On my sixteenth birthday, my dad gave me a set of budgeting books by Larry Burkett. I had just gotten my first job and a new car so it was the best gift he could have given me. He got me started on the right foot by learning to allocate and spend my money within those categories.
What is a budget?
A budget is a spending plan for your income. The amount of money you make in a month or a set period of time is divided into several categories like rent or mortgage, transportation, food, insurance, tithe, savings, and other miscellaneous line items.
Budget Tracking Options
The Envelope System for Beginners
When I first started I used the envelope system and that was a good foundation for helping me understand the basics of the entire process. This is how I did it. I got a set of envelopes, a pen, and the cash from my paycheck.
First, I figured the amount I owed for tithe because I believe that we should give God our first fruits. Once I figured the amount, I put it in an envelope labeled Tithe.
Then I moved on to my bills I had to pay. For example, I had a car payment I was paying to my parents and so that amount went into an envelope labeled Car Payment.
I needed to have money for gasoline to get to work and other places I needed to go, so I estimated that cost and placed that amount in an envelope labeled Gasoline.
Now I was sixteen so that was back when life was simple and I still lived at home with my parents. They provided me with basic necessities like food and shelter so I didn’t have to worry about that. So I made an envelope for anything else I would spend money on like going out or buying clothes.
This system worked really well for me as a beginner because I really didn’t have much to work with. The envelope system is a great system for a child or teenager, to start with because it is a hands-on activity.
However, I wouldn’t recommend it for a family and especially a large family for a couple of reasons.
- You don’t need to have all that cash sitting around your house.
- You risk losing an envelope.
We have banks for a good reason and one of those reasons is to protect our money from being lost or stolen. It always gave me a little anxiety because I didn’t want to lose an envelope because there was a good chance I wouldn’t get it back.
Quicken
Since Rick and I have been married we have used Quicken. I like the format they use and it is very easy to understand. They do have an app you can use to add transactions into as well.
I keep ours as simple as I can so I set up the following things in Quicken:
- Checking and savings accounts
- Credit cards and loans
- Other investments and assets
- The budget
Checking and savings accounts
You set accounts in Quicken for any accounts you hold at a bank. You enter all your debit and credit transactions into that account as you spend or receive money. When you enter a transaction into this account you tag a category into your budget so it will add or subtract the money in the category you have allocated.
I will insert this thought here… I like to keep a certain amount of money (approximately the amount of one month’s expenses) as a base in our checking account for cash flow. This is technically part of our savings but I keep it in our checking so I don’t have to stress about money being in the account to pay the bills on their due date.
So for example, if our expenses for a month are about $5,000 then I would keep $5,000 in my checking account. It is actually a part of my savings portfolio and is not to be considered for spending. This is another reason tagging a category when you are entering a transaction is so important. You don’t want that money being eaten away slowly.
This has saved me a lot of stress and time over the years and we no longer had to live paycheck to paycheck.
Credit cards and loans
If you have credit cards and loans, you can set up an account to track them. You can visually see how much you owe as you enter the transactions and pay them off.
Other investments and assets
You can keep track of any assets or investments you have in this area.
The Budget
As I said before whenever you spend or receive money it is tagged or allocated to a category in your budget. For example, when we are paid every month, I enter that into our checking account and into the category of Salary.
When I go to the store and purchase $20 in toilet paper (we have a large family!) and $20 in groceries my total bill comes to $40. When I enter it into my Quicken checking account, I will make the payee as Sam’s Club, and split the transaction charging $20 to our miscellaneous spending category and $20 to our grocery category.
I have categories for everything we spend. I never enter a transaction into Quicken and not tag it to a category. If you do that, then it will take it directly off your bottom line. If you have planned for every penny of your paycheck to go somewhere, which you should, then this will cause you to overspend. At the end of the month, you will be short the money you didn’t tag to an account.
Keys to Budget Success
The key to success in budgeting is consistency. You have to always be working on it on a daily or weekly basis depending on your lifestyle.
Make One Every Month
The first step is to make one every single month. Before the end of a month, I put the next month’s budget together so it is ready to go and I have an idea of about how much I have to work with.
As the years have gone by, I have learned our spending behaviors. For example, I know that the grocery bill in the month of December will run about $300 more than other months so I can plan for that.
I also know in the months we have planned camping trips that the grocery bill is going to be higher too. I adjust our spending accordingly and sometimes if the budget can’t allow for extra spending then I have to figure out another way.
Either I cut my spending in other categories, if possible, or I look for alternatives within my grocery budget. Can I go with a cheaper protein on a meal?
Update It
You have to update your budget on a regular schedule. I do not recommend that you wait until the end of the month to enter everything into your budgeting software. Why do I know this? Because I have made this mistake!
If you don’t plan to update your budget through the month, then you have no idea what you are actually spending. I want you to think of a budget as guardrails on your road to financial success. They keep us on the right track and prevent us from going over the cliff. Just like with actual guardrails on the road, you have to watch and be aware of where you are headed.
