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In these monthly updates, I share our family’s real budget and real spending so that you can follow our journey toward reaching our financial goals. The budget reviews also serve as motivation for myself so that I don’t lose sight of our goals.

 

Background

 

A little bit of background before jumping in. We are a multicultural family living in South Korea. I run a private test prep tutoring business back in the US, and so I earn a US income. I focus primarily on the LSAT (to get into law school) and the SAT/ACT. November is the busy season for my business since it’s right in the middle of when students are applying to law school and college.

My husband is Korean and is working on switching careers. He passed his real estate broker exam at the end of October after two years of studying. It’s been tough for him, since he was always too busy to study as much as he really wanted to. In December, he’ll have some other required professional development trainings, and then he’ll be able to start looking for his new position in January. Things will be a little easier for us once his income grows as a result of the career change, but we’re making things work in the meantime.

So with that in mind, here’s what happened with our finances this month.

 

Business Income

 

I use the Profit First system for my business. So on the 10th and the 25th of each month, I take all the revenue I have received for my business and I divvy it up into separate bank accounts set aside for different purposes according to the percentages that work best for my business. Currently, that means 65% to Owner’s Comp, 15% to taxes, 1% to profit, and the rest split between regular operating expenses and professional development. I decided to invest more heavily in professional development starting in 2022, so I’m trying to build up some cushion there.

2021 Nov Profit First
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November was a blockbuster month for my business. Since I was a little late getting some October invoices sent out, some revenue that should have hit in October actually hit in November. It’s also the busy season – it wasn’t uncommon for me to meet with five different students in a day.

My target was $6500 for the month, but I actually ended up with $9366! Definitely my biggest month to date. It feels nice to see my hard work pay off.

  • Business Revenue: $9366
  • Profit: $93.66
  • Owner’s Comp: $6088 (of which a much smaller portion was paid out as my salary – Profit First helps me even things out so that I’m prepared for slower months as well)
  • Taxes: $1405 set aside for federal income taxes
  • Operating Expenses: $843
  • Professional Development: $936 (ramping this up after it’s been back burner for a while)

 

Additional Income

 

Like usual, I’m blocking out our individual incomes below for privacy reasons. This month, in addition to our salaries, we also received $300 in child tax credit from the US government for our toddler and 250,000 won (about $213) child benefit from the Korean government.

2021 Nov Income
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I also earned a bank bonus this month for opening an account through Chime. It was such an easy way to earn some extra cash. Highly recommend!

There’s also a little additional extra income from a survey. And then finally, I received a gift from my in-laws so that I could take a much needed mini-vacation around Thanksgiving time. I believe in being a good steward of money received as a gift as well, so I do actually add it into the budget, then I make sure to spend it in a way that is in line with the gift giver’s intention. More on that below.

 

Major Financial Goals

 

My philosophy here is to commit ahead of time to the minimum amount I want to save toward our financial goals. Then we revisit those amounts at the end of the month and contribute any surplus amounts towards whichever goals are highest priority.

2021 Nov Major Financial Goals
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Because we did so well with our spending, we were able to save even more than anticipated in our vacation fund, which is top priority at the moment. Here’s how our contributions broke down.

  • Retirement savings: $700 into my Solo 401k
  • Emergency fund: we are comfortable with how much we have in here, so we’re just contributing the interest earned in our High-Yield Savings Account. This month, that was $2.64.
  • New apartment deposit: $400 into saving for a deposit on our next apartment
  • New car: $150 into saving for a car
  • Vacations/flights: $314 into saving for vacations, of which I spent $91

In November, I took a mini-vacation by myself to a neighboring city. I needed some time to relax and sleep after the hustle of the last few months. We were planning to have this mini-vacation funded by our vacation sinking fund, but the complete generosity of family members in Korea ended up more than covering it! I’m so grateful, because that means that the money we have in that vacation fund can stay dedicated to funding a future trip to the US to visit my family.

