Several years ago, I shared a ton of information on Instagram (scroll through highlights and look for “budgeting”) about the particulars of our family’s budget. It was so long ago (March 2022) that our average expenses have changed, as I’m sure many of yours have as well. The things I shared though are still valid, even if things are a bit tighter now. Those were things like:
- how we have our budget organized
- what goes into each category
- tips and encouragement for getting out of debt
Firstly, when we got married, we had a lot of debt (school + car loans mostly) and our road to becoming debt-free was not quick and easy. I was often discouraged by the stories I would see of couples getting out of even greater debt in less than a year! It took us over 10 years, and we did our very best. We added four children in that time, and I also came home from the workforce once we had two children. We were not willing to sacrifice time (irreplaceable) with each other or with our children to make it happen faster. We didn’t work two to three jobs a piece or completely cut out all travels. We did however make other “sacrifices” to reach our goal of a debt-free life. I use the term “sacrifices” loosely because we were still privileged in what we had compared to so many others across the globe.
For starters, I thought it would be helpful to see our financial history in a snapshot format, or if you want to, you can read the longer version here. Since our debt payoff we have continued to live within our means and utilize the same principles we used to get out of debt…and to stay out of it!
Our Family Budget
Ok, sooooo…. before I jump into our family budget and how we organize everything, I wanted to explain a few things:
- I LOVE budgeting. I love organizing our finances, and I love to track all of our expenses and itemize them very specifically. YOU, my friend, do NOT have to do that. You don’t have to be as particular as I am. This is just what I want to do, and I know it can be simplified, but I choose to be this extra. ha.
- I want to share this information as an encouragement, and something that you can take at least one thing away from. Not as a template that you need to follow to have a successful budget for your family. I have set up our budget in a way that makes sense for US. I am not advocating that you set yours up exactly this way.
- We made a point shortly after becoming debt free to get a month ahead in our budget. What I mean by this is that the whole next month is pre-loaded and fully funded before we even get to it. Any new income that comes in then goes into the month after that and so on and so forth. This has been a comfort and has officially broken that paycheck to paycheck cycle feeling. I will talk about this more later!
- We have used a budgeting software tool called You Need A Budget (YNAB) for years and continue to love it! I honestly think I can say that staying on track and getting out of debt is partially due to using YNAB… and our own determination and prayers. I’ll gush more about YNAB later.
First, I will go through the details of each category and subcategory in our budget listed below. Second, I will then share some overall tips for budgeting. Finally, I will talk about how you could use windfalls like tax returns and bonuses to get you ahead in your finances! Buckle up because this is a lengthy blog post!
Disclaimer: I am NOT a financial expert or advisor. This is just what has worked well for us and I want to pass along to others it may help. If you need financial guidance, I would recommend reaching out to someone who is qualified to offer that guidance on a personal level for your unique needs.
Charitable Giving
Tithing
Now we understand that tithing isn’t something that everyone does, but as Christian believers, we believe in giving back to God a portion of what is already His (everything we have). So, we first tithe to our local church every month. This is a personal decision for each family as far as how to give back to God, but this is what we feel led to do.
Other Giving
Monthly Expenses (Fixed)
Rent/Mortgage
We have rented our entire marriage of 15 years and we have yet to buy our first home. The last two years we have lived with family and have thankfully not had to pay any rent. This is a huge blessing and we know this is just for a time. However, when we were renting, our rent was on the low side and we felt very blessed with that as well. We are currently trying to figure out next steps in this area. So this area of our budget at the moment is blank, but we have been putting money back for the last two years.
Utilities
Our utilities when we were renting included electric, gas, sewer, and water. We did not have a trash or recycling pickup cost which was really nice. Even though these expenses can fluctuate every month I kept it in this fixed category anyway because that’s my business. We do currently contribute to the utility expense where we are living a bit each month. I can see the utility expense being a lot once we get our own place. It will just depend on where we end up I think. I typically will put aside the average amount (if not a set amount each month) in each utility category (I do separate them out).
