In this post we’re gonna take it back a few steps to make sure we’re all on the same page when it comes to talking about budgets.

The Basics

Essentially, a budget will look at your income and give a name to every penny. A budget will take every dollar you expect to receive and tell it where to go. Your money can go to an expense account, to pay off a debt or towards a savings goal. Here are common budget categories.

What a Budget is Not

A budget is not a strict or rigid path. It is not the law and it certainly is not a set of rules that you have to abide by.

Often times I find that people want their budget to tell them exactly what to do. But I believe that this is the number one reason people can’t or won’t stick to their budget. Because it’s zero fun to have to pull out a spreadsheet or budgeting app multiple times a day to see where you are and what you have left to spend.

Like, yuck.

So, What is a Budget?

Here’s the deal – a budget is your BEST GUESS at where you will spend your money.

That’s it. (I know, right – kinda loosy goosey, if you ask me).

But really, there is no way to know exactly what is going to come up for you. Which means that there is no way to know, precisely to the penny, how much money you are going to spend in every single facet of your life.

So, if that’s the case… why are people so hung up about budgeting?

I think the real issue with budgeting is that it makes you take a hard look at your money. It forces you to look at areas that you might be avoiding. Maybe because you think you’re bad with money, or maybe because you wish you had more money. Or maybe you just don’t want to face that fact that you have some mindset issues around money.

Whatever the reason you’ve been avoiding looking at your money, what you really need to do is just get started with a budget. It doesn’t have to be complicated. In fact you can create a budget in less than an 30 minutes with the “BUDGETING 101” Starter Kit.

Financial Goals

Budgets can be used to get out of debt, build an emergency fund, or just plain ‘ole “get your spending under control”. But whatever your end goal is, remember that budgets are fluid, they are not written in stone. So give yourself some grace and do your best.

You may be wondering: What is an emergency fund and Why do I need one?

Read on because I’m going to address the Who, What, Where, When, Why and (most importantly) the How of an Emergency Fund.

WHO needs an emergency fund?

You do. Seriously. If you are a person who has income and expenses, you need an emergency fund.

WHAT is an emergency fund?

An emergency fund is money that you have set aside to save for a rainy day and it is to be used only in the case of an emergency (not just because you want to go out to dinner more than your budget allows for this month).

WHERE should you keep an emergency fund?

There are different schools of thought here, but it is generally recommended to keep it in a savings account that is easily accessible. By that I mean one that is attached to a checking account that has a debit card. So if you have an immediate expense you can transfer the money and then spend it within minutes.

WHEN should you start an emergency fund?

Now. Don’t delay. This is the first step in building a solid foundation for your family’s finances.

WHY should you have an emergency fund?

Uh, because I told you to. Just kidding! Seriously, you should have an emergency fund because it will give you a HUGE sense of peace in your financial situation. It will allow you to make decisions from a feeling of abundance rather than scarcity.

HOW do I create an emergency fund?

There are a few components to the how.

Q: How much should I set aside?

If you are just starting out, I recommend setting aside $1,000 for a basic starter emergency fund. This is often enough money that it feels like you have a small safety net so you don’t have to pull out the credit card anytime an unexpected expense arises.

However, an emergency fund should ideally have 3x your monthly expenses saved up. These can be bare bones expenses, so you don’t need to include things like money you put into a retirement account or extra money that you are throwing at your debt snowball. But more like three months of essential expenses: rent (or mortgage), utilities, food, childcare, and some entertainment as well.

Q: How do I build an emergency fund?  

There are several ways you can go about building an emergency fund. Here are a few ideas to get you started:

• Sell off Assets – Do you have a collection of something just sitting around that you don’t use or that could be pared down? When my husband and I first built our emergency fund we sold off some things that were no longer serving us.
  
  I sold off my entire Barbie collection that was started for me as a kid, most of it really had no value and I certainly didn’t look at it, it was just a bunch of Barbies in boxes being hauled from basement to basement.
  
  My husband sold off part of his record collection that he didn’t listen to. We still have a ton of records, we love them, but we sold off ones that were of high value to others, but not to us.

• Start a Side Gig – Consider what skills you have that could be turned into a side hustle. Don’t think of this as starting a new business venture, but rather something that you could do for a short term to just build up some extra money. For example, do you have a skill or hobby that you could turn into short term income? Maybe doing yard work, selling a craft or babysitting? Or maybe you could pick up a little side job like being a virtual assistant

• Use a windfall – right now is tax season. Many families are getting tax returns and although it is tempting to spend that return on something fun and lavish, consider setting some (or all) of it aside for your emergency fund. If you do have a large expense that you want to make, you will now be in a position to use your monthly budget to work towards that large purchase.
  
  Also, here in the United States, many families are about to get a decent sized stimulus check. This money is designed to be used for families to continue spending so that our economy can keep moving forward, but it’s also a great opportunity to take $1,000 from that check and set it aside as an emergency fund.  

