Budget Friday Submission 3

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budgetI am SO excited about today’s budget Friday submission. Here are the details:

Crystal at Budgeting in the Fun Stuff was gracious enough to send me her budget submission. This is going to be fun! If you don’t know Crystal’s story, start here.

Crystal is a fellow personal finance blogger who has more energy than anyone I have ever (digitally) met. She has also been talented enough to build an online business strong enough to quit her job, and have her husband quit as well. They both work full-time, providing wonderful advertising services to fellow bloggers, and building valuable, entertaining websites. Since their income is wildly variable from month-to-month (see below), we are going to approach this budget a little differently.


Emergency Savings – $25,000

Other Cash in Banks – $50,000 (Using for 20% down payment on new house in September)

Crystal’s 401k from Past Job – $27,000

Crystal’s Roth IRA – $29,500

Hubby’s Roth IRA – $8850 (started last year)

Stocks/Cash for Stocks – $22,000

Current House – $120,000


Current House – $24,500

Extra Info

Any extra money is usually split between the emergency fund, cash for investments and home payoff, and fun money/vacation accounts.

This whole budget will be changed by their new home at the end of September:

+ about $2000-$2500 in monthly expenses (mortgage, property taxes, higher bills)

+ $1200 in monthly income for rental house (already have tenant lined up)

– $50,000 for closing costs on house

+ $209,000 mortgage

+ $260,000 house asset


1. Pay off current mortgage by the end of 2013.

2. Pay off new mortgage by the end of 2022.

3. Continue fully funding both Roth IRA’s every year ($10,000 a year).

Priority List

1. Time with friends and family.

2. Financial freedom.

Here’s what Crystal says, “Given those priorities, we outsource what we’d really rather not spend time on but save quite a bit for investments and mortgage payoff. I’d rather not look back in 30-50 years and be full of regrets. That is why we spend as much of our free time as possible doing what we like. It is also why we’ve been saving for retirement since we graduated from college in 2005.”

Here’s their budget submission:

YIPPEEEE! Wasn’t that a blast? Man, I love budgets, don’t you?!

Variable Income

Crystal has done what many of us wish we could do. She started her own dream business, doing what she loves and making a living off it. She is her own boss, she gets to work from home (or wherever there’s WiFi, really) and provides an amazing service to her fellow bloggers. Yes, she is making great money, but when her income can vary from month-to-month, we want to be as cautious as possible when putting together a budget plan. Dave Ramsey calls this a “hills and valleys” budget, some may call it a roller coaster, but the idea is that they have peaks in income (hers happened to be $23,000) and valleys (hers happens to be around $8,000). When planning a budget this way, it’s best to take the lowest possible number and base your entire month around that income. So their minimum budgeted income is $8,000 a month (+$1,200 with new rental), but their average monthly income is around $10,000.


At $10,000 a month on average, they are well below the limits of the Roth IRA income phaseout. But if they keep rocking it this hard, they are bound to make more money, in which case they will need to b aware of the Roth IRA income phaseout amounts. For a 2012 Married Filing Joint tax return, the Roth IRA limit is $5,000 if their earned income is under $173,000. If they make more than that, their contribution is reduced by 10% for every $1,000 more earned. So if they absolutely kick blogging butt and make $178,000, they can only contribute $2,500 per Roth IRA account. If they make $183,001, they cannot contribute to the Roth IRA at all, and would need to invest their money elsewhere (I would suggest opening a SEP, which is like a 401k for self-employed folk). Just something to think about for future planning.

