent of our income each month to charity in the form of a tithe to our church. There have been some very tight months budget-wise where we were unable to give at all, but we want to be able to give back a part of our income.
I consider clothing a necessity here because we have a minimal amount of money allocated towards it. This money is not for us to buy the newest in fashion just because we want it. It’s for the clothing we have to have for work or because those old jeans finally wore down.
We don’t go to the mall to get those new jeans either. When we get new clothes, it’s usually at Target, Walmart, or a local thrift store.
We give ourselves a little breathing room when it comes to the grocery budget. The dollar amount we set is higher than we probably need to live on, but we stick to that number.There have been months we had to buy a lot of cheaper foods, but most of the time we like to splurge and get better quality ingredients.
One of our problem areas in the budget we have to keep a close eye on is going out to eat. That is so much more likely to happen if we are tired of eating the same, boring things at home. Although buying fancier ingredients increases our grocery budget, it keeps us from caving in and going out to eat several times a week.
Both of us have vehicles with good gas mileage and mostly drive to and from work, so our gas expenses are relatively low. The only exception is many weekends we drive more than sixty miles round trip to the rent house we are currently working to fix up.
Household supplies are anything we need to buy for the house that isn’t groceries. You know, all those other things that somehow end up in your Walmart basket — toilet paper, paper towels, toiletries, laundry detergent.
Any semi-large home purchases we need to make will be put in this category as well — things like new pots and pans, desk lamp, filing cabinet, etc.
This category is anything medical we pay for that isn’t our Medishare monthly payment: urgent care, annual checkups, unexpected prescriptions needed, etc. If our cat needs to visit the vet, we also consider that a medical expense.
Professional expenses are all my doing. They include non-recurring expenses for my job, such as continuing education courses or new scrubs. Scrubs cost a little too much for us to use our usually allotted clothing category amount to cover it.
Other professional expenses such as association dues, malpractice insurance, and licensing fees are recurring amounts, and we save for them yearly. You’ll notice them mentioned later under our savings goals.
The other professional expenses I have are the expenses to run this blog. These are minimal expenses compared to my other professional costs.
Discretionary Expenses: 7.8%
Our discretionary expenses vary from month to month. These costs are the first we cut in our budget if money is tight. These categories include all the wants on which we like to spend our money.
- Burn/Fun Money for me
- Burn/Fun Money for my husband
- Family & Friends
- Netflix and Amazon Prime
Travel and Christmas
This Month’s Summary: My husband and I spent our burn money, as usual. But this happened at the beginning of the month before we knew how everything was about to change. We had to make a drastic shift mid-month due to COVID-19 affecting our earning potential. Next month, the burn money is gone until further notice!
Dining out, uh. We’ve been pretty good lately not ordering food, but we did get take-out a couple of times in March, which inflated our Necessities spending.
Also, before all the hecticness hit, we paid for an annual subscription for Trusted Housesitters. This site primarily helps two types of people. People who need their homes and pets looked after while they’re out of town, and travelers looking for free accommodations. It’s a win-win! Travelers don’t have to spend a lot of money on lodging. And pet owners can know their pets are happy in their home environment without the boarding costs. You can sign up to housesit, sign up as needing a housesitter, or both.
We signed up to housesit to make traveling more affordable for us. I’ll let you know what we think once we get a chance to try it out!
Anything fun my husband and I go out and do together we can put in the activities category – going out with friends, mini-golf, bowling. This area of our budget permits us to have a little fun.
When we initially created our budget, we didn’t have a separate section for alcohol. It was lumped in with groceries. This method made it very easy to lose track of just how much money we spent on an expensive non-essential. To fix that problem, we decided to create a new category for it in entertainment since that’s what it is for us.
We call it burn money, but I’ve heard many people refer to it as fun money. Our burn money is the amount that my husband and I each get every month to spend on whatever we want. It’s “no questions asked” money.
Family & Friends
We use this money when we go out to eat with our family and friends. We also added this category after our initial budget creation.
After church most Sundays we go out to a restaurant with my family. Instead of using the entirety of our eating out money on that, we set aside a separate amount to just use when we eat with our family.
We have had to cut out this category almost completely after my income dropped from switching jobs. We recently have been taking turns cooking and going to eat at each other’s houses. This way, we can still spend time together without the added cost.
We started this category about eight months after we got married. I had switched to my second job, and money was starting to come in. Since I didn’t earn a lot at my first job, we hadn’t been going out and doing a lot together as a couple. We felt like we hadn’t been out on a date in a long time and added the romance part of the budget to help. It allows us to go out for a nice dinner once a month for a special date night.
Netflix and Amazon Prime
Honestly, this would be the last thing I’d cut out. Netflix is beyond affordable. Amazon Prime is worth it for us because it’s free tv shows plus the shipping perks.
Eating out or ordering take-out is our number one problem area and aspect of our budget we have to monitor closely. It is so easy to get in the habit of eating out, especially for a busy household.
To keep yourself from eating out as much, try the Mealime recipe and meal planning app. Click here to read my full review detailing how easy it is to get a home-cooked meal in 45 minutes!
Gifts are anything we buy for someone else that isn’t at Christmas. Christmas we save up for separately. Any birthday, baby shower, wedding, or graduation presents get placed in this category.
Travel and Christmas
I love to travel. It is extremely important to me to travel as much as possible and go to new places I haven’t seen. However, I do still consider it a discretionary expense, because, in a worse-case situation, I could stop traveling to have the money I need to pay bills.
In a pinch, you can DIY Christmas presents and cut the cost almost entirely out of your budget altogether.
Student Loan Payments: 25.7%
Thankfully, student loans are the only debt we have, but we have a lot of it. After graduating, we had $204,760 of collective student debt, all with close to 6.5% interest. It’s a battle, but we are slowly chipping away at it.
