Budgeting As a Frugal Mom
When some think of budgeting or frugality, they think of living without. Frugality and abundance traditionally do not walk hand in hand in our capitalistic, consumeristic society (not that there is anything inherently wrong with capitalism or consumerism - that will depend on your political views). But I beg to differ. I’ve chosen to live more frugally because I want my family and myself to live in abundance. It dawned on me one day that if I was willing to sacrifice my daily little treats, stop accruing credit card debt, stop financing cars, and start paying down my debts, my future could be wildly different than the path I’ve been on so far. So, that’s the journey I’m working on right now. The past 2-3 months have been dedicated to getting my finances in tip-top shape.
The 1st step for me was paying off my car, which was easy because I only had a couple of payments left on it when I decided to start being frugal. Not having to make a car payment has given me back nearly $350 per month. My 2nd step was putting away some money for emergencies because those tend to pop up the most often when you’re trying to get your life together. How much money you put away is up to you, but I would set aside between $500 - $2,000 which is strictly for emergencies. I’m talking ER visits, busted tires… that sort of thing. I would not recommend using your emergency stash for things like last-minute birthday gifts or “retail therapy.” My 3rd step (which is the step I’m currently on) is paying off my 3 credit cards. They’re all cut up, so I’m not using them anymore. My card with the lowest balance - my Target Redcard - just got paid off. That one only had a 3-figure balance so it took no time at all. However, my Capital One credit cards will take a bit more time. I estimate I should be able to finish paying both of them off by the end of 2024. Once all of my credit cards are paid, the only remaining debt I will have is my student loans. My student loans are pretty hefty, don’t get me wrong, but knowing that it will be my only remaining debt makes me feel much more optimistic about my (and consequently my family’s) financial future.
Once my credit cards are all paid off, I want to take a short break from budgeting and plan an awesome trip with my family. We all deserve it. Once we’re back, I will start working on my 4th step - start setting aside about 1/3 of my take-home pay to build up my non-emergency savings. I estimate it should take roughly a year to build up enough savings to cover six months of living expenses if sh*t ever hits the fan.
How am I budgeting, though, to be able to meet all these goals? I have a very simple and effective budgeting system that I’ve been using for years. It’s always been very good at keeping me on track. In simple terms, I budget each paycheck. And I don’t use an Excel sheet like so many others do. I just use the notes app on my phone. You need something you can easily update anywhere without having to get on your computer/laptop.
For example, let’s say I’m anticipating earning $2,500 in one paycheck. I would determine ahead of time what needs to be paid with that particular paycheck, and subtract that from the $2,500 balance I started with. So it might look something like this:
Paycheck - $2,500
- Rent $700
- Groceries $300
- Gas $80
- Electricity $200
- Capital One credit card $100
= $1,120 left for savings
Every dollar of each paycheck gets assigned to something, even if it’s just savings. And whenever a payment goes through and gets deducted from my bank account, I mark it as “complete” in my notes. That helps me easily see what is left to be paid on that paycheck.
Before each paycheck, I also try to think about what events are going to take place over the next two weeks (because I get paid bi-weekly). For example, the 4th of July is coming up and I know I’m going to want to do something fun with my family. I might budget (let’s say) $200 for 4th of July activities. That way, no expenses can creep up on me except for real emergencies. This is most important during Christmas time when I know I’m going to be spending a few hundred (or even $1,000+) on gifts.
I’ve been using this budgeting system probably since 2018 and it has served me very well. It works no matter how often you get paid - monthly, weekly, bi-weekly, etc. If you don’t have a job that pays you regularly, though, it may not be the best system for you.
An important aspect of budgeting that I found tricky is trying to figure out how much is a reasonable amount to spend on discretionary expenses (such as groceries, gas, and recreational spending). How much you can/should spend on a particular thing is going to be up to you, and will depend on you and your family’s needs. I have a family of 3, plus my stepdaughter every other weekend. So, up to 4 people on any given day. I’ve estimated that my partner and I can comfortably spend about $600 on groceries each month, which would mean that my portion would be $300. I get paid twice a month, so I set aside $150 each paycheck specifically for groceries.
When it comes to gas, I’m lucky that I don’t have to drive very much, and also pretty lucky to have a fuel-efficient car. After keeping track of how much gas I was consuming for a month or two, I determined that I only needed about $80 per month for gas. Before, I’d been setting aside about double that for gas.
As far as recreational spending - I keep this low. I budget about $120 to spend freely over a two-week period. However, if there is anything extra I know I’m going to need - such as new clothes - I will budget for that individually ahead of time, that way it doesn’t have to come out of my recreational budget.
How you choose to budget is ultimately up to you. All I can say with certainty is that everyone needs to make a budget that works for them. Floating through life without a plan for your money is an easy way to lose it all. It’s so easy to get caught up in purchasing things you want on a daily basis - a little coffee here, a little t-shirt there - but it all adds up. When you give all of your money a purpose, a world of possibilities can open up for you in the long run.
XOXO, Alexis.