An absolute necessity to managing your money is a budget. From the young couple that doesn’t have enough money to pay their electric bill, to the largest multi-million dollar company; everyone needs a budget. A sample budget is a budget from another family that you can look over to help you create your own budget. This isn’t something that is discussed often, even amongst friends, so it’s really hard to see specifics of how others spend their money.
Which is a shame, because seeing how other people spend their money is a huge help in deciding how to manage your own.
This sample budget is based on our current household budget. Everyone is at a different point in their financial journey; you may be well past us, or you may be behind us. Your budget may look different depending on where you are in your life. We already have our emergency savings account and a slush account established, so we don’t have a set amount going to savings monthly.
I have a fairly irregular income where some months are fantastic and some months are… not so much. We have a budgeted amount that goes towards debt repayment based on my absolute lowest expected income and then we apply everything else we make towards that.
One statement of caution though: if you’ve never budgeted before, don’t take my sample budget and say “That sounds good! We’ll do that!” The only way to truly reduce your spending is by determining the true total amount of what you spent last month, and then trying to make substitutions to lower that amount. Reducing your spending in a category usually requires you to learn a new skill or get used to a new routine for it to work.
For instance, if our grocery budget is lower than yours, and you see that we eat almost everything from home, you might say “Great idea! I’ll eat everything at home too!” But if you aren’t used to it, you end up spending money on groceries, and then your groceries go to waste by forgetting to defrost meat, forgetting to pack lunch, etc. Let this sample budget be an example, not a guide. If there’s something here you spend more on, then check the notes to see why our spending is in that area; maybe it’s something you can implement.
If you spend less in an area, let me know! We’ve been on our frugal journey for almost 6 years and every year we get better. We have a long way to go; there are always substitutions that can be made and we take a few at a time to work our way through them slowly. In our first year, we reduced our spending by over $23,000. We used the money saving workbook to carve out a path to spend less and less every year.
Our sample budget:
- Mortgage/home/rent: $1,825/month
Granted we live in an incredibly expensive area, but this one drives me nuts. We got a fantastic rate (by moving two days after Christmas!), but this needs to change. Reducing this to $1,600 is going to be my goal for 2016.
- Clothing: $10/month
It’s very likely that we under spend in this area. We’ve really cut back on our clothing options the last few years to put that money towards other goals. We buy all of our jeans and pants from the thrift store on 50% off days, and fill in occasionally with other things as we need them. Our kids all have friends a little older than them, so we get their clothes when they grow out of them. We pass their clothes on to friends when our kids grow out of them. We don’t regularly shop for clothes and good deals. When my husband says he really needs new work clothes, we check out of the promotions going on that weekend in all of the appropriate stores and grab everything from one store for the best price. So we spend several months (maybe even a year’s worth) of the clothing budget in one trip.
- Car payment or car fund: $120/month
We traded in our newer car that we had a loan on to get a 10 year old Chevrolet mini van for $5,000. It was such an awesome trade. We’ve had it for almost two years now, it came with a DVD player for the kids and is so cheap that we don’t need to stress out over scratches, or spills.
- Cell Phone: $91/month (Ting)
We average $34 for my bill and $57 for my husband, we both have iPhones on the TING network (it’s in independent cell phone company available everywhere that Sprint is and it’s amazing. I can’t recommend them enough.
- Debt repayment $580/month
We put $580/month into our debt repayment “snow ball” plan, and then any extra unplanned money that comes in.
- Savings:
We don’t currently contribute to savings (except our retirement accounts, which is done automatically and we don’t even think about), since we already have our emergency savings plan in place.
- Electric: $200/month
Varies, but averages out to $200/month. We live in too large a house for our needs that is a bear to cool. It’s on my list to tackle in 2016 by reducing our home size. Keep in mind when you see that number that we have natural gas to heat the house so most of that is just cooling costs in the summer.
- Fines/fees: $5/month
This is a catch all, that I can redistribute at the end of the year if we didn’t need it. I’m an obsessive reader and utilize the library heavily. Occasionally life happens and I bring a book back late, or my two year old throws a library book in the bathtub. This covers those costs. It could also get used if you were to get a parking ticket, pay a bill late, or have to pay a cancellation fee.