However you decide to build your emergency fund, throw everything at it and be RELENTLESS until it’s at least $1,000. Then later once you feel like you have a solid budget in place using the Abundant Money Method, you can include three months of savings into your budget as your ONE THING line item, and watch the magic happen.

You’ve got this, mama!

If you’d like to learn more about the Abundant Money Method that we use inside Financial Confidence Bootcamp, I invite you to click here to find out more.

Last week, someone in our state (about an hour away) tested positive for coronavirus. Then in Washington, someone died, then another person… then more.
We’re in Oregon, we have a handful of confirmed cases here and a bunch to the north and south of us.
The virus is most definitely spreading.

While I certainly don’t want to get sick (who does). I realize that death is not likely for me, or any of my immediate family members, for that matter.

However,
Schools are getting cancelled (maybe in a town near you).
Large gatherings are being cancelled.
People are calling in sick to work.

I think the potential is there for things to go sideways. As we’ve seen in China, large companies are unable to deliver goods because so many employees are suddenly out sick.

So, my husband and I thought long and hard about how to proceed. Were we overreacting for stocking up on groceries/personal supplies for potential coronavirus quarantine? We decided the answer was no.

If you are like me, you don’t grocery shop for groceries for more than one week at a time. Yes, we have staples that we buy in large quantities, that we know we will consume within the next couple months, but I don’t normally stock up on enough groceries to feed us for more than roughly 7-10 days. In fact, you can get my weekly grocery list planner here.

Our grocery budget is $700/month, we typically spend $100 – $165 each week, just depending on what we need to stock up on.

But this month? We have spent $412 by the first DAY of the month.

We decided that we wanted to stock up on enough groceries in case we couldn’t get to the store for 3 weeks.

Why three weeks and not two or four? Honestly, it just felt like the right amount, there was no real reason behind it.

So how did we do it?

We were strategic.

I sat down and loosely planned out our menu. This is similar to my normal Sunday morning routine (where I plan out the menu for the week), but this time, was a little different because I was specifically planning out meals that required little to no FRESH ingredients. I didn’t do a day-to-day plan of what we would be eating for three weeks. Instead I listed out 7 meals that included frozen veggies, or just plain-old shelf stable items.

• 8-Minute Pantry Dal
• Lo Mein
• Split Pea Soup – from the book The Way of the Happy Woman
• Mung Bean Kitchari – also from The Way of the Happy Woman
• Pumpkin Pasta
• Red Pepper Pasta
• Red Lentil Soup (I leave out some of the spice on this one

Then I listed out the ingredients we would need to stock up on to make those items.

The grocery list included things like: canned beans (for some reason I haven’t gotten into the habit of soaking my beans ahead of time), lentils, rice, vegetable bouillion, noodles, tofu, frozen veggies, dried berries, frozen fruits, cereal, boxed plant-based milk, coffee, beer, wine, etc.

Then we hit Costco after work on Friday (thank goodness because is sounds like the weekend was insanity) and Winco/Fred Meyer on Saturday.

But the reason I’m writing all of this to you is not because I’m a coronavirus expert. I am not giving you advice on what to do about the coronavirus. But should you decide to stock up on some groceries, know that it IS going to affect your monthly grocery budget.

Spending all of this grocery money up front is not normal for us. We both had to do a gut check several times over the weekend. But we made our decision and stuck with it.

The largest reason we decided to spend all that money to stock up on groceries is because we know that we aren’t wasting any money. Nothing that we bought in bulk will wind up getting thrown out.

I have planned this weeks worth of meals (which includes plenty of fresh vegetables, fruits, etc) just like normal. Then if everything is still operating as normal come this weekend, I’ll plan out a menu for next week. I expect the grocery list to be lighter because we won’t be getting many things besides fresh foods.

I expect that each week for the rest of this month we will be spending less than $100 on groceries. And since we have $288 left in our grocery budget cash envelope, we will mostly likely be able to make it the rest of the way through the month without having to transfer anything from another budget or from our savings account.

If you would like to get your food budget under control, join us in the next Back to the Kitchen Challenge.

I am all about having a budget that WORKS FOR YOU. A budget should not feel restricting. If it does, you are doing it wrong.

If you are interested in learning how to use my Abundant Money Method to create a budget that feels right for your family and can help you get out of debt, let me help you get your money on track.

Whether you’re ready to create a budget that you can stick to month after month, stop stressing about money, get in control of your spending or get out of debt, I am here to help you.

My husband and I have been married for 12 years, we have three kids, ages 8, 6 and 1, a home-based business (mine) and a full-time job (his). Life is very full and it’s not an understatement when I say that it can be several days before I remember to tell my husband things like “I saw water coming up the drain pipe in the basement”. Thank goodness for a shared calendar and texting so our house doesn’t float away!

