The cashier shot me an inpatient look as I shuffled through my envelopes.
Fumbling, I dropped the cash in my bag and reached for my debit card.
A checkout deficit can embarrass even the most frugal budgeters. And most of us will throw the budget out the window, at the risk of admitting we’ve overspent.
But why does budgeting have to be so confusing? Do we need 10 different budgeting categories to manage? Does it help us save any more money?
As a busy mom, these budgeting systems didn’t work for me. My guess is they aren’t working for you either. Or they work, but you hate all the bookkeeping.
I decided I needed to create a simple way for busy moms to budget. And with that came simplifying budgeting categories so they would be easy to follow and track.
If you’ve tried to budget but find yourself lost and confused by the amount of bookkeeping necessary, I’ve created a simple budgeting system that will work for you.
3 Simple Budgeting Categories for Busy Moms
But First, Fixed Expenses
At this point, you should already have your budget (if you don’t, get started here). We’re going to look at the budgeting categories that you need to track.
Before you get there, make a list of all your fixed expenses. These are the expenses that don’t change much from month to month. You may need to check off that they’re paid monthly but you don’t need to track them.
List these expenses. Decide if you want to keep or cut them.
Break everything down so you can see all of the numbers, but once you’ve got it, this number shouldn’t fluctuate much from month to month.
Things This Might Include
- Home Cleaning Service
- Pest Control Service
- Loan Payments
- Monthly Subscriptions
- Health Insurance
These are all expenses that you’ll have every month and you don’t plan on cutting. (You can come back at the end and cut if you need to.)
And Then, Variable Monthly Expenses
Now write down all of your variable monthly expenses. These are expenses that don’t change from month to month. But there amounts change.
- Credit Card Bills
- Health Expenses (medications,co-pays)
Write down the expenses in this column that you have to pay.
The Only 3 Categories You Need to Track
After your fixed expenses, you’re left with 3 budgeting categories that you need to track. I’m going to break them down and show you the best way to do that. These 3 categories will cover all of your expenses and make tracking your budget simple.
Category 1: Food
This budget is going to be split into two subcategories–groceries and eating out.
Now, if you are in serious debt and you NEVER eat out, go ahead and just budget for groceries. But chances are your family spends some money on eating out.
How much should you budget for food?
|$150 monthly per person||$50 monthly per person|
A reasonable amount is $150 monthly per person for groceries and $50 monthly per person for eating out. (This number is based on my own experience and the data I’ve gathered from surveying other families.)
This may vary based on where you live and the type of food you buy. But it’s a starting point.
Sample Grocery Budgets
|# of Family Members||Groceries||Eating Out||Total Monthly Food Budget|
If you have children part-time, determine the number of weeks each month you have each child (round up to the nearest week) and divide $150 by the number of weeks.
1 child 2 weeks per month = $75 a month for that child
2 children 1 week per month = $75 a month for both children
Eating out is classified as a quick dinner or an individual lunch. Don’t count date nights or birthday dinners. There’s a separate budget for that.
You don’t need to give each family member their $50. Have one family member manage this budget.
Groceries and Eating Out can borrow from each other. Say it’s been a busy week and you haven’t had time to go to the grocery store. You’d rather spend some of your grocery money on eating out tonight. Go ahead.
But remember that eating out costs more than eating in. So don’t make borrowing a habit.
Breaking it Down Weekly
One thing I’ve learned from 10+ years of getting paid monthly is you have to break it down weekly. So take your budget and break it into weekly allowances.
Each week, go to the ATM (ideally) and get your budget in CASH. (You don’t have to use cash it works best for staying within budget on food.)
|# of Family Members||Monthly Grocery Budget||Weekly Grocery Budget||Monthly Eating Out Budget||Weekly Eating Out Budget|
Feel free to round up or down to make things easier to break into weeks. This is your budget!
For example, my family budget should be $675 monthly for groceries and $225 for eating out. With a total of $900 for our monthly food budget. Instead, I break it into $700 for groceries and $200 for eating out so I can break it into $175 a week for groceries and $50 a week for eating out.
Category 2: Spending
This category is for everything you spend money on. As simple as that. I don’t care if you spend money on home items, clothes, or pet supplies. It’s all spending and it’s all coming from the same place.
To make it simple, this budget is going to mirror your food budget.