- Fuel: $120/month
Keep in mind that if we take a long trip, the fuel costs of that would go into vacation. Now that I work at home and Jon has a work car, our personal car rarely gets used. When it is used, it’s only a few miles for trips to see friends, grocery shopping and errands.
- Natural gas: $40/month
This averages about $40/month, with higher bills in the winter and very low bills in the summer. This is used to provide us hot water and heat our home.
- Gifts: $10/month
This is really an area that I need to tighten up on. I used to take a large calendar and plan for weddings, baby showers etc, as well as birthdays and each had an individual budget that led to a large yearly gift budget divided by $10. We plan to pay for our (frugal!) Christmas this year with Ibotta, (and we’ll likely have quite a bit over what we need for Christmas) but I really need to go back to organizing the gifts like I used too. We have a gift closet so that when we see an amazing price on something that we know someone will love, we can pick it up then and store it. Keep a list on your phone though as well, so you don’t forget about it and buy a second gift for that person later. Also, we’re a huge fan of giving experiences instead of gifts, so that helps keep the cost down some.
- Groceries: $480/ month
We use freezer cooking, salad in a jar, menu planning, cheap stir fry, pantry meals and easy slow cooker meals to keep our grocery spending low.
- Haircuts: $25/month
I choose styles that don’t require frequent maintenance, hubby gets his cut, but only every 6 weeks and goes when their on sale for $10 on Tuesdays at Fantastic Sams. I wait to get mine done until there is an amazing groupon deal that I can use. Jon cuts our sons hair using Wahl cutters (at 2, it’s not like anyone is judging him if it’s not perfect).
- Holidays: $0 (but $200 through rebates)
We have amazing family that jumped on board with the $10 Christmas, we don’t put specific money away for this this year because rebates from necessary spending through Ibotta will cover it.
- Personal money: $100/month
Divided evenly. We also occasionally grab extra from overtime or additional earnings.
- Life insurance: $60/month for both
Most of our life insurance is through work, this is just extra to make sure my sister (heaven forbid!) would have enough to raise our kids stress free if something happened to us.
- Medical bills: $0
We use this method so it doesn’t come out of our budget.
- HOA: $70/month
Sigh. Sometimes I hate the suburbs,
- Property taxes: $5/month
Thanks to our awesome beater car! The home property taxes are included in our mortgage.
- Stockroom: $70/month
This is changing thanks to “couponing”, we use this method and my new budgeted amount is $70 (includes diapers and wipes)
- Vehicle maintenance: $20/month
But I think I need to increase that to plan better for needed car repairs. We use this system to save major on car repairs.
- Vehicle insurance: $80/month
Through USAA.
- Internet (you may have cable): $90/month
We just have internet since we’re cable free. You can read about our cable free adventure here.
- Amazon Instant Video: At $8.25/month
Amazon Prime is a steal for movies and TV! It comes with free 2 day shipping from Amazon, free unlimited digital photo storage, free Prime Music (Which lets you listen to popular songs and create playlists for free), and access the kindle lending library for free. We pay for prime because it’s so cheap and has so many added benefits. Netflix and Hulu are also great options.
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- Water/sewage: $70/month
Which seems expensive to me… but momma needs her bubble baths.
- Home improvement: $10/month
We usually fit kitchen gadgets into the grocery budget and we have incredibly messy toddlers right now, My personal philosophy is that we can have nice things when they know enough not break them.
- Vacations: $25/month
Our vacations are usually limited to a week at the Jersey Shore when 60 members of my family take over a little mom and pop motel right on the beach. My very Italian family of insanely good cooks caters for everyone, (even homemade mozzarella!) so we only pay $100/person for food for the week. We’ve chosen to sacrifice larger vacations to make more progress on our goals.
All other additional income goes to debt repayment. We have the ability to make a lot of extra money through side hustles and overtime, so we make sure that we’re paying down debt with everything we have. It’s hard work; but it’s also incredibly rewarding to see the progress.
Total Monthly Spending: $4,040 or $48,480 in a year.
