With a new addition to the family, finding ways to save money became an even bigger priority, especially with a single income (for now). We have tried and failed to hold to a budget many many times. So as we began to really buckle down on spending, a sense of worry at sticking with a plan was inevitable.
Did you know that money is considered one of the top stressors for most people in their lives? I know it is for me! That’s why I decided to share my budgeting journey with you and provide a way for people who are less savvy with spreadsheets (and who can’t afford pricey tracking software) an opportunity to build a budget today. When I get to the end of the month and can clearly look at where our money has gone, it is so liberating and freeing to know exactly what we need to change next month.
While not everyone has the time or energy to get as detailed as I want to be, I really need to dig deep into the details because we tend to do tons of tiny transactions that add up soooooo fast! And while my husband makes a good income, the Seattle area is amazingly expensive (meaning he could essentially be making half as much in many other areas to have the same lifestyle), and we just purchased our first house (though outside of Seattle – this house would have been at least twice the price in the city).
My husband took a very active role in finding a method that may actually work this time around in the hopes of finally making positive changes in the way we both spend money. You’ll see our process and know what I mean. Of course he helped previously! But, it was going to take a lot of collaboration and work on both our parts to make it finally work long term.
To help my fellow parents, I have created a basic budget spreadsheet you can use in your own home. If you sign up for the Hive Newsletter, you can have access to the Hive Library of free resources, including a spreadsheet to track your monthly expenses and bills! Don’t worry about software – the spreadsheet is in Google Docs (Sheets) so all you need is a Google login.
The Goals Of Budgeting
The best thing about budgeting is the ability to see exactly where your money is going and how to make changes in your monthly expenses to actually put some money away for surprise expenses (like medical or car bills). Or, budgeting can show you how to slim down on some bills makes it possible to save up for something you want or need (like a house or…a new board game) or pay off debt faster. It also provides a way to respect the time and energy that goes into making money and using that money in a meaningful way.
What We Tried
In the past, we had tried the “wallet” method (where you have buckets of money by category) and we tracked every transaction in an app linked to both our phones. It was great for a month or two but became arduous to enter them every time money was spent, like a $2 charge for parking. And, if a transaction was missed, there was no real way to know. Tracking transactions stuttered and stopped.
We also tried using Quicken software that linked to an app and synced with our bank account to see real transactions we would categorize once cleared. But, the sync never worked really well and we found the budgeting feature was very clunky and not user friendly.
In addition, there were many Excel spreadsheets that we tried and failed to use on a regular basis. This was partially from losing focus and partially from lack of determination to find a structure that worked. So, what would work now?
Before we decided on something that would work, we needed to find out WHAT we needed to track.
What To Track
Not only did we want to track our monthly bills (especially those that vary in amount due, like power or water) but also define which bills were absolutely necessary vs unnecessary. By doing this, we could cut back on bills that we really didn’t need (like a subscription) or lower the payment on others (like a cell phone bill). Here are some main areas to track:
Bills that you HAVE TO pay each month that are non-negotiable. This doesn’t mean you are locked into a specific payment amount – you can negotiate a lower payment on your loans or reduce your home water use. But one way or another you are required to have these services. For example:
- Rent or Mortgage
- Car Payment
- Car Insurance
- Phone Service (cell and/or home)
- Credit Card(s)
- Loans (student loan or other non-mortgage loan)
- Medications (if applicable)
Bills you need to pay but are for services that you can possibly cancel. For example:
- Subscriptions (video streaming (e.g. Netflix), magazine, food services, etc)
- Cable (includes internet, though this feels more like a necessary bill this day and age)
This is the part that’s a little harder to track since they aren’t just a bill you get in the mail. These are any items you may buy or purchase on a monthly basis. For example (though the items below is a small snapshot into what we track):
- Pet Supplies
- Eating Out
- Car Maintenance (like an oil change)
- Eating Out
- Shopping (like cloths, household items (e.g. a new shower head), and anything else you purchase that doesn’t fit into another category)
- Yard Maintenance (if applicable)
- Medical Expenses (like an annual visit)
- Gifts and Holidays (birthdays, weddings, baby showers, and any other event)
What About Other Tracking?
While there are a lot of things like debt payoff amounts, investments and other types of tracking, I’m focusing on the month to month expenses only. In order to build a debt payoff plan or make additional investments (etc), you need to first tackle the little details and create a plan of action.
How We Track It All
Firstly, this is a LOT to track. But, we came up with a system that worked! Now that we had defined all our bills and expenses, here is what we did to set up our tracking spreadsheet:
- List all necessary bills with the expected amount due
- List all unnecessary bills with expected amount due
- List all expected expenses with an estimated amount spent on each in a month (you can either ballpark these numbers and alter after seeing your monthly totals later or go through your expenses from previous months)
- Create a monthly spreadsheet to track all charges in bank accounts and credit cards
- Take the monthly charges and track which category each charge belongs to (like a $50 grocery charge)
- Build a summary calculating category totals vs the estimated/budgeted amounts
Does this all seem overwhelming? Don’t worry – I’ve shared all this work with you! Just subscribe to the Hive Newsletter and get access to a budgeting spreadsheet (as well as any other freebies available) in the Hive Library. All you need to do is follow the instructions and input your numbers! So take a look and see if my budgeting system works for you and your family.
Save Your Receipts
If you make a purchase either in a store or online, save the receipt! Every weekend my husband and I sit down and enter all of our expenses into the spreadsheet (we export from our bank account and credit card and paste any transactions that cleared in the previous week). Then we take our receipts to help us categorize the expenses. One of the biggest hurdles for my husband and I was sitting down once a month to go through all our expenses – don’t wait until the end of the month! Not only is it easy to lose a receipt and/or forget what you purchased, but going through about 30 days worth of spending takes FOREVER! I highly suggest doing your budget entry weekly!
How To Use The Budget
Look at your numbers from each month:
- Is there a service you don’t need? Cancel it and use that money (even if it’s just $10!) to pay off more debt, add it to savings each month or save up for something you want or need!
- Can you reduce the expected amount due on bills by lowering your monthly payment on loans, changing your cell phone service, refinancing your car or remembering to take shorter showers? Just get creative!
- Are you greatly overspending based on your estimates? Either update your expected expenses/budget or find ways to reduce the amount you spend.
- Are you right on budget each month without trying to reduce your spending on expenses? Pat yourself on the back! Or you can try to find ways to reduce your spending to save more money.
I also have some resources I use to save money listed on my Resources page. Do you have other tools and services you use to save money? Share them in the comments below for others to try!
What To Do Next
Budgeting can be complicated and time consuming, but the benefits of knowing where your money goes and how to change your spending to create long term growth and stability for your family alleviates so much stress!
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