August has quickly come and gone! Winter is finally over in our neck of the woods. It’s a relief to feel some warmer days after hibernating in the freezing temps for some time. I speak of the weather on a happy note.
Let’s switch quickly to my budget summary; this will give you a clearer vision of how our decision- making process with our money has impacted our lives.
Where did our money go?
I got a good grip of my August numbers. I was more intense in filling our savings goals which I categorised into the below:
As you can see, 49% for savings is the most significant expense.
I went overbudget with our food and groceries category; lucky I had more than enough in my cushion fund. I was able to rectify it instantly! I was able to save $90 from our shopping money though. It wasn’t as good as July but I will make it up again in September.
Our utility bills come next which has a rather long list of categories from insurances to all kinds of bills and living expenses; it also includes our church offerings.
Our cushion fund
Our cushion fund is also our starting balance for the month. It’s unusually more than what I allocate for but it is only because the savings from July was carried over. I rolled it over to my sinking funds for August.
As you know, I have been using zero-based budgeting method so what you are seeing is actually just the total sum of our paychecks.
For our monthly income, we use the cushion fund as our starting balance and the incoming income including that of our sinking funds which have already been saved previously into our high-yield savings account.
Savings and debt
We were still more intentional than ever in knocking off our last credit card debt. It must be noted that in a span of three months, we have paid off our 3 credit cards in full. We got 4 credit cards with a total of $25K credit limit for all of them. We used to be happy with the increased limit but later understood the burden of liabilities that go along with it. Only 2 cards are left active at the moment with the intention of keeping only one to a bare minimum down the track. Seriously, we have never been this intense in our previous budgeting life.
Oh! I forgot, we never had a budget life in our past life. Lol! 🤣
If you will just have a closer look, 21% of our income went to pay for the last credit card owing. This incurs no interest so I am snowballing it without impacting our lifestyle. I initially used the avalanche method but later stuck with snowball method after paying off the first card with the biggest interest (I may need to talk about this separately).
The biggest chunk of our budget is 49% which went to savings. I find it unbelievable that it ate up almost half of our income! As mentioned above, I allocated funds for specific purposes; the biggest cut is 26% for the appliances/ furniture fund which I will extensively talk about in my next blogpost.
It must be noted that my leftover cash from my envelopes this month was stashed away for our Church offerings; I did similarly from last month. I am getting extremely purposeful with this as we are preparing for our Yearend Thanksgiving in December. I am aiming of putting more in the next four (4) months.
My sinking fund is getting more and more specific. I failed to allocate from the previous months the payment for my webhosting and this domain’s yearly renewal. I was able to catch up by putting away $45 and will allocate $15 monthly for the rest of the year. Annual renewal takes place in May; the month I started out this blog.
Our sinking fund is our saving grace; it helps us save for the future. It covers mostly future events and occasions, quarterly specialist appointments, semi-annual dental appointments, yearly car registration fees, and all other random future payments. It is basically our savings bucket.
July versus August Spending
I want to know if I made some progress on my budget categories.
I must admit that we went over the top a little bit. I struggled this month on the food and groceries category. The budget I allocated is less than the actual spending. The spike in prices of basic commodities is not helping at all. The resolution would be to come up with an even realistic budget for September.
It is also important to note that our income has increased significantly in August due to the Tax Refunds that Mr. Budget Tipster and I received towards the end of the month. 59% increase is huge!
So what do you think have we done with the money? If you have been following this blog, you will know from the budget categories above that we have allocated a savings goal for one specific purpose. This one deserves a separate blogpost though.
More intentional with our money
Making the transition to becoming more purposeful with our money is a game-changer. The path we have taken is leading us one step closer in achieving our financial goals. We are now thinking long term and has the ability to see the bigger picture.
Overall, we have silenced the chaos, stopped the drama, and experienced peace in our lives for learning to take control of our money and our lives in its entirety.