Insurances
Boring, just gotta do it expenses. Our car, renter’s (when we’ve needed it), and personal asset insurances are all bundled for savings with the same company. We switched over a year ago after our insurance broker found us a less expensive option. We just sold our second vehicle (any other one-car families out there?) to lower that cost even more. Our life and disability insurances are with another company. There is insurance available for everything if you want it, but these are the areas we have chosen. Well, except car insurance because it is required. ha.
Annual Car Registration
In the state of Tennessee, we are required to pay an annual car registration fee. This is an expected expense every fall for us, and it’s basically the same amount every year. I set aside a small amount every month so that by the time the fee is due the whole amount is sitting in our checking account waiting for it to be paid.
We pay for two streaming services and that comes out to a little less that $20/month. As for our mobile phone expense, we are part of a family share plan with my siblings and it has been a fantastic money saver! Do this if you can! A monthly internet expense would go in this category as well. We also pay for a small ($3) monthly cloud storage service for our mobile phones. No cable, landline, or other monthly technology subscriptions (for now). We’ve discussed a music streaming service, but haven’t bit the bullet yet. I’ll also mention that we pay for a larger cloud storage service that has an annual fee, but I will get to that later.
Monthly Expenses (Flexible)
Groceries
This is a category that could take more than just a paragraph for discussion, but for my purposes here I will just state that in the past we did our best to stick to the “$100/person/month” rule. So for us that would have meant about $600/month. With the economy the way it has been for the several years… this hasn’t been possible. I’m sure everyone has felt the pinch. We do try to eat mostly at home, but even still, this is an area that has been difficult to keep down. I also typically shop for 4 adults and 4 children right now (12, 10, 8, 6) so our budget in this area has changed the most. We do still shop primarily at ALDI and Costco. We do not buy ALL organic foods. We do not have any food allergies or restrictions. We don’t eat a ton of meat. I would say our budget in this area has been more like $150/person (8 people) in the last two years on average. If you are interested, the USDA publishes monthly cost of food reports. I still think they are inflated a bit.
Coffee Subscription
I love coffee, and even though I’ve been caffeine free since October 11, 2023 (yes, I know the exact date), I still enjoy making a decaf espresso on my spiffy Breville occasionally. I use a subscription service called Craft Coffee that lets me order and adjust my ship dates whenever I want for only $12.99 (that’s with shipping included) for a bag of fresh roasted whole beans! If that’s something you are interested in, you can use my code (GSH-NYU) for 15% off!
Dining Out
There are some months where we eat out more than other months. We typically save the same amount in this category per month, but we don’t always spend it all. We try to keep to one meal out a week, but sometimes it’s more, and sometimes it’s less. Typically never Monday – Friday. Only on the weekends when Mama needs a break!
Home Goods (Essentials)
I separate our home goods into two categories. Not to be confused with the store of the same name, these are home goods that are essentials like our toiletries, paper goods, fridge & air filter replacements, cleaning supplies, dish and laundry detergent, and trash bags. They all live in this category. I typically budget the same amount in this category per month and if it doesn’t all get spent it just stays in that category for the next month.
Home Goods (Non-Essentials)
This non-essential category is where I place all the purchases that we could easily live without. Things like home decor, new reusable shopping bags, a new external hard drive, a new purse, a cute homeschool mama mug, gardening supplies (not essential for us), cute earrings, a bird feeder… you get the idea. This is where we budget for those things that we simply want. I typically don’t budget the same amount every month. It’s usually an arbitrary amount that I place there when everything else has been covered.
Wellness
Thankfully we have pretty decent health insurance through my husband’s employer, and we have an HSA (which we try to max out every year) that we contribute to every paycheck. This covers any doctor’s visits or prescription medications. So this category is typically just for anything we can’t use the HSA to pay for, be it any vitamins, supplements, occasional band-aid box, cough medicine, or essential oil. We don’t always spend from this in a month. So leftover funds just rollover to the next month. (I will say that we’ve had a gym membership for almost a year, but that is a separate subcategory under “fixed expenses” right now and we will be cancelling soon.)