My Earnest Loan
My Husband’s Great Lakes Loan
My Husband’s OSLA Loan
This Month’s Summary: We’d already made payments on my student loan and my husband’s Great Lakes loan before we knew how drastically things were about to change.
The OSLA loan isn’t due until the end of the month, so we were able to only pay the interest due and didn’t have to make a full payment.
Student loans will prove very difficult for us to pay in the coming months. My refinanced loans are privately-held, whereas my husband’s are federal loans. Check out how to deal with either type of loan during this crisis by reading Financial Moves to Make During COVID-19.
Our loan pay-off won’t progress much in the near future, but currently, we’ve paid off $64,757.44 of our total $204,760.
Saving/Investing Goals: 30.8%
While paying off student debt, we still put money towards our saving and investing goals. Some people suggest you pay off all debt aggressively before contributing to retirement or other investments. Due to our amount of student debt, it will take a long time to pay it off. We don’t want to miss out on compound interest or other opportunities.
- Annual Professional Association Dues
- Malpractice Insurance
- Professional Licenses Renewals
- Water bill
- Electric bill
- Gas bill
Down Payment Fund
This Month’s Summary: No money was set aside towards Bulk Payments or our Down Payment this month. We spent nothing on repairs and only paid the mortgage and utilities on our rent house.
We did add another 9% to our Conservative Emergency Fund (~2.5 months expenses), making it 91% full. Honestly, this was an absolute blessing considering our reduced hours and my recent furlough.
We do have some substantial bills coming up like my malpractice insurance and taxes owed that will make our Emergency Fund not last as long. However, having some cushion during this has decreased our stress dramatically.
I can’t even imagine going through the current situation if I hadn’t made a job change in January. Switching jobs allowed us to build up our Emergency Fund as much as we did in three months. If I had stayed at my other job, we would barely have any savings and about ten times the stress!
Our Bulk Payments are any large annual bills that would be difficult to pay if we didn’t save for them throughout the year. We set aside money each month, so when the payment comes, we already have the entire amount to take out of our Bulk Payments savings account.
I have needed corrective lenses since I was nine. I don’t even remember what it’s like to wake up and have clear vision immediately after opening your eyes.
I also suffer from dry eye and require a special kind of daily disposable contacts. These contacts are extra-breathable and made of a gel, so they are more expensive than regular daily contacts.
Most vision insurances only cover $200 for contacts and the kind I need cost so much more. Because of this, it is more expensive for me to have vision insurance than to save up and pay for everything out-of-pocket.
Medishare doesn’t cover wellness visits for adults. Because of this, we plan to be able to pay the bill for our annual check-ups out-of-pocket.
Prescription savings is only to cover our monthly prescriptions we know we’ll be filling on a regular basis. Any additional prescriptions we categorize under medical expenses.
Also called a rainy day fund, our Emergency Fund is money we only pull from if necessary. It’s there to help us recover financially from the unexpected things that happen in life, so we don’t have to take on any debt.
There are many opinions on how much money you should have in your emergency fund. You’ll hear anywhere from Dave Ramsey’s starter emergency fund of $1000 to a year’s worth of expenses. We like to keep two months of expenses in our emergency fund at least.
If we have no other larger savings goals, we are immediately saving for we’ll pad it a little more. Right now, we’re saving for a down payment on our first rental property.
We are currently in the process of replenishing our emergency fund to two months of expenses. There have been many unexpected expenses that have forced us to take from our emergency fund this year. I started a new job with lower initial pay. Our car got totaled at the beginning of the new year. We had to remove a fallen tree at our rental house, to name a few.
The story of our first rental property is a long one, so I’ll try to summarize it best I can. My in-laws owned a house in the city where my husband grew up, the house he lived in since he was young.
A year ago, they decided to move out of state and knew we were looking to get into rentals. We initially planned to do some cosmetic repairs and then be able to start renting it out. However, once we took it on, we realized there was more to do than we first expected.
Currently, we are paying the mortgage while we fix it up. We don’t have much capital on hand upfront, so we are putting a lot of sweat equity into it at the moment.
Down Payment Fund
This is what we are currently saving to purchase a rental property. With all our other financial obligations and funding repairs for our rent house, we have barely anything saved for this endeavor yet. Our goal is to have the needed amount saved within the next year.
We are only contributing to our Roth IRAs at present. I am not yet eligible for the 401K at my new job, and my husband doesn’t have one through his work. We have dialed back our retirement savings significantly since we took on the rent house a year ago. We are using the money we would be contributing to fund repairs and save for a down payment to get our rental property producing passive income for us.
Cash Flow Analysis: 13.7% in the black
Our cash flow analysis is the final tally. Income minus expenses. Are we in the red, in the black? And if we’re in the black, where do we want to allocate that extra money.
This Month’s Summary: Hell yeah! Honestly, we didn’t expect this until we ran the overall numbers at the end of the month. Such a relief to be able to tuck away just a little more money before I don’t earn anything for a month.
All of the 13.7%, we put in our Emergency Fund to help us get through this upcoming financial storm. It’s raining – hard. I’m just so incredibly thankful we had another month in the black because the red months are coming.
You can see that after doing my financial progress report, I can’t hide from any of my overspending. Identifying where I fell short in my budget helps me pinpoint the underlying actions that cause it to happen and help prevent it from happening next month. Not to mention tracking your goals increases your chances of success in reaching them.
If you don’t do a cash flow analysis and track your progress monthly, I highly suggest you start. You’ll be amazed at how much faster you can accomplish your financial goals.
You don’t have to do your financial progress report the same way I do. Find a way that works for you, but do it. Right now. It only takes about fifteen minutes at the end of each month to make sure you’re staying on the right track.