But with little babes running all over the house, how could we make sure that we still connect in a meaningful way?

The answer was date night. We had been told time and time again that date night was a great way for us to make sure we found time to connect and prioritize each other. But it wasn’t actually that simple.

Date Night In

Date nights take commitment, planning, and money! We tried date nights about five years ago, but it just turned into us watching West Wing together and we didn’t actually get to emotionally connect. Plus, once we made it through all 7 seasons, we had a hard time finding something else to watch together, so date night kind of fizzled out.

Eventually I got really adamant about date night. I knew the importance of date night and I had heard it recommended on enough podcasts that I finally just decided we were going to make it happen on a weekly basis.

And so, being the budgeting mama that I am, I decided to give Date Night its very own line in our budget… and it worked!

Budget for Date Night

It was like we had found the golden egg of marriage. Adding date night to our budget has made a world of difference in our consistency with dating each other. Date night never really stuck until I actually took the time to prioritize it and put it in the budget. There was a period of time when we only stayed at home together for date night because we didn’t feel like we could afford to spend the money on a babysitter and going out together. But now, by actually working it into our budget, we know that we have the funds set aside to cover the expense of a meal and a babysitter!

Do we go out for a nice dinner every week? No. But we do set aside money so that we can go on 1–2 dates each month and then spend the other two dates at home snuggled up with a movie… and some cookies!

Date Night Ideas for Married Couples

Here are a few of our favorite date night ideas that we enjoy (besides just going out to dinner or staying home to watch a movie – but we definitely do those too!):

Going Out to Breakfast

Date night doesn’t have to be at night! If your kids are school-aged, you can even skip the babysitter! We discovered this one morning after getting some work done on our car. The kids were in school and on a whim we went out to a late breakfast. We had SUCH a good time! It was a really fun way to switch up date night.

Playing Legos

Yes, for real. Legos are super fun. It’s actually something we really enjoy doing together. Now when I say “playing” I really mean “building”, we’re not actually pretending anything with the legos. But it’s a wonderful way to get creative and enjoy each others company. I like to build practical things that we can use in our house. Like cool-looking box for our keys that sits by the back door. But build whatever you feel like! Have fun!!

Playing Games at a Local Geek Lounge

Our town has a place with a huge library of fun board games that you can go and play. It’s a great way to try out games without having to commit to buying them. They also have snacks and drinks, so you can enjoy a glass of wine and some cookies (did I mention I like cookies?!).

Window Shopping at Home Depot

We just bought our house last year, so we spend a lot of time at Home Depot, but it’s usually with our children. Getting to go wander around a home improvement store without whining children and daydream with my husband is my idea of a sexy date night.

It turns out my mom’s advice made perfect sense. And I am always grateful that we have money waiting for us when date night rolls around.

By evaluating your values and priorities, you can decide which areas of your life you want to invest money into and where you can cut back on. Once we started to prioritize our relationship, we were able to give ourselves the freedom to add date night to our budget.

I often hear people say, “I can’t afford that.” But what they’re really saying is, “I don’t want to prioritize that.” If you are ready to prioritize your marriage, put that line item in your budget, mama. If you need help getting started with a budget, I’ve put together a free starter kit for you here.

Deciding what you do and don’t need for baby will be helpful in determining what to buy and ask for as baby shower gifts. Remember that you don’t have to get ALL THE BABY THINGS! Ask around, not every baby likes the same things. My first baby LOVED the swing, second baby, not so much. And because of that, let’s look at some ways you can find things at an affordable price so you’re not out $60 when all baby does is scream when you put her in that fancy shmancy swing.

So let go of what you think you need for bring up baby and let’s explore some alternate ideas:

CONSIGNMENT

Here’s the thing about babies – they go through everything so fast! The upside to that is that when you do decide to spend money on quality items, you can turn around and sell them. An easy way to do this is to drop them off at your local consignment store. The credit you get can then be used to buy MORE baby stuff – it never ends. For example, we bought a Bumbo baby seat from a consignment store. It’s a very useful chair babies can sit in before they can actually sit up on their own. Now that Rose is sitting up all by herself, I’m going to take the Bumbo back to the consignment store because it’s in exactly the same condition it was when we purchased it.

CLOTH DIAPERS

Cloth diapering has a laundry list of benefits. Oh yeah, and there’s also a lot of laundry involved too. Cloth diapering has many benefits. It will save you a bunch of skrilla, it’s WAY better for the environment, AND if you have more than one kiddo, your diaper expense will be virtually non-existent because they will definitely last through multiple children. The cheapest way to go is pre-folds (which is like a big rectangle of fabric that you fold into thirds and put inside a diaper cover). You could also get pocket diapers, which cost a little more, but can be prepared ahead of time and therefore much quicker and easier to use during a diaper change.