Fuel
Literally gas for our vehicle. Nothing much to say here. We have a 17-year old Toyota Sienna. It still runs really well thankfully, and we have a category (just below) where we save for maintenance and repairs. We’ve also started saving for our next used vehicle because the van just hit 200k and we know it’s only a matter of time really. My husband works remote and we don’t do a ton of driving around on a daily basis, so we aren’t blowing a ton of money in this area each month.
Car Maintenance/Repairs
Even though we own our vehicle, there is still the inevitable repair expense that comes up. Not to mention the more frequent maintenance requirements of oil changes, new windshield wipers, and a new set of tires. I fund this account every month with a set amount, and whatever is not used gets rolled over into the next month.
Grooming
Haircuts. That’s it. These happen sporadically for myself and the girls, and about every 6-8 weeks for the boys. I just put in a set amount each month and it just gets spent as needed and there is always money in this category. I’ve never colored my hair, and I don’t get my nails done except super rarely. Hair products go in the essential home goods category with the other toiletries. This category covers everyone’s haircuts, unless I’m feeling brave and cut all of the boys’ hair myself which I haven’t done in some time because it causes me too much anxiety!
Apparel
This is where we place money in our budget for inevitable clothing and shoe purchases. Thankfully we get a lot of hand-me-down clothes for the kids, but there is always something we will have to purchase. I don’t really have the time to scour second hand stores, so I tend to purchase new (on sale preferably), but I don’t buy from expensive stores. I assess the children’s needs each season and make notes of the things they will need. So I really don’t feel like we spend a lot in this area. It comes in spurts. If there is an amount set aside every month, then when we need to purchase something, the funds will be there. This is for the whole family.
Special Gifts
This is where we place funds for birthday presents for our children or others, any birthday expenses like a cake, balloons, decorations, and Christmas presents. We fund this a little bit every month so that we have enough for when our big birthday season comes (all four kids have birthdays within a four week time span) and then the holidays later in the year. I don’t like to be surprised by these expenses. We know they are coming, so we might as well make sure we are funding that subcategory.
Fun
This is the category where one off things like movie theater tickets, a baseball game, an annual athletic/sports app subscription purchase, or state park entrance fees would live. Again, just an amount placed each month so that when the need arises, there are funds available.
Homeschool Expenses
I keep a set dollar amount in a “main homeschool fund” every month. Let’s say I put $150 in there. As I spend money during the month, I then allocate those dollars to one of the five categories listed below. Once the money from the main fund is spent, I need to wait until the next month to make any more purchases in any of those areas.
General Supplies (Essential)
This subcategory includes things like pencils, tape, markers, paper, basic notebooks, printer supplies, etc.
Extra Resources (Non-Essential)
This subcategory includes things like storage bins, binders, post-it notes, school decor, or items for a craft or activity, etc. These we can assuredly live without, but they are nice every once in a while to splurge on.
Outsource
We don’t currently participate in a co-op, but if we were, this is where I would save for any annual fees. Same with memberships like the zoo. Any lesson expenses for something like ballet or piano would live here too, or seasonal sports fees. I would also take field trip expenses out of this category as well. Basically anything we do outside the home that counts as a school related activity.
Books
As you can imagine, this is my most used subcategory. This covers any books for the children outside of curriculum. I mostly buy from ThriftBooks or other used online sellers, local used bookstores, some Instagram used book accounts, or Amazon.
Mom’s Books
Over the last few years, I have rediscovered my love of reading and have made it a point to make time for this activity for myself! I’m loving it. (You can find me on Goodreads if you are interested.) I wanted to track my own expenses for those books that are just for me right now, so about a year ago I created this subcategory under homeschool expenses. I’m sure I could move it elsewhere in our budget, but for now this makes the most sense to me.
Curriculum
Pretty straightforward here. This is where true curriculum is allocated. Our main math, language arts, science, and history resources all get put in this subcategory. The bulk of the spending for this is done before the start of a new school year.
