This February 2022 budget review is part of a monthly series of posts in which I share our family’s real budget and real spending so that you can follow our journey toward reaching our financial goals. I’ve been sharing our budget for nearly half a year now. I’ve found them to be such a good source of reflection on our progress.

 

Background

 

As I’ve mentioned before, we are a multicultural family living in South Korea. My husband is Korean, earns in Korean won, and is in the process of switching careers to get into real estate. I’m American, and I run a private test prep tutoring business online back in the US. My income is in US dollars.

I had planned for February to be a bit of a difficult month financially. I didn’t have any planned extra income, so I anticipated that our babysitter expense would end up limiting the amount we could contribute to our financial goals.

And the month did end up being quite challenging – but not financially. Our childcare expense ended up being pretty low, due to the lunar new year holiday, one babysitter moving away, another babysitter catching Covid, and lots of difficulty finding another babysitter to replace the one who moved away.

Meanwhile, my in-laws visited for a large portion of the month. When they come, they bring food. Massive amounts of food. Their generosity makes the American in me feel a little uncomfortable, if I’m being honest, but it did end up helping us stick to our budget for groceries and eating out. Even though we did our best to reciprocate the generosity.

In other news, My husband’s career change got pushed back another month, which means that our car purchase also got pushed back.

So overall, we ended up making decent progress toward our goals for the year.

 

Business Income

 

My test prep business has definite seasonal swings, and this time of the year is always a bit slow. I did anticipate bringing in as much as I would in a typical month. But thanks to a couple of students who wanted to work more intensely this month, it ended up not being such a bad month after all.

I use the Profit First system for my business, which means that twice a month, I transfer all revenue into separate accounts set aside for Owner’s Compensation, Taxes, Profit, Operating Expenses, and Professional Development. I then pay myself a regular salary out of my Owner’s Compensation account.

2022 February Profit First
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My target was $6500 for the month, in the hopes that I would get a few new students. I only got one new student, but since a couple of pre-existing students worked with me more intensely this month, I ended up exceeding my goal.

I actually ended up with $7457. I’m actually not really sure how it happened, because I didn’t feel particularly busy.

  • Business Revenue: $7457
  • Profit: $149
  • Owner’s Comp: $4698 (This refers to the amount I set aside for my own pay, but my own paycheck is always a set amount each month.)
  • Taxes: $1342 set aside for federal income taxes
  • Operating Expenses: $634
  • Professional Development: $634

 

Additional Income

 

As for our family income, we didn’t have anything too unexpected here. Like usual, I’ve blocked out below our individual incomes for privacy reasons. And as with previous months, part of our extra income includes a 250,000 won (about $213) benefit from the Korean government for our toddler.

2022 Februrary Income
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The extra income mostly came from a bonus for opening a bank account for my business. Not sure if I’m actually going to use the account, but I do like earning a bit extra in bonuses here and there.

 

Major Financial Goals

 

My budget spreadsheet puts major financial goals at the top, just under the section for income. My general process is to commit ahead of time to the minimum amount I want to save toward these goals. Then, as the month progresses and our spending unfolds, we come back to those amounts and tweak them. The last step of closing out our budget involves throwing every last penny to the highest priority goal.

2022 February Major Financial Goals
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This month, “thanks” to our childcare issues and (legitimately) thanks to the generosity of our visiting in-laws, we were able to exceed our goals in these saving categories.

  • Retirement savings: a whopping $2113.17 into my 2021 Roth IRA (I’m trying to max this out by April 15th, so it’s a very high priority now. We had been slightly prioritizing saving for a new car, but with the downturn in the market, we decided it was better to invest as heavily as possible instead.)
  • Brokerage: Skipping this for now. Funding the Roth IRA comes first.
  • Emergency fund: Our contribution here was just the interest earned in our high-yield savings account, plus what we earned from the SaveRight program (recently rebranded to Dollop – a program rewarding Americans for having an emergency fund.)
  • Vacations/flights: $100 into saving for a trip back to Seattle as soon as I’m brave enough to fly with a toddler
  • New car: $300 into saving for a car (We were anticipating throwing every last cent here, but decided to prioritize my Roth IRA instead.)
  • New apartment deposit: Nothing for this month, since the car purchase will happen sooner.

I’m honestly impressed by how well we are doing with our financial goals this year. If we keep this up, we’ll be able to reach our savings goals for the year.

 

Normal Expenses

 

February in South Korea consisted of the lunar new year holiday, followed by omicron. Our toddler obviously isn’t vaccinated against Covid, and one of the in-laws who was staying with us is immunocompromised with a heart condition that led doctors to only recently recommend vaccination. So we didn’t do much outside of our normal routine.

2022 February Normal Expenses
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Some notable points:

  • Groceries/Eating Out: Way under budget here, which is great. Partly this is due to in-laws visiting and bringing a ridiculous amount of food with them. Partly it’s due to my efforts to cook low-sodium freezer meals that are better for my ear condition anyway.
  • Babysitter: Having all your childcare fall through really helps you save money on childcare. It’s great to have that money to go toward our goals, but honestly our lives will be a lot less stressful once we have this worked out.
  • Car Insurance: My husband’s career change got postponed again, so we didn’t need to worry about getting a car just yet as well. Therefore, no car insurance payment. 

 

Sinking Funds

 

We use sinking funds for expenses that are more discretionary and that vary from month to month.

2022 February Sinking Funds
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Notable items:

  • Toddler Personal Spending: We’re sticking to a slightly higher amount here. I’m kind of resigning myself to the fact that we’re not switching back to cloth diapers anytime soon. I have to ask myself whether that’s one of the battles I want to wage with the in-laws, and maybe it just isn’t.
  • Clothes: When I thought our budget was going to be tight, I decided this was one sinking fund we could skip this month. Then I forgot to add it back in once I realized we’d have extra money. Oh well.
  • Car Repairs: Since we don’t actually have the car yet, saving for the car purchase is more important than saving for car repairs, so the budgeted money here got redirected.

 

Overall Update

 

This month was a crazy one. But really, what month isn’t crazy these days? I have mixed feelings about it – it was great to send so much money to our savings goals, but sometimes I just want a return to “normalcy.” (In quotes, because I don’t think we’ve had a “normal” month since 2019.)

To check in on the goals I set for February:

  • Save $1000 for retirement and over $400 for a car – SURPASSED and MOSTLY DONE (we more than doubled that amount to retirement, but only did $300 to the car)
  • Stay under budget in groceries, eating out, and coffee – SURPASSED
  • Business: $6500 in revenue – DONE

 

Money Goals for March 2022

 

I’m still holding out hope that my husband will be able to make his career change official sometime this month. We’ve been waiting a long time for that. When that happens, we’ll have big changes in our budget, and it’s hard to really predict how to deal with it. March’s budget includes some extra cushion and contingencies, but we also have my Q1 profit distribution from my business to help us out.

Our main goals for March include:

  • Save $1587 for retirement (oddly specific, but that will get us to within $1000 of the $6000 limit)
  • Save $300 for a car 
  • Stay under budget in groceries, eating out, and coffee
  • Business: $6500 in revenue (business is still slow, so I need quite a few new students if I want to have a chance of making this happen)

 

This post may contain an affiliate link or a referral link. For more information, please see my disclosure here.

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