HAND-ME-DOWNS!

Whether you have older kids or not, hand-me-downs are a huge blessing for parents. Saving clothes from one child to the next is always an option, but be open to receiving clothes from friends as well. We often get bags and bags of clothing from other parents who have children a little older than ours. And passing on the clothes is a great way to give back once your child has outgrown the clothing.

Basically you will need to get some gear for your baby, but you don’t have to get EVERYTHING under the sun.  I’ve put together a FREE handy checklist that you can use to decide what you want to get for your baby.  You’ll find the link to download it at the end of this post. 

OK, if you haven’t figured it out by now, it’s not the STUFF that costs a lot with babies. So why do people always talk about how expensive babies and kids are? IT’S. THE. CHILDCARE.

Childcare, Nanny, Day Care, Preschool, whatever you want to call it, it’s paying a living wage to another person in exchange for them watching your kiddo, and that is actually expensive. When we had our first baby, I had a fairly low-paying job in my industry. I went on maternity leave (like ya do) and then after 6 weeks, my partially-paid leave was over and it was time for me to go back to work. Yes, here in the US we still do not value maternity leave enough to extend it to a reasonable amount of time, but that’s another topic. I was fortunate enough to take baby to work with me for about 4 weeks, but soon it was time to leave baby at home and go back full-time. As we looked at the cost of childcare, we realized that it was going to be a very large percent of my take-home pay! I would essentially be working, pumping breastmilk (ugh) and leaving my brand new baby all day in order to pay for someone else to watch her and have a few hundred bucks left over at the end of the month.
We tried it for one month and decided it wasn’t worth it. So we cut out the middle-woman. I went back to waiting tables a few nights a week so my husband could watch baby while I worked and I could be with her during the day. It made sense for us financially.

I’m telling you this story, dear mama, so that you can see that having a baby doesn’t look the same for every family. Some parents go back to work right away and pay a person to lovingly care for their child, but that’s not a luxury everyone can afford, so sometimes you need to get creative. It doesn’t mean that you shouldn’t have kids because you can’t afford them, but it might mean that plans will need to be flexible as your priorities shift a little in parenthood.

OK, having said all of that about childcare. There is actually a great way to save on childcare, it just doesn’t work for every family.

SWAP CHILD CARE

This is my single most favorite way to save with kids. Swap care!!! Find a good friend or two and trade child care for each other. It’s a win-win. If you are already watching one baby, the second one can usually slide right in. Plus you already have so much of the gear needed to care for baby. If you don’t already have a friend, it’s still entirely possible to do this. Find a mom’s group in your area and bring up the topic. Better yet, find a pregnancy group (maybe it’s on social media, or maybe you bring it up at a birthing class) but I guarantee you there are other moms or moms-to-be who are looking for an affordable way to have someone care for their baby.

So… what IS your budget?

Hmmm, how to figure that out? We now know that although babies don’t have to break the bank, they will inevitably increase your monthly expenses. Trust me, they start out eating very little, but little by little you’ll realize your grocery budget doesn’t seem to stretch as far every month!
The other thing to consider when planning your budget is how your income might change while on maternity leave. Maybe you’re all set with a couple months of maternity leave, but it could also be that you’re self-employed (like me) and will need to really plan ahead to make sure you have the income to make it through the newborn baby snuggle-sesh!

Dear mama, if you’re ready to have a baby and trying to figure out how much things will cost I’ve put together a reference sheet and checklist that will help you figure out how you want to ask for as a gift and what you want to purchase used (or new).  I’m sure it will help you as you plan for your new baby!

I hate fees.  There, I said it.

EVERYONE pays bills each month and there is NO good reason you should be paying more for a service than what is originally owed.

But you do just that when you lose track of what’s been paid and what needs to be paid.  How many times have you opened up your cell-phone bill only to discover it’s TWICE what you expected AND there’s a $35 late fee tacked on? Now not only are you now faced with calling the company to get the fee removed (pro-tip: always do this, it won’t always be successful, but it’s worth the phone call to ask) but now your monthly budget is all out of whack because you now need to pay twice as much for your phone bill.

It’s essential to track your bills each month.  One way to ensure this happens is to automate your bill payments.  However, I caution you against this.  Automatic bill pay distances you from your money and the key to reaching your financial goals is becoming intimate with your money.  Any bill that fluctuates (think utilities here) is one that you need to keep a close eye on.  You need to know if your power bill is $30 more than last month or why the heck your cell phone bill is $15 more this month than it was last month.

I think you need to get intimate with your money.  Oh la la! In order to do that without being consumed by your finances, you need to systemize your bill payments.  You can do this by making a list of the bills you pay every month (and even ones that you pay quarterly or annually), next to the bill, put the due date, then put the amount due and finally leave a spot to check off once you’ve paid them.