I do suggest moving to a model where they are one month ahead. Currently, they transfer money into their checking account every two weeks, as they are used to the bi-weekly paycheck model. Paying themselves bi-weekly only delays their investment/savings accounts from receiving interest or growing. Since they always have the money at least one month in advance, they can just pay themselves $7900 by the first of the month and tackle their bills at the beginning. It really does make a difference in how easy it is to look at the big picture and whole month before it begins. They can also call their monthly billed services and have them bill at the beginning of each month (I recommend the 5th) so they can have all of their bills paid within the first week. This makes the rest of the month MUCH LESS STRESSFUL and all the money left is usable for more saving, investing or having some fun ๐Ÿ™‚

Goal Achievement

Here’s the payoff schedule:

  1. Mortgage #1 – $24,500.00 (gone by November 2013)
  2. Mortgage #2 – $209,000.00 (gone by January 2021)
  3. Financial Freedom!!!!

Snowball Effect

As usual, I suggest using the snowball method to paying down debt. Since their only debt is two mortgages, once they pay of the first one they can use that extra money to put toward the second mortgage. Their snowball would be about $1,795 per month after the first mortgage is gone. Based on some estimates with a mortgage calculator, they would pay off their mortgage in 7 years, 2 months! THEY WOULD SAVE OVER $136,000 IN INTEREST!!! How awesome is that?! And that’s if they only make their minimum income. I can see this happening much faster, and am excited to watch their progress!

One thing I did not address was where any extra income should go. Crystal already had a method of splitting extra income evenly toward tax savings (which I built into the spreadsheet to auto adjust as income goes up), investments and fun money! I honestly love that plan, but would add a 4th category, and that’s mortgage payoff. But I would do it this way. For every $1,000 extra they make a month, put the first $250 toward taxes (Uncle Sam always gets first dibs), the next $250 toward investments, the next $250 toward fun money, and the next $250 toward the mortgage. That means, if they only make $500 over, its taxes and investments. I suggest doing it this way because they are already on track to annihilate both mortgage at breakneck speed, but they really should be putting at least 15% into retirement. And since friends, family and free time are their priorities; I put fun money before extra mortgage payments.

I am truly impressed with how their current budget stands, and the fact that they will own two houses outright in the next 9 years! Owning two houses at their age is truly outstanding, and they are not only setting up themselves for life, but any future generations that may come. Well done, Crystal! Now, we’re waiting for you to blow my measly budget out of the water and kill these mortgages faster than Steven Tyler left American Idol!

Comments: What do you think?! Are there any small business owners out there (besides Crystal, obviously) who have any insights on creating a budget for your business? Is there anything I’m missing here? I am up at 12:30am on a weeknight to finish this budget, but I seriously love me some spreadsheets! Does that mean I’m crazyโ€ฆ? Or just passionate?

Speaking of Steven Tyler…

Iย took this photo fromย theย front row at the Aerosmith concert a few weeks back. I guessย all I can say is that if you want to achieve your budget goals, you need to “Dream on, dream until your dreams come true!” ๐Ÿ™‚

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites.ย 
Heโ€™s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

33 thoughts on “Budget Friday Submission 3”

  1. Wow, their budget looks pretty good overall. I really like the house repair savings bucket and I think they should definitely implement that. The increase in property taxes is OUTRAGEOUS. That can’t be right, can it? $10,000/year in property taxes is insane.

    I love seeing all of these budgets. It’s nice to have a thorough plan!

    • Sadly, yes, the property taxes for a $260,000 house here in our school district are really $700-$800 a month. Our current home is valued at around $120,000 but receives the $15,000 homestead exemption (which will shift, yay) and a little credit for being in a high foreclosure area (last year…doing well this year), so those are just around $200-$250 a month.

  2. Yeah that is a huge jump in property taxes. I guess their new home is a big upgrade. It’s cool to see a blogger doing so well financially and still setting up a solid budget. I should probably be setting up a budget with my fluctuating expenses too, but I’m just too good at procrastinating.

    • Yeah, property taxes will suck. We are doubling our living space and becoming the club house for our little group of friends in the area. Should be fun. ๐Ÿ™‚

      Our budget is the only reason we can do anything like buying this new house. Without, we would spend significantly more on crap we don’t need (we both need structure, lol). And yeah, with unstable income, it became even more important.