Travel Expenses
Our family loves to travel. Whether that’s to see friends and/or family, or visiting some new places across the globe. This is a high priority funding category for us. We have also gotten really good at travel hacking (a bit more on that later) to save money and often have mostly free accommodations and flights.
We have a category and subcategories similar to the homeschool category where we allocate expenses from a main travel fund that we place money in every month for when we take our next trip. This would also include any extra expenses (eating out, etc.) we would have when someone comes to visit us as those would be out of the norm expenditures for us on a regular basis. I just like to track those separately. In the memo line of the expense I will note what trip it was for and then I can go back and see how much we spent on each trip. This also helps us to budget for future trips!
Airfare
This subcategory is just what it sounds like. The cost of airfare.
Transportation
All other transportation that isn’t airfare goes here. Uber or taxi rides, bus, train or subway fares, and even the occasional ferry ride. Basically anything where we have to pay to get from point A to point B.
Lodging
Hotels, Airbnbs, actual B&Bs, a yurt in the desert… those go here.
Food
You guessed it. Food or drinks on our trips goes here.
Miscellaneous
This last travel subcategory holds anything else related to our trips. That would usually mean entry fees to a museum, a fun excursion, souvenirs (we like to grab magnets), National Park fees, etc.
Sinking Funds
A sinking fund is basically a savings account that holds money set aside for a specific purpose. This is a category that I used to have other things in, but in a recent budget refresh I moved those subcategories to other areas (i.e. annual car registration) or created a main category for them (i.e. future house savings). These four subcategories are really just four annual expenses that we save a little every month toward (total cost divided by 12 months). These four are: our annual Costco membership fee, our annual YNAB fee, one annual credit card fee (the only one of our credit cards that has a fee), and lastly our GoogleOne annual fee (this is for like 2TB of space for photos, videos and documents).
Personal Business Expenses
This is a main category where I just track the income and expenses of my personal business. I only have one recurring monthly expense here (flodesk email servicer – you can get 50% off your first year using my link!), so I plan for that amount each month. I have annual expenses that I save for over several months’ time (web hosting, LinkTree, Canva, etc.). Any income comes through this category, but then gets sent to “ready to assign” in our budget to be used somewhere else in our overall family budget.
House Down Payment
This category is just where we put any money we can towards our eventual house down payment. It doesn’t stay here though, we transfer anything that gets earmarked for this category to an individual taxable investment account. This way it can earn a lot more than if it just sat in a regular or even higher-yield savings account (which we utilize as well).
Credit Card Use
We pay for anything and everything we can on a specific credit cards and pay those off a couple times a month (because I’m obsessive a bit). We never owe interest that way, and essentially we treat these like our checking account. Our budget tells us how much we have to spend with the money we actually have in the bank, and any purchases we make on our credit card are automatically deducted from those categories in our budget through YNAB and placed in our credit card category which is to be paid by our checking account. We never use the credit cards unless we have the actual money in the bank to back it up!
We do this because we utilize those points for our traveling! We’ve used these points for free hotels, flights, car rentals, etc. Some cards have a higher point percentage on dining out, some on groceries, some on gas… you get the point. We strategically use our cards to get the most out of our spending so that we can turn around and use those points on free travel expenses!
Example: Our ten day, 10-year anniversary trip to Portugal, Belgium, and the Italian coast only cost us $2,500 all in (hotels, airfare, food, souvenirs…all of it!). A more recent trip for our 15-year anniversary to Prague, Greece, and Ireland was about the same, and that included hiring a professional photographer for anniversary photos!
NOTE: If you don’t have a great history with credit cards, I wouldn’t suggest this tactic. Just stick to the debit card/cash system for accountability’s sake. You don’t want to get into the cycle of spending more money than you actually have!
Three Quick Tips!
It takes time to establish good budgeting habits and getting out of debt is no easy task. Here are three things you can start doing right now that can make an impact!