However, I have taken the liberty of creating a template for you!  If you want to skip the list making, you can download the spreadsheet below.  It’s formatted to use as a digital spreadsheet, or it can be printed out to use with pen and paper, whatever works best for you!

So, no more late fees, K?  Commit today to tracking your bills!

A little story about how our family got our money in order.

Not long ago, our family was in financial disarray.  We seemed to make enough money each month to pay the bills and buy the groceries, but whether or not we could afford to go out to dinner or buy another Lego set was something I just didn’t know the answer to.  If we got to the end of the month and didn’t have enough cash to get to the next payday, we would just put things onto the credit card, half-reassuring ourselves by saying it was OK because we’d do better next month.

This was our life for several years until we finally decided it wasn’t how we wanted to live.  Eventually my partner and I sat down and had a very difficult conversation about our finances.

We realized that we needed a budget.

It wasn’t easy but we made a plan to get our money on track.

Here are the four changes we made to get our finances on track

1. SHIFT SPENDING HABITS

We had to get control of our spending. I knew I couldn’t continue pay for anything and everything just to keep up with the Joneses. It was time for me to start saying no to some purchases, but which ones?  Figuring out where we could afford to spend and where we needed to cut back meant that it was time for us to get a budget in place

We knew we needed a budget, but actually creating a budget sounded like the end of the world to my skeptical hubby.  He thought he would never be able to buy anything ever again.  But surprisingly he’s been able to learn how to say no to small, more frivolous items so that he can say yes to larger purchases that he’s saved up for. And now he’s WAY better at saving up for stuff than I am… who knew?!

2. TRACK OUR MONTHLY BILLS

In order to create a budget we needed to know how much we were spending. I created this spreadsheet (that we still use today) to track our monthly bills. This was a huge step for us. Every month at the beginning of the month, I sat down at the computer and pulled up the spreadsheet and checked off each bill as I paid them. Knowing this was done allowed me to know how much money was left over for the rest of the budget.

3. FACE OUR DEBT

We used to have an astronomical amount of debt.  Student loans, a car loan, credit cards and more credit cards.  We paid more in student loan debt each month than we did on our rent.  We felt like victims and begrudgingly paid the minimums due each month on all of our debt, throwing extra money at them when we felt like we could afford it.

By looking at each individual loan I was able to see how long each debt would take to pay off.  I’m not gonna lie, it was sickening to think about.  But rather than look at that debt and feel burdened, I felt empowered. It was comforting to actually have an end date.  It was a light at the end of a very, very, VERY long tunnel.

4. PLAN FOR THE FUTURE

Deciding to set money aside for large expenses was clutch in our financial makeover.  Rather than wondering how we would afford big-ticket items, we finally had money in the bank when it came time to pay for things like our semi-annual car insurance, Christmas gifts, or the surprise need for a down payment on the minivan when we grew from a family of four to five.

How We’re Doing Today

We are still on our journey to become debt free and life has definitely thrown us a few surprises over the past several years (another baby when we thought we were done AND our landlord selling the house we live in when the rental market in our little town is insane – Hello Homeownership a few years earlier than we anticipated!). By implementing habits from the three changes listed above, we’ve been able to steer the course and keep our heads above water, financially, as we lean into the stage of life our family is in right now, all whilst learning about home ownership of our almost 100 year old craftsman abode that needs a heckuvalot of TLC.

If you’re reading this and thinking, I can totally relate! I want to get out of debt! I need a budget!

…I got you.

I have a free web class, Netflix style, that will walk you through How to Get out of Debt WITHOUT Feeling like a Tightwad. 

What is up with this?!  Why are we spending money that we don’t even have?

As I’m sure you can imagine, I have a few theories about this.

OBLIGATION

How many times have you said yes to something out of a feeling of obligation even though you knew you didn’t have the money or the time (or both!) for the commitment?  [Sheepishly raising my hand over here].  I bet you can also think of a time you said yes to going out to lunch with a work colleague even though your Dining Out budget is almost maxed out for the month.  Or worse, when you bought something from someone simply because we want them to think we can afford it.  Often we choose to say yes to spending opportunities because we feel obliged.  We feel like we owe it to other people to spend money that we worked too hard to obtain!

KEEPING UP WITH THE JONESES (FOMO)

Maybe your best friend got some new kicks and your booties from last year are looking a little dated.  Or maybe their new iPhone can do slow-mo and you’re over here waiting half a second while your messages app loads.  Maybe it’s not even tangible.  Your besties are going out on Saturday, but you were planning on staying in – but now you’re wondering if you should go blow a bunch of money this weekend too.  You’ve signed your child up for soccer because her best friend is also signed up for the same class, even though your kiddo is already booked with other weekly commitments and doesn’t really even care that much about soccer.