Break it down into two categories–needs and wants. $150 per person on needs and $50 per person on wants.
Again, you don’t need to give these amounts to each person in your household. It’s just a gauge to help you control your spending based on the needs of your family.
Keep Spending Under Control
Each week, keep a list of your family/household needs. At the end of the week, consult your list and buy the items you need, within your weekly budget. No need for cash.
This means you spend your money at the end of each week. Not the beginning.
Add your wants to a list too.
At the end of the month, sit down with your spouse/family and spend your “want” money. Or save it up each month to buy something big.
A Want or a Need?
How do you know if something is a need or a want?
If you run out of something you already use or it breaks and needs to be replaced, it’s a want. For example, if you wear makeup and you run out of mascara, that’s a need. If your shirt rips and you don’t have enough shirts for the week, that’s a need. If you don’t like the shoes that you wear on a daily basis and want to replace them, that’s a want (if they break and are unwearable, they’re a need).
Ultimately, you decide if something is a want or need. If you can function daily without it, it’s probably a want.
Why This Saves Money
Often we spend money without thinking about it. We “need” items constantly, but when we take time to inventory our needs and wait to purchase. We find we don’t need as much as we thought.
I often remove items from my list by the end of the week/month. Turns out we didn’t need to try a new moisturizer, buy work shoes, or upgrade our toaster. Or we don’t want to spend our precious “want” money on a new baby monitor when the half-broken one still works.
As with your food budget, you can borrow between these two categories. Remember you only spend your “want” money at the end of the month, so by then all of your needs are met. If you have extra, feel free to spend it on a want or save it.
Category 3: Fun
As a family, it’s important to set aside some time and money for fun each month. This category should amount to time spent with others. Whether that’s watching a movie, having coffee with a friend, or going out for an extravagant anniversary dinner.
The reason I like to track this separately is that our money can easily get eaten up by things. Then when it’s time for a much-needed date night, there’s no money.
Try to set aside at least $25 per person a month for fun. Up to $100 per person if you can afford it.
These small indulgences help you prioritize community and energize your life and family.
Things This Might Include
- A new board game for family game night.
- A dinner out at a restaurant.
- Buying a movie for family movie night.
- Movie theater tickets.
- A date night out.
- Ice cream out with one of your children.
- Coffee with a friend.
- A trip to a store everyone picks 1 thing to buy.
How to Track Your Spending
With these simple categories, it’s easy to track your spending. But it is helpful to write things down.
Keep an accounting of your spending in each of these 3 categories. I like to keep a budgeting book to write down all of the items we buy and track bills. Using these categories makes that process simple.
With this simple method, it’ll take 15-30 minutes a week to write everything down and check-in.
A New Category
When you budget using these categories, you should find one new category–savings. After you’ve followed your budget for the month, take the money you have left and allocate it to paying down debt or saving.
If you have a big item you want to buy that costs more than your monthly Want Budget, you can allocate your savings each month toward that item.
Navigating the Unexpected
As I wrote down our expenses for the week, I quickly realized we had a problem.
I hadn’t bought any of our weekly needs, but a few trips to the hardware store had put us over budget.
When this happens, there’s no point arguing or pointing fingers. The budget got blown and there are still spending needs.
Look at the money you have left for the month and redistribute it for the remaining weeks. You might have $75 a week instead of $200 for the rest of the month. Try to stick to the bare minimum needs and come up with a plan to avoid this next month.
If you blow your entire budget and there’s no way to fix things. Try to spend as little as possible and reevaluate next month.
Is this a one-time problem or a bigger issue? Do you need to reevaluate your budget?
Whatever you do, avoid using credit cards to cover your overage. When you use a credit card to cover overage, the problem bleeds into the next month. If you don’t pay off the entire balance, it bleeds into many months.
Do the best you can to cover your monthly expenses with that month’s income.
If you consistently don’t bring in enough income to cover your expenses, you have a problem. You need to either cut expenses or bring in more income. Check out Transforming Your Finances for tips on money management and Saving Money on Childcare if you’re looking to cut expenses.
Whether you’re just starting out or just can’t seem to stick to a budget, these 3 budgeting categories will make money management simple. Pretty soon you’ll master budgeting and won’t find yourself frantically sorting through cash in the checkout line.
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