- Make a list of your top 3 spending priorities outside of your required expenses every month. Travel? More whole, organic foods? Fun, local outings? Regular spa treatments? Whatever you choose here, make a plan for setting aside money every month to make sure you always have the funds to support those priorities.
- If you are over budget every month, start by picking something you can stop paying for within the next month for starters. A monthly subscription? An unnecessary streaming service? One less meal out a week? Just start by cutting one thing out and see if there is more over time that you could cut from your monthly expenses.
- If you are debt-free already, start by getting a month ahead in your expenses. I cannot tell you how freeing it is to have the next month already pre-funded before we even get to it! Start little by little adding your excess every month, no matter how small, to the next month’s expenses. Before long, you will have the next month fully funded, and anything you bring in in a month will be for the next month and not for any of the current month’s needs!
Getting a tax refund?: Here’s how you could use it to get ahead!
If you are expecting a tax refund, I’d love to share several practical ways you can utilize it to get ahead financially. We did many of these things over the years! We try not to get a tax refund, but usually we end up with one anyway. These same ideas would apply for any windfall really (a bonus, an inheritance, the sale of something more substantial like a car, boat, etc.). If you happen to use, or want to use, TurboTax this year for your filing, I’ve got a 20% off referral link you can use!
Pay Off a Debt
This may be super basic, but it is NOT easy to do sometimes. Watching that money just immediately disappear is hard emotionally. However, knowing that car or school loan, medical bill, or credit card debt is no more brings so much peace!
Set Aside an Emergency Fund
This doesn’t have to be any specific amount, but saving for this little by little can be daunting. Why not take some of your tax refund and just immediately have a $1k emergency stash fully funded waiting for the inevitable?
Save for a Trip
Do you want to take the family on a big trip in the next year or so? Why not put your tax refund into a savings account to jump start your funds for that vacation? Knowing that you already have the money set aside for this, makes the trip even more of a reality!
Get a Month Ahead (or more!)
As I have mentioned a few times, getting a month ahead in our expenses is something that has helped immensely in our financial peace. We’ve actually managed to stay about 4-5 months ahead in our expenses. You can do this little by little, or depending on the amount of your tax refund (and your monthly financial obligations), you could do it mostly all at once!
Use for Homeschool Expenses
Homeschooling doesn’t have to be expensive, but the more kids you have, the more it CAN add up. We have often used portions of a tax refund to set aside for curriculum, books, supplies, and co-op fees. This way we can just spend from this category as needed.
Fund a Savings Goal
Budgeting Resources
If you’ve made it this far… bless you! I’d like to close out this SUPER lengthy blog post with some resources I’ve found helpful along the way.
Budgeting Software + App
I’ve already mentioned the budgeting software (You Need a Budget, YNAB for short) that we have used since about 2017, but I wanted to give a little more detail about what we love about it most.
First of all, it is super easy to use, and if we’ve ever had any questions, their customer service is top notch and quick to respond. They even offer free workshops like ‘Managing Credit Cards and Eliminating Debt’ and ‘Using YNAB as a Couple’!
Secondly, all of our card transactions and investment accounts sync with YNAB. This makes it really simple to keep organized. I haven’t used a check register or any other balance sheet in over 10 years. That in itself is freeing. The app is great for when I’m out shopping and can quickly check a budget category, or if I need to manually enter a cash transaction.
Thirdly, YNAB has built in analytics and reports for all of my nerdy budget questions. I love seeing things like our average spending in a certain area at a glance, and this helps me to budget for future expenses in mere moments.
Finally, I love all of the updates and fun features that they are continually adding to make budgeting even more simple and fun! I know I’m weird.
If you are interested, YNAB offers a 34-day free trial so you can check it out and see if it’s a good fit.
Books
- You Need a Budget by Jesse Mecham, Founder and Creator of YNAB (audiobook | hoopla audio | hoopla e-book)
- The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money by Ron Lieber (audiobook | hoopla audio | hoopla e-book)
Podcasts
- Official YNAB YouTube Channel (fantastic content here!)