We’re all guilty of this.   It sure would be easier if you had the latest and greatest shoes/phone/car/whathaveyou, but comparing yourself to others is very likely to make you feel inadequate.  Not everyone has everything.  But it’s easy to start to feel like that when you start to compare your spending to what you think others are spending.

MINDLESS SHOPPING

So many of us are buying, buying, buying without giving it a second thought.

We see several colleagues with new coffee mugs and so the next time we’re on amazon looking for new bath towels, we browse on over to the coffee mugs and plop one in the cart and keep rollin’ along without giving it a second thought.

We also use mindless shopping as a way to feel better.  Had a crappy day at work?  Go buy a new sweater you don’t need at Target.  In fact, go buy a new sweater, a sticky notepad from the dollar bin and two new throw pillows for the couch, that’s sure to make you feel better… for at least five minutes.

Be Weird – GET OUT OF DEBT!

It’s time to get honest with yourself. We’ve all felt pressure from society to conform to the norm, but if the norm is $38,000 of debt, I’d say it’s definitely time to get real about deviating.

You have NO IDEA how much debt the Joneses actually have.  That shiny new minivan in their driveway sure looks fancy shmancy, but they might be up all night thanks to the stress of their new $500/month car payment.

You’re neighbor, whose life you’re coveting might actually be drowning in debt – don’t be like them.

Companies are always going to make new and improved products.  A new iWhatever is going to continue to come out every year or so.  But that doesn’t mean that getting one for the sake of upgrading is more important than your long term budget plans.  Don’t give in to the temptation.  Wouldn’t you rather enjoy a high quality electronic that you can pay cash for in five years rather than an upgrade tomorrow that you can’t afford?

Stop Comparing

Sticking to a budget is REAL…  as in, REAL HARD.  But pitying yourself because you think you have it harder than someone else?  That won’t get you anywhere.  I saw an old friend of mine from college had cut her children’s hair.  What?  That can’t be. My kids have been getting their hair trimmed exclusively at Mom Salon their entire lives, but I thought it was because I was depriving them from a fancy schmancy $20 hair cut. I thought it was because I was depriving them of the proper haircut and EVERYONE else gets their hair cut at a salon.

I had real mom guilt from continuing to cut my kids’ hair.  A tiny seed had planted itself in the back of my mind telling me that if I was a better mom, I would take my kids to a professional salon

So today, dear reader, I want you to give yourself permission to spend mindfully… without the guilt.  No more comparing yourself to your neighbor.  And don’t even think about paying for something because you think someone else is expecting you to do so.  Your money is yours and YOU and you alone get to decide how you are going to spend it.

Groceries is an area of budgeting that moms can get really carried away with.  We want to provide nourishing food to our families and so we often let that justify spending excessive amounts on our grocery bills.  But spending more doesn’t mean spending wisely.

1. MEAL PLAN

I know this isn’t the first time you’ve heard this, but that’s because it’s a tried and true method that can help you scale back your spending on groceries.  I’ve made it even easier for you with this free grocery and menu planner. So if you aren’t already meal-planning, what are you waiting for?

By setting aside time to plan out meals, you are giving yourself time to come up with budget-friendly, delicious meals.  I like to plan 5-6 dinners per week because we inevitably have a night or two that we wind up eating out or going to a friend’s or neighbor’s house for dinner (Taco Tuesday is a big deal in our ‘hood).  I also like to plan dinners so there’s enough left over for lunch the next day for both myself and my husband.  Adding that little condition to the meals that I plan allows us to save big-time on lunches.

Another way to meal plan is by having the same meals week after week.  This is basically meal-planning Level II.  We do this for breakfasts and it works beautifully.  I actually started doing this because I was tired of making different breakfasts for everyone (short-order cook mom), so I made a list of five breakfasts that we eat most often, assigned each one to a weekday and voila!  Do you know how long it takes me to plan breakfasts each week?  Zero seconds.  It’s amazing.

2. CUT OUT EXPENSIVE ITEMS

Hear me out here.  This is a list of some things you should consider cutting from your family’s menu.

Alcohol 

Americans spend an average of 1% of their budget on alcohol.  That’s a lot of money!  This is a total luxury item and something that should be eliminated if you are serious about reaching your financials goals.  We cut out alcohol for one month last year and definitely saw a change in our grocery (and dining out) budget.

Meat

When planning your weekly menu, find meals that are vegetarian or vegan.  I’m not talking about just Meatless Mondays, I’m talking NO MEAT.  Meat is super expensive (if not, it’s probably because the meat is pumped full of antibiotics and comes from animals who barely saw the light of day).  The reason I hear most often for eating meat is to get enough protein, but there are still plenty of ways to get enough protein without eating meat: beans, lentils, quinoa, tofu, tempeh, seitan, not to mention dairy!

