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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. This October 2021 budget review is my first monthly update, but I plan to continue them regularly. I’m hoping they’ll also serve as great motivation for myself to keep working toward our goals.

 

Background

 

October 2021 was actually a strange month. For those who don’t know us, we are a multicultural family living in South Korea. I’m American, and I run a private tutoring business back in the US. My income is in US dollars.

My husband, meanwhile, is Korean and in October was finishing up studying for a real estate license exam in Korea. October was cram time, and so we decided that it would be better for him to rent a room at a local goshiwon, which is basically a cheap furnished studio apartment with a bed and a desk, designed for people who are hardcore studying. He was able to study there without interruption, which really helped. The rent for the goshiwon came out of our September budget and was paid for through a quarterly bonus I paid myself from my tutoring business.

(Update: He took the test on the 30th, and yay! He passed!

Update #2: We later found out he passed in the top 10%, which earned him a congratulatory scholarship, in the form of a partial refund, on the prep course he took. Yay!)

In September, meanwhile, the Korean government had given us 750,000 won in gift cards that could be used at local, non-chain businesses as part of a Covid stimulus. We had given part of that money to my mother-in-law, but we used the rest to counteract some of the increased spending that came from my husband eating out once a day.

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

 

Business Finances

 

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. My goal recently has been to add a cushion to my Owner’s Compensation bank account, so I currently am sending 76% of all my revenue to that bank account.

2021 Oct Profit First
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I projected having $6000 hit my bank account this month, but I was late in getting some invoices out at the end of October, so I didn’t reach my goal. I actually received $4865. It just means that November will likely be larger. One of the great things about Profit First is that these inconsistencies between months are evened out. My salary remains $3500/month regardless. $3697 (76% of my revenue) went into my owner’s comp account, so I still did accomplish my goal of building up a cushion there. Just not as much of a cushion as I wanted.

  • Business Revenue: $4865
  • Profit: $97
  • Owner’s Comp: $3697 (of which a portion was paid out as my salary)
  • Taxes: $730 set aside for federal income taxes
  • Operating Expenses: $292
  • Professional Development: $49 (back burner for now)

 

Household Income

 

In the breakdown below, I’ve blocked out my husband and my individual incomes for privacy, but our total income for the month of October was about $4016. Like usual in the second half of 2021, our income included $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 Oct Income
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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 Oct 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: $300 into saving for a deposit on our next apartment
  • New car: $150 into saving for a car
  • Vacations/flights: $328 into saving for vacations, of which we spent $63 (My husband decided to spend two nights in a hotel next to his exam location. His goshiwon rent ended a couple of days before his test, and plus, this would force him to not even be interrupted to come back home for dinner. More hardcore studying. That used $63 from our vacation fund (even though an exam is hardly a vacation…)

We’re prioritizing saving for vacation right now so that we can make a trip back to Seattle to visit family soon. Any extra money leftover in our normal expenses category gets funneled into our vacation fund. 

 

Debt Pay Off

 

We have very little debt at the moment. We’re working on paying off a washer/dryer and an air conditioning unit. Since both are at 0% interest, we’ve made absolutely no effort to pay them off early.

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

2021 Oct Debt Payoff
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At this point, we only have one payment left on the washer/dryer, and two payments left on the air conditioner. I’m looking forward to using that money in other ways once we have them paid off. (Most likely, we’ll use it to hire a babysitter so that I can spend more time on my business.)

 

Normal Expenses

 

Thanks to those Covid stimulus gift cards from September, we were able to stay on budget for October despite the added expense of my husband eating out every day while he temporarily lived in a goshiwon.

2021 Oct Normal Expenses
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Some notable points:

  • Eating Out: I increased our normal budget here, shifting money away from what we’d normally put toward groceries. I allotted $213, but we only spent $193.
  • Groceries: We were able to keep this to $430, which was even significantly under our reduced budget of $511 for the month.
  • Transportation: At the beginning of the month, I wasn’t sure whether my husband would take public transportation to his exam or whether he would spring for renting a car or taking a taxi. He opted for public transit, so we ended up only using $5.50 of the $60 I had set aside for transportation.

 

Sinking Funds

2021 Oct 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 $77, mostly consisting of a few toys, some vitamins, and some warm clothes.
  • Christmas/gifts: We were late starting our Christmas sinking fund this year, so with our extra savings this month, we were able to add an extra $100 to this fund. We also spent $65 in this category on our second anniversary and some early Christmas shopping.

 

Overall Update

 

October 2021 was a good month for us. By staying under budget, we were able to add more to our savings goals than I anticipated. 

Since my husband passed his real estate license exam, we’re also making solid progress toward increasing our income. We won’t see the effect of that until he’s able to jump through a few more hoops, but he’s well on his way.

I’d love to be able to add more to our retirement savings each month, but for now, since we have a few other big savings goals as well, we’re keeping our retirement savings to $700/month, which keeps us on track for retirement.

 

Money Goals for November 2021

 

Our main goals for November include:

  • Continue saving $700 for retirement, $150 for a car, and $300 for the apartment deposit.
  • Find $500 of additional income to split between our major goals, Christmas, and vacation
  • Stay under budget for groceries and eating out
  • Business: $6500 in revenue (will be tough!)

 

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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