My goal is to reduce this by $7,260 in the next year by reducing groceries (through couponing and backwards meal planning), moving, our stockroom couponing, and paying off one debt (although I’m aiming conservatively here, my real goal is to get everything but the mortgage paid off this year).
That’s where our money goes every month. We’ve cut so much out of our spending, and we have so much further to go that if you don’t have a system it just gets overwhelming. We use the free Ultimate Money Saving workbook: 200 Ways to Reduce Your Spending, Increase Your Savings and Achieve Your Dreams to make progress on our spending every single year. It helps us stay focused without sacrificing the things that are important to us. We just tackle one thing at a time, and hold the rest constant.
Do you have a category that you spend less in? How do you do it?
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May I please ask why the sigh about the HOA fees? I just get frustrated when I hear this because it’s a contract you signed when you bought the house. It’s just like a mortgage, and people don’t sigh about paying that.
Just curious.
I think the reason people feel a little frustrated about HOAs is because you don’t live everyday thinking about what they provide. When I pay my electric bill I know I can turn on my lights, AC, or tv. Same thing for water, mortgage, clothes, cell phones etc. However when I pay my HOA fees the service they’re providing is a little less tangible.
That’s a great perspective Julie. I grew up in the country and I had never even heard of an HOA until a few years ago. Maybe it’s a control thing? I know they provide the trash service and access to a community pool, but I keep thinking that I could very likely pay less for the services they provide on my own. But your right that we bought the house, so it’s kind of silly to complain.
I can understand some frustration. Like where I live (which is also a choice based on where we work and the best schools in the vicinity) there are not a lot of stand alone homes. The area was really built up about 20 years ago so most of the homes available are in a subdivision. We don’t really have much choice about whether we have to pay HOA.
I have seen some Hoa’s that don’t really offer much for what you pay. I’ve seen others that have been poorly run and rapidly start raising fees (my old condo started at $250 when we bought it and within 3 years were up $425 because the management made poor decisions…that’s per MONTH). Then there are those that go on a power trip about what people can do to homes they own!
So yes you sign a contract, but sometimes the other side doesn’t live up to it or they don’t manage the money well and you are not in control.
That pretty much covers it. Ours hasn’t raised too much (only about $30 in 5 years), but we just had friends with a condo that raised theirs up to $500/mo. I think you can probably tell from my site, that I like to be very in control of my spending, so anytime I’m relying on someone else for those decisions, it drives me nuts. I didn’t actually purchase the house, I married into it. But he’s well worth the HOA fees so, I’ll call it a win. 🙂
I’m so excited to hear that you use Ting! My husband and I have been using Ting for over a year and pay about 75/mo total for our phone. Most people we know haven’t heard of it. We also bought our iphones used- one from Glide and one from a friend.
Thanks for the helpful budget tips! I am continually trying to tweak our budget since my income went away as a SAHM and your BLOG is encouraging.
One additional line item we have in our budget is Giving. The goal is to give 11% of our net income ($346). We try to support ministries and people who have less.
I love Ting! I wish I had known about it years ago. Actually, I did know about it years ago but thought there was no way that you could get the same service by paying that little. And what an inspiring goal! I love that!
Thanks for bearing your soul, err checkbook, for the world to see. Our income is similar to yours one area I saw that we spend a lot less in is the mortgage. Ours is about $560, but we live in rural Kansas. Because of how rural we are my husband and I both commute (under 30 miles) to work. So our gas and other vehicle related costs are a lot higher than yours.
That’s it. I’m moving to Kansas! I have a love/hate relationship with Northern Virginia. The housing costs for a family are so expensive. I rented a basement apartment in someones house when I was single for $100 more than your mortgage! I’m really going to work on finding a solution to that next year.
I feel like your internet is a bit high…we do internet only with Charter for $59.99/mo at a rate of 60blahblahblahs (idk what the right measurement is!!). Maybe you have faster speed but it seems like a lot.
It might be. We have Verizon Fios. My husband insisted on it. I think it’s some sort of fancy cable with fast internet? I’m actually due to call into them to see if we can lower it though. Fingers crossed.
Where do you allocate all of this money? Do you have several accounts where you spread your money out? Or do you have a running list of how much money is in each category?