Organic

Go conventional on some items.  We have decided to buy conventional rather than organic in some areas.  I used to buy only organic for all of our groceries and even though I felt really good about the food I was serving to my family, our grocery bill was outrageous for our income level.  Now we buy organic and local on somethings (usually produce), but about half of our groceries are conventional.  I look at this as a temporary sacrifice in our lives.  In order to reach the financial goals we have as a family, this is an area we have decided to cut back until we reach those goals.

3. CASH BUDGET

This is such a good tip.  We have been using a cash budget for groceries for exactly a year now and it has helped SO MUCH!  Each week when my husband does the grocery shopping, he grabs the Grocery Cash envelope and heads to the store.  Spending cash allows us to see the money leave our hands.  It also allows us to see how much we have left for the month.  If you get to the second half of the month and realize you have less than half of your cash left, it’s an opportunity to course correct.  Choose more menu items that are budget friendly and get back on track for the month!

I strongly advocate using a cash budget for any budget category where you tend to overspend.

4. GIVE THE LIST TO SOMEONE ELSE

Hands down, my favorite way to save on our Grocery Budget.

If you are anything like me, you can make a meal plan, make a list, hit the store with the best of intentions, then buy every on the list… plus 15 “other” items that you grabbed impulsively.  I am such a lost cause in a store.  It’s one of the reasons I avoid shopping… for real, I have no will power!

About a year ago, my husband and I split up our household duties.  I wound up with cooking meals and meal planning, but he got the grocery shopping chore!  (Which he loves, btw).  So each week, I plan our meals, make the grocery list and then give the list to him. (Hint: there is a free grocery list planner at the end of this post).  Not only does this help me be accountable to him by forcing me to plan out our weekly menu, but he in turn also feels accountable to me to trust my list and sticks to the list at the store.

I’m not going to lie, in the beginning, this was a challenge.   Having to think through the entire week and make sure the list complete was hard!  And sometimes I just had to make-do without a certain ingredient for dinner or get creative with afternoon snacks because I forgot to think about them when I made the list.

Another challenge we face when making this change was that my husband had been very hands-off in the kitchen and grocery shopping, so he wasn’t always sure where to find something in the store, or what an item even was!  I also had to learn to include quantities and descriptions for clarity.  Jotting down a list for yourself is very different from making a list for someone else.  For example: I know what it means when I write coconut milk on the list, but he doesn’t!  Do I want canned or drinking milk?  How many do I want?  He now always reviews the list before leaving and asks me if he has questions.

So there was a learning curve on both of our parts, for sure.  But after a couple weeks of learning and laughing at our errors, the passing of the list now goes fairly smoothly.  So give it a try and keep trying if you flub at first, it’s worth it.

5.  DON’T

Um, what?

Yup you read that right.  Don’t reduce your Grocery Budget – what the heck, right?

In my experience, I have seen people often shocked when they review their expenses for several months and see how much they are spending on food.  While groceries can contribute to this a lot, usually the worst culprit is Dining Out.

Dining Out is anytime that you purchase food that’s not at a grocery store.  So restaurants, coffee shops, etc.  Dining Out food is exponentially more expensive than Grocery food.  You are paying for someone else to buy, store, prepare and serve food to you.  Plus they have to clean up after you’re done eating the food.  Dining Out is a major luxury item.

By preparing more food at home, you can cut your Dining Out spending by a lot while only increasing your Grocery spending by a little.

See how that works?

Spending a Little – Spending a Lot = Saving (I love math)

For example, suppose you review your spending habits and discover you are spending $600/month on Groceries and $500/month on Dining Out.  Food is costing you a total of $1,100/month!  By preparing more food/drinks at home you can decrease your Dining Out spending by $200 and only increase your Grocery spending by $40, therefore saving $160!

In fact, if you implement other tips in this article, I bet your Grocery Budget could stay the same or even go down while your Dining Out budget decreases as well.

Indeed, there are so many ways you can reduce your Grocery Budget.  Take one or all of these five tips and see how you can reduce your family’s spending today!

Want some help?

Join the next 7-day Back to the Kitchen Challenge to jump start your booty in the kitchen!

Budget Categories 

It’s important to know where your money is going, but having too many budget categories can be counter-productive.  Not everyone’s budget categories will be the same, but here are some basic guidelines:

Budget Percentages

So now you’re thinking to yourself, “OK, great!  I’ve got my budget categories figured out, but how much should I put in each category?”  There’s no hard and fast rule to answer this question.  Every family is unique and what might be important to your family will not necessarily be important to someone else’s family and that’s going to be reflected in your budget.

There are two ways to go about setting budget amounts. 

OPTION 1 (the “meh” option):
Use generic budget categories and percentages

The percentages below are based on your net income (take-home pay after taxes).  They are basic guidelines you can use to get started if you want to take the quick and easy route and/or have no historical data to go from.

