This March 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. As I’ve continued the habit of blogging our budget, I’ve appreciated the accountability and the chance to reflect. It has helped me stay mindful with our spending.
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. We also have a toddler son.
I had planned for March to be a bit of a higher income month because I was expecting to pay out a small bonus from my tutoring business. That bonus ended up being a lot more than expected, and we were also fortunate to have a few additional sources of income as well. So overall, it was a successful month for us personally – even if, ironically, I didn’t reach my business goals for the month.
As part of our ongoing saga, my husband’s career change has been pushed back yet again. That means our car purchase is further out on the horizon and our budget is still dealing with a few unknown elements. (Read more about how I deal with unknowns in our budget.)
Overall, though, March was an amazing month for us. I’m proud of the progress we made toward our goals.
I use the Profit First system for my test prep business, and thank goodness for that. The past couple of months have been a lot slower than normal, and that finally caught up to me in March. I wasn’t able to reach my revenue goal of $6500 for this month, bringing in $5772 instead. But thanks to Profit First and the regular habit of setting aside money for Owner’s Compensation, Taxes, Profit, Operating Expenses, and Professional Development, I know that my business can sustain several bad months without me needing to take a “salary” cut from the business.
My target was $6500 for the month, in the hopes that I would get a few new students. I’m starting to see those students trickle in, so I’m hoping that April will be much better. But March fell a bit short. Here’s how the $5722 got divided up:
- Business Revenue: $5722
- Profit: $114
- Owner’s Comp: $3605 (This refers to the amount I set aside for my own pay, but my own paycheck is always a set amount each month.)
- Taxes: $1030 set aside for federal income taxes
- Operating Expenses: $486
- Professional Development: $486
I ended up filing my US Federal Taxes this month, and it was so nice to have the money I needed for that set aside in my business already. In fact, I had an excess set aside! After paying out my 2021 taxes, I calculated that I had more than $2000 extra in my Taxes account, not counting the money I had contributed in 2022. So I took that $2000 and moved it into my Profit account.
And then, because March marks the end of Q1, I paid myself a profit distribution bonus from my business. That ended up being $1418. Exciting!
March defied expectations here. Not only did I receive that $1418 bonus from my business (over $1000 more than expected), but we also earned quite a bit of additional income.
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.
Our extra income this month consisted of the following:
- $300 for opening a high-yield business checking account
- $140 for a few surveys (including a bonus on one survey)
- 20,000 won for selling something from our home
Major Financial Goals
Thanks to our high income this month, we were able to make major progress toward our financial goals this month. First off, I maxed out my 2021 Roth IRA contributions. (I had been on the fence last year about whether I should be investing in a Roth IRA or a Traditional IRA. In 2021 itself, I had invested into my Solo 401k, so that meant that I had until April 15th of 2022 to contribute my 2021 IRA. I decided that we would do pre-tax contributions to my solo 401k, and post-tax IRA contributions. Best of both worlds.)
After maxing out the Roth IRA, we moved on to the next highest goal. Originally, we intended that to be our new car fund. But because that is tied to my husband’s career change, I’m not entirely sure when we’ll need it. Saving for our next apartment, meanwhile, has been causing a bit of stress for me, so we ended up prioritizing that goal instead.
(In all honesty, those two sinking funds are pretty much the same. If we buy a car first, we’ll steal from the apartment deposit fund to pay for the car. And if my husband is given a car as part of his career change (fingers crossed!) then that car money will get redirected toward our apartment deposit.)
Here’s breakdown for the month
- Retirement savings: $2586.83, bringing our 2021 contribution to $6000
- Brokerage: Skipping this for now.
- Emergency fund: Just the interest earned in our high-yield savings accounts. We earn $5.10 per month on the $1000 of our emergency fund that we have at Digital Credit Union, and nearly the same on the $2000 of our emergency fund that we have at Current. The rest of the interest is nothing to write home about.
- Vacations/flights: $150 into vacation savings
- New car: Decided not to prioritize this one this month
- New apartment deposit: $811.43, representing every remaining cent from our budget
I’m honestly impressed by how well we are doing with our financial goals this year. Even though some goals are farther along than others, overall we’re 32% of the way toward reaching our total savings goal for the year. Not bad for the end of Q1!
We did a good job of staying on budget for our normal expenses. We were under in some categories and over in our miscellaneous category. But because we have enough of a buffer in the transportation categories (thanks to all the uncertainty about cars), we stayed significantly under budget overall.
Now that the weather is getting nicer, we’re trying to do a better job of getting out and doing fun things. We’ve been prioritizing free outdoor activities that don’t put our maskless toddler in close proximity with a bunch of other people during Korea’s insane omicron wave. I’m proud to report that we used nearly all of our “fun” budget this month.
Other notable points:
- Groceries/Eating Out: Still under budget here, which is great. Not sure how long that’s going to last with inflation, but we’ll do our best.
- Babysitter: We were under budget here because it took a while to finally find a replacement babysitter. We have an arrangement that works now, so April’s childcare expenses will be much higher…
- Misc: Not too jazzed about the expenses here. Part of it was having to pay postage to send my paper tax form back to the US in the most secure way possible. Another part of it was a purchase that will be refunded next month.
We use sinking funds for expenses that are more discretionary and that vary from month to month.
- Toddler Personal Spending: Trying to slowly build up a stash here. That’ll come in handy when we need to make those bigger purchases like a toddler bed or a car seat upgrade.
- Clothes: Originally wasn’t planning to contribute anything here, but we had the money, so I did.
- Car Repairs: Since we don’t actually have the car yet, the budgeted money here got redirected. This sinking fund will start officially once we actually have a car.
I’m proud of how we did this month. And honestly, it makes me eager to grow my business so that I can increase the salary that I pay myself out of my business. If we were able to make this much progress toward our goals every month, just think of how we’d be doing!
To check in on the goals I set for March:
- Get to $5000 contributed to my Roth IRA total for 2021 – SURPASSED
- Save $300 for a car – CHANGED into saving for our new apartment and SURPASSED by saving $811
- Stay under budget in groceries, eating out, and coffee – DONE
- Business: $6500 in revenue – NOT DONE (about $700 shy)
Money Goals for April 2022
I’m losing a bit of hope that my husband’s promised career change will happen anytime soon, so I’m going to be a little more reserved with my goals for April.
Our main goals for April include:
- Save $700 for retirement
- Save $500 for our new apartment deposit
- Stay under budget in groceries, eating out, and coffee
- Use our budget for “fun”
- Business: $7000 in revenue (requires getting a few new students)
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