    • Jeremy, you will be on a budget sooner or later, trust you me! And I’ll be the catalyst. You should send me your info from a fake email (like “notjeremy”@gmail” and I can set it up for you ๐Ÿ˜‰

  3. Thank you very much for having me and my budget over for the day!

    I see the new charity column, lol. I volunteer once to twice a week at the local hospice and consider that my contribution. I do not like how people generally handle money donated to them, I do not tend to contribute when I don’t know what they will do with it. I am a control freak that decided to donate time instead. ๐Ÿ™‚

    Wow, you were very detailed!

    Yep, our homeowner’s insurance will be increasing by $100 a month. I should have let you know about all of our savings accounts that I just lumped together for you – emergency fund, taxes, vacation, two fun money accounts, and auto and home maintenance. So when we put money into savings, it is spread out between those. ๐Ÿ™‚

    We will not be providing housekeeper services for our current home, but our cost will probably be nearly doubling anyway since we are going from 1750 square feet to 3700 square feet. Funny fact, our biweekly housekeeper is actually going to be our new tenant, lol. She loves our current home layout and jumped on it when I said we were planning on renting it out. ๐Ÿ™‚

    Thanks again!!!

    • Thanks for coming to hang out (and your budget!). It was a blast setting this up as I’ve only helped people who are employed by someone else, so it was great to tackle a self-employed budget.

      Giving time is just as, if not more, generous! I just put that in there as a consideration, but you’ve obviously already considered it.

      And good to know about savings. I put a tracker in the spreadsheet I sent you if you want to use it ๐Ÿ™‚

      That’s awesome about your housekeeper! They probably become more like family after a while.

    • No crap. 3.2-3.5% around here…I am estimating high though. I would be super happy if they are like $650-ish instead. I have not taken into account a homestead exemption or anything…just estimated high…

  4. Very nice write up. A lot of details. ๐Ÿ™‚ I can’t wait until Crystal hosts us all at her new house. ๐Ÿ˜‰ haha. Just kidding, of course. The funny thing is that the property taxes don’t seem that high to a northeasterner. That’s on the low end of the spectrum for people in my town. That’s why I’m still an aspiring home owner and not a real one.

    • I am actually having several parties over 6 months, so just let me know what weekend you are in town. ๐Ÿ˜‰ I am trying to get Suba (Wealth Infortmatics) and Mr. Suba out to my place for Super Bowl weekend…we’ll have couches if the rooms are full…

      • it’s funny, my wife was checking out your priorities and your budget you posted on your site, and she’s like “that’s totally us!” We love to party as well, and just did some major outdoor renovations because we LOVE having people over. Sounds like you’re party central as well ๐Ÿ™‚

        • We weren’t until last year, but our little group of friends really got close and potlucks, board gaming, and movie nights have become the regular weekend things. ๐Ÿ™‚

  5. Crystal thanks for sharing your budget with everyone. Looks like your doing a great job and have planned for the increase expenses associated with the new home. What about moving expenses and additional purchases for the new home?

    • My husband took up a little side job as a bowling alley mechanic and has been keeping those paychecks in a separate cash pile over the last 3-4 months. I added in the little I’ve made by being a cow mascot, lol. That’ll end up paying for the movers, the new blinds, sodding for the back yard, and any other extras during the move. ๐Ÿ™‚

  6. Well Done. Those property taxes are outrageous. It’s so nice to see someone who is successful doing what they love. I’m sure it’s not easy but the pay-off has been great. Way to Go Crystal!! Budgets do funny things to us budget hounds lol… get’s us all happy when we see happy numbers!!! WTG Iheartbudgets… Cheers Mr.CBB

    • Yeah, this really put me in the budgeting mood. I used tonight to plug in all of our expenses from the last month (our months are from the 13th to the 12th). We actually had a really good July-August. ๐Ÿ™‚

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  9. I love how you have everything broke down. I think it’s wonderful that you are able to put so much into savings. I don’t know where I would be at if it wasn’t for following my budget!


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