• Rent/Mortgage (20%-30%)
• Utilities (5%-10%)
• Groceries (10% – 15%)
• Dining Out (3% – 8%)
• Entertainment (3% – 8%)
• Childcare (10% – 20%)
• Kid’s Activities (5%)
• Household (5%)
• Insurance (auto, health, & rent/mortgage) (5% – 15%)
• Personal Expenses (5%)
• Gifts/Charitable Contributions (2% – 5%)
• Debt (credit card, student loans, auto loans, etc) (0% – 15%)
• Savings for Retirement (10% – 20%)
• Things you’ll save up for (vacation, holidays, car, etc) (this really depends on what you are specifically saving for)

This option is called generic for a reason. It does NOT take into account YOUR personal lifestlye. I do not recommend using generic budget categories and percentages.

OPTION 2 (the better option):  Create a budget based on your current spending habits

This will require a bit more work that option one, but I encourage you to take the time do go through it because it can be a real eye-opening experience as it will allow you to see where your money has been going.

1. The first step is to gather your historical spending data for the last three months.  If you are using a debit card for the majority of your spending, then you can most likely download this information in a .csv file from your bank.  But if you can’t download it from your bank, you will need to compile it by hand.  Grab your bank statements for the last three months and open up a spreadsheet on your computer.  You will then need to enter every transaction into the spreadsheet.  Break up the transactions into months so you can see your spending month-by-month.
2. Now that you have your historical data, your next step is to categorize every transaction from the last three months into one of the budget categories.  This categorizing can be confusing, but hang in there, mama!  It doesn’t have to be perfect.   I really encourage you to try to limit yourself to using one of the 14 categories suggested above.  This is because the more categories you have, the harder your budget is going to be to maintain.
3. Now it’s time to total up your budget by month.  If you are a spreadsheet whiz, you can use a pivot table to do this, otherwise, just go through the list and total up each category.
4. When you have your monthly totals for each category, it’s now time to find the average for each category from the last three months.

You’re done!  Armed with the average for each budget category, you can now see how much your family has been spending and where all your hard-earned money has been going!

Once you have your historical data you can now tweak it to create a budget.  Like I said before, this can be a real eye-opening experience.  So many of us are overspending, but we aren’t sure what to do about it.  But as the cliche goes, “Knowledge is Power”.  Don’t beat yourself up over past spending habits, there is literally NOTHING you can do about them now.  But what you CAN do now is decide you are ready for a change.  Now that you can see where your money is going, I encourage you to share these figures with your partner (if that applies to you) and decide how you’d both like to change your spending going forward.

When creating your budget there are a couple things to keep in mind:

1. Budget for every dollar.  You are no longer a victim of your spending!  You are now going to tell your money what to do.  Any dollar that doesn’t get told where to go will mysteriously slip away into the night.
2. Set aside time at the beginning of each month to reflect on last month’s budget and create a budget for the coming month.  I’m not kidding, literally schedule it on your calendar.  Tell your partner and carve out time to go over the numbers.
3. Remember that a budget is a BEST GUESS at where you money is going to go.  Once you’ve created your budget for the month, it doesn’t need to change.  You might wind up overspending in one area.  That’s OK!  Was this month an anomaly because you forgot to budget for an event that occurred?  Or did you just budget too low and need to bump up that category.  Or maybe it’s just an area that you are working on.

Overspending

It happens. If you overspent in a category and there’s no particular reason why other than it’s a weakness for you or your family, you could make it a goal next month to cut back in that area.  Leave notes for yourself in locations where you’ll see them when you are about to spend from that category.  This might be in your wallet, on your phone, on your computer or on a kitchen cupboard door.

A common mistake that I see people make with their budgeting is assuming that it has to be strict and rigid and that once the budget is set, you can’t deviate from it. But the truth is: budgets are just a plan. They aren’t hard and fast rules. A budget is just a guideline for what you think you’ll be spending (and making). I have a FREE 1-hr training that explains The Three Mistakes You’re Making with Your Budget (hint: this is one of them). Make sure you head over here to watch the free training – you aren’t alone! This is a common misconception!

If you find that your family is consistently overspending in a certain category, then feel free to dive into that category a bit (Yes, I’m giving you permission to create more categories… temporarily).  For example: Are you consistently going over budget on groceries?  Try breaking out your grocery bill into sub-categories like alcohol, vitamins & supplements, treats, body care, etc.  If the idea of sitting down with your grocery receipt to break out the expenses sounds exhausting, remember that you won’t have to do it forever, try it for one to three months, that should be long enough to show you where you are possibly overspending.

Another way to combat overspending in one category is, if you think you know what the culprit might be, try cutting it out for a period of time.  Last year our family’s grocery budget was getting out of hand so my husband and I decided to cut out alcohol for a month in January.  Not only was it beneficial for our livers, but we were also able to see the effect in our grocery budget.  Seeing that number go down for the month was empowering!

Good luck!  As always, I’m rooting for you!