 

Debt Pay Off

 

This month was our last payment on our washer and dryer, and we just have one remaining payment on our air conditioner unit. Both of these debts were 0% interest, but it will be so nice to free up this money for other things soon.

  • Washer/dryer: $203
  • Air conditioner: $213

2021 Nov Debt Payoff
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Normal Expenses

 

For most of our budget line items in our Normal Expenses category, we were able to stay on track. A little over in coffee, and it looks like we also paid more on our internet for some reason. Nothing alarming though.

The big thing here was that we decided to start using a babysitter earlier than planned, which meant almost $200 in unexpected expenses in November. So worth it, though. It has been so great to have a bit more dedicated time for my business, and my husband has also appreciated the time. Previously, he’s had childcare duty during the morning and then has had to compress all of his work and studying into the afternoon and evening hours.

Our son loves his babysitter. She finds so many interesting things for him to explore, and she has done wonders for his eating habits. We love her. Right now, she’s just coming a few times a week for a few hours at a time, but we’ll expand that once my husband starts work in January.

2021 Nov Normal Expenses
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Some notable points:

  • Coffee: Over budget a bit here because I was trying to carve out a bit more work time for myself at a coffeeshop before we hired our babysitter.
  • Car Rental: We didn’t end up using the $60 I allot each month towards a one-day car rental. That money was funneled into compensating for the unanticipated babysitter expense.
  • Babysitter: This expense includes a registration fee for a popular babysitter app in Korea plus the first week of actually paying for the babysitter. The standard hourly rate in our part of Korea is 10,000 won per hour, which I realize is ridiculously cheap compared to the US. Once we have the funds available, we will be offering our babysitter a raise, but even with that, the price of childcare is another way that geoarbitrage (earning in a higher cost of living area and spending in a lower cost of living area) is helping our budget. 

 

Sinking Funds

2021 Nov Sinking Funds
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We use sinking funds for expenses that are more discretionary and that vary from month to month. Notable items:

  • Toddler: We put in the equivalent of $85.30 and spent about $129. This is why I love sinking funds. Because we had spent less in previous months, we had the money already set aside when our expenses were higher this month. They were higher this month because of some things we ordered from the US with shipping fees and because we ordered diapers. (We cloth diaper except at night, so we only buy diapers occasionally.)
  • Christmas/gifts: Since we are playing catch up with our Christmas sinking fund, we contributed $200 this month. Of that, we spent $107 on a tree, lights, and some Christmas gifts. 

 

Overall Update

 

Despite our unexpected babysitter expenses and my mini-vacation over Thanksgiving, we were able to stay on track with our financial goals this month. Generosity from family here in Korea definitely helped, but it also helped that our budget has enough padding in it that we can shift things around mid-month to still end up ok.

To check in on the goals I set for November:

  • Continue saving $700 for retirement, $150 for a car, and $300 for the apartment deposit. – DONE!
  • Find $500 of additional income to split between our major goals, Christmas, and vacation – Nearly done
  • Stay under budget for groceries and eating out – DONE!
  • Business: $6500 in revenue (will be tough!) – DONE! (I thought this would be a tough goal, but I kind of knocked it out of the park..)

 

Money Goals for November 2021

 

December is going to be a tricky month for our budget. We’ll have a bigger childcare expense, but I’m still planning to hold off until January to give myself a raise from my business. Luckily, since December is the end of Q4, I can anticipate a small profit distribution “bonus” from my business. That’ll get funneled straight into the babysitter fund.

Our main goals for December include:

  • Continue saving $700 for retirement, $150 for a car, and $300 for the apartment deposit.
  • Use only the funds in our Christmas sinking fund for gifts, decorations, and Christmas experiences
  • Use our vacation fund to take a two day trip to my husband’s hometown, but replenish as much as possible in that fund through any extra money in our budget
  • Business: $6500 in revenue (will be challenging – December is often a slow month unless I find clients who want to cram during break)

 

Some of the links in this post may be affiliate links. If you click a link and purchase an item I may receive a small commission at no extra cost to you. All opinions are my own. Read the full disclosure here.

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