We’ve tried it every way. For now, I use calendarbudget.com (I’m about to start testing everydollar, but calendar budget is free), so that tracks my category spending for me and I update it weekly (we don’t purchase frequently, if you still buy things daily, you should be updating daily or every other day, it only takes a few minutes). So that helps me track categories (though the money is kept in out bank account). For things that won;t actually get used every month (vacation, business spending, car fun, emergency fund), I create separate savings accounts through USAA then just nickname them. Make sure if you use multiple savings accounts that you don’t deposit money that you plan to use frequently over the month (some banks have limits on withdrawls) and make sure it’s an account that doesn’t charge fees.
The Internet price is insane. Thats almost what we pay for internet, cable and a free home phone through time warner. Were in Ohio. The internet can be purchased as low as $14.99 a month it costs an extra $10 if you want faster service but they gave it to us for free because of our existing services. They’re also very easy to negotiate with. No contracts and will usually give you whatever promotions are going on if you simply ask. We usually call about once a year to negotiate our bill and they’re happy to help.
Internet is something I need to figure out. I’m clueless when it comes to trying to figure out the different routers, wifi, ethernet etc. I’m going to send my bill to Cinch Financial and see what they can do with it.
We have a family of 7, and live in a medium sized city in Florida, on the gulf coast. We pay far less than you in mortgage: just under 700 a month. We have an HOA, but I think it’s just 200 a year.
We pay ALOT more than you in groceries. 1000 a month. No car payment, and we drive a twelve year old Toyota, and an 8 year old 12 passenger van. We do not have personal spending money at all. We buy nothing, except groceries and clothes, and gas and the bare minimums. Our clothes budget is more like 2,000 a year, broken into 1 trip for the hubby’s work clothes, and 2 separate trips for the kids’ consignment clothes. I rarely buy clothes, I’d say I spend less than 100 dollars a year on my own clothing.
We are living the good life. God bless.
Oh yeah, and we homeschool… that’s anoth 2,500 a year. about.
We’re looking into homeschooling now. I’d love to start with it and see how it goes.
I would love your mortgage! (not your grocery bill!) 🙂 Bless you for raising 7! That’s a lot of folks to feed! At 1,000/month for 7, I think you’re doing great on groceries!
I spend $60 on internet (plus tax)
Man, I need to get in on that deal!
I noticed that you are looking at different ways to manage your budget. We just started using YNAB or You Need a Budget. It is $54 but an amazing investment. It has a free iPhone app that goes along with it. Basically you set up a budget and then put in EVERY TRANSACTION you make. The program automatically deducts it from your budget so you know EXACTLY how much you have left.
YNAB is a great program! Thanks!
We moved to a different town/county last month. We’re still within commuting distance, the schools are fab (if my kids decided to keep going to ps- we give them the option every year), taxes, insurance, and fees are lower. And our neighbors are much nicer. lol We traded the electric furnace for solely wood heat, which has def been interesting. We’re saving $300 a month now. We bulk shop (Costco, local restaurant supply store, and a co-op that gives us 10% discounts on ordering bulk) instead of couponing. I hate couponing. We have older vehicles as well and maintain them regularly. However I’m toying with the idea of swallowing a car payment for the extra space- teenagers. Our internet is ~$50/month (CenturyLink), whereas before the move it was ~110. So that makes me happy. Other things as well, but these are our biggest money saving changes right now. OH And about water/sewer- we also had/still have to pay for stormwater- our old bill was almost $100/month. Now it’s $83 and the water allotment is more.
Nice! That’s a lot of extra money every month!
$300 a year on hair cuts seems awfully high to me. I get my hair cut twice a year, a simple cut that grows out nicely, for around $35-40 each time (I tip a lot), and I cut everyone else’s hair at home. My husband only gets his hair barber cut if our neighbor across the street wants to try to talk him into running for Village Board Trustee. (Our Village is a weird mix of Chicago political horse racing and Mayberry neighborliness.)
Hi I just read your blog abt the budget love it but do you have one for single parent. Or it’s the same process thanks
Hey Farah! Email us at [email protected] for the 90-day Budget Challenge. It’s free!