Tips and Tricks for Budgeting for a Family of 5

One of the main things I get asked about is how we budget for our family of five on a single income while trying to pay off student loans and living in one of the most expensive areas in the country, and this happens to be one of the things I love talking about the most!  I recently did an Instagram Live video all about it and thought I’d share the highlights here in written form in case anyone wants it in this format.  We’ve experimented around and have found that our current approach works great with our personalities and lifestyle, but it won’t be for everyone.  If anything, I’m here to give you ideas and hopefully give you encouragement in your own budgeting endeavors!  I know it can be hard and discouraging, but we have found some tips and tricks that have really made it a positive thing and have helped us feel confident in our financial situation (even while living in one of the top three most expensive areas in the country!!).  The first month we did this approach, we literally saved over $500, for example.  So let’s dive in!

First of all, let me clarify a few things: Number 1: I’m talking today mainly about grocery budgeting.  I’m not including things like monthly bills or medical expenses.  Those are all things we have budgeted already, and our grocery budget reflects those expenses already being taken care of.  Also, I will not be going into detail about how much money we budget for specific categories.  While that is not only personal, it is also not a very good reference point because our area is just simply more expensive than the average area and our budget reflects that.  What I will do is give you recourses to calculate your own budget that fits well with your specific situation and geographic location.  John and I have used different budget calculators to get an idea of the ball park we should budget in and we try to stick to the bottom end of that ball park, just to play it safe.  Here is a calculator widget that might help you, but there are also apps, websites, and probably facebook pages that could help you as you google search what a good grocery budgeting range would be for your situation.

 

Okay, now for the exciting part—OUR BUDGETING BREAKDOWN!!  Have you heard of the envelope system?  That’s basically all we do, but in plastic form!  First, let me explain my personality a little.  I hate big numbers.  I can’t comprehend them, they make me anxious, I get overwhelmed.  I don’t want to know the big numbers.  I thrive in a controlled environment where I only know the small numbers I’m dealing with in a short period of time.  Because of this, John has taken on the role of “banker” in our marriage, meaning he transfers the money onto the cards with apps that I choose not to have on my phone.  As much as he would prefer I be equally involved in managing all the money, I simply cannot do it without emotional repercussions and so this is how we’ve made it work for us. To be honest, I don’t even know how much John makes!  I prefer it that way.  John is very finance savvy and I trust his financial goals completely, so I just do what he says.  But if you are both equally involved in your family money management, simply decide how to divy up the responsibilities of governing the money transferring and you’ll be great.  
 
Now, back to biz.  Instead of envelopes, we use debit cards.  I have four debit cards–one each for gas money, household contributions, personal spending money for myself, and entertainment.  Like I said earlier, all the bills are already taken into account when we budget these numbers, and we have a completely different system for medical bills.  But as far as the debit cards go, here is how we manage the transferring of money onto each card:
 
GAS: We load this card with one tank’s worth of money as needed.  If I’m running low, I try to give John about a day’s notice to load the money, but sometimes it’s a more immediate need.
 
HOUSEHOLD: This is for groceries, new clothes for the kids, school supplies or fees, decor or anything that is contributing to the household. The way we manage this card has really made the difference, I believe.  Instead of doing a bi-monthly or even weekly transfer, we do a BI-WEEKLY transfer.  We do a big transfer of about 70% of the weekly budget on Thursday (our big shopping day) and then the rest on Monday.  This keeps grocery store visits down (which helps save major cheddar) but also allows us to pick up staples we run out of (MILK!!) before the week is over without anxiety.  This does NOT include staples like toilet paper, paper towels, diapers and wipes, which we have subscriptions for through Amazon (subscribe to as many things as you can and you will save lots of money there!).  Our weekly budget reflects those subscriptions already being paid for, they are not just extra expenses.
 
THE JESSI CARD: This is basically my allowance card.  John and I agreed on an amount of money I get each month just for me, and I decided I wanted about 70% of that allowance on the 1st and the rest on the 15th, just to divide it up so that there’s always a little something there for me to pull from.  I will say that I do use most of my personal money on things the kids need or projects I want to do around the house.  But of course I have a wish list I’m knocking off one by one, here and there, too.
 
ENTERTAINMENT: Full disclosure–this might as well be named the McDonalds card, because that’s where all the money goes to.  John transfers a small amount to this card each week for wiggle room as I try to entertain the kids.  Yes, that includes a lot of McMuffins, but we also use it for other affordable sources of entertainment.  This is really just the “breathing room” card.  And it helps a ton.
 
An there you have it!  At first I was going to include our approach to actually spending the grocery budget, but I’ll do a post solely dedicated to meal planning and link that HERE.  The two posts really do go together, I just don’t want either to get too long.  Email me any questions you have! Or even better, DM me through my Instagram, which can be found on my sidebar.  Some final thoughts–I can say with confidence that I used to be addicted to spending money.  With the help of my husband I have come SO FAR, but this system has been the real game-changer for me.  I’d like to think my spending habits have matured, but this system simply doesn’t allow me to fail.  Maybe that’s running away from my problem or not trying to overcome my weakness, but I like to think I am emotionally mature enough to know my limits and have courage to manage my weaknesses.  Honestly, if I can do this–ANYONE CAN DO THIS.  I’m happy to assist you as you establish your budgeting style, it will change your life!