Updating Quicken is on my to-do list weekly. We consolidate most of our shopping trips and so I have a good idea of how much we are spending each time. But there are always little surprises and things you forget, so that’s why I do it weekly.
Move Things Around
One of the ways to ensure your budgeting success is to be flexible. Now I am not saying that you spend money you don’t have. What I am saying is that sometimes the grocery bill needs to be boosted and then sometimes there may be some excess and another category needs to be bailed out.
Don’t be afraid to rob one category to pay another if the money is there and able to be moved around.
Large Family Budget
Now, I am going to get into the nitty-gritty of our large family budget. Our family is very unique and so is our budget. Every family has its own set of circumstances, challenges, and goals. I think it’s important that you have a plan to accomplish financial freedom.
So let’s get started and talk about how we manage some of our expenses for our large family.
Tithe
The first thing we pay is our monthly tithe of 10%. This is given back to God to support the church and its ministry. This principle is talked about through the bible and should be the first thing we do.
I could sit here and tell you stories upon stories of how God has always provided what we need and at the perfect time. He always takes care of us.
Savings
I believe in having an aggressive savings plan for both an emergency situation and for retirement.
Everyone should have an emergency fund to cover whatever may come up. The money is there if you need it and it provides some peace of mind every day. If you have to use it, you just fill it back up.
Entertainment
This is a category that if you are not careful will blow the family budget so quickly you will have no idea what hit you. So we are always looking for ways to do fun things on the cheap.
National or State Parks
National and State Parks have amazing programs for families to participate in at no cost or a very low affordable cost. We recently attended a cloud class at one of our local state parks. The ranger taught the kiddos about all the different clouds, did an experiment, and a cloud art project with cotton balls and paint.
This program was completely free and they were so grateful for our attendance. Plus, as a bonus, Andy now knows all the types of clouds at a glance.
The National Parks have a great program for families that have fourth graders. The fourth-grader in your family will receive a free pass to the National Parks good for them and the whole family. We used one last year visiting the Badlands and Yellowstone. Follow the link to find out more about the Every Kid in a Park pass.
Church Events
Local churches have some really awesome events to benefit the community. This is a benefit for large families because you get to participate in some good clean fun and most of the time it’s free.
Get a Family Membership
Sometimes, when there is something you want to attend and there is an admission fee, then it may be helpful to check and see if they have a “family membership” where they let the whole family in for a certain price. This is especially advantageous for those of us who have a lot of kids.
For example, when we went to Hershey, Pennsylvania, we had studied the life of Milton Hershey with a unit study I had written. We wanted to visit The Hershey Story, an interactive museum, that documents his life.
Before we went, I got on their website to see the pricing and I noticed that a family membership was cheaper than buying each person their own ticket. Plus, if we had been local, we could have come back for free for the next year.
Make Your Own Event
This one is my favorite and I am known to do it a lot. I will plan a family event and advertise it to my kiddos so they will get excited and look forward to it. These “events” hardly cost anything but are a big deal to them.
It does require some time and organization though. For example, we may have an outdoor game night. The plan is to play outside games of their choice while we eat chili dogs and roast marshmallows.
I have already anticipated the cost of feeding them dinner because, well, they expect that every day for some reason. All I have to factor in is a bag of marshmallows. So for less than $1, I have created something for my kiddos to look forward too.
The key is all in the marketing… You need to announce it a couple of days ahead of time so they can get excited.
Movies
Movies can be expensive, so we don’t usually go unless it is a family-friendly movie that we know the kids will sit through. So, when we do go we have a couple of options: $5 Tuesdays or the drive-in.
On Tuesdays, Marcus Theaters have the admission price for $5 and other specials, especially for Movie Rewards Members which is free.
We are fortunate to live close to a Drive-in movie theater. Some people have never been to or seen a drive-in, that is unfortunate. I do have to point out that it ‘s not the same as when Rick was a kid. When you had the speakers that you put on your window or have the big playground in front of the screen where the kids could play and watch the movie at the same time. Now you tune your radio to a specific radio station for the sound. We use a battery-operated boom box that we set out by where we have our lawn chairs set up. But still, it is a great experience for our kids and to top it off, it’s affordable.
At our local drive-in the Starlite Drive-in Movie Theater we go on the weekdays because the price for Monday – Thursday is $15 for a carload, which is a blessing. Plus you get to see two movies for that price if you can last that long, our kids can’t.
So search your area for deals at your local theaters.
Eating Out
Honestly, we do not eat out a lot because it costs so much money. So when we do eat out, it is a special treat enjoyed by all.
Kids Eat Free
If you can plan to eat at a restaurant at a time when kids eat free, it saves you a lot of money. We google offers in our area before we make a decision about where to eat.
Special Treat
I have found that buying a special treat instead of the meal saves us money. For example, we will pack a lunch and then plan to stop for an ice cream cone for everyone. Instead of paying $40-$50 on a meal, I have paid $10 for ice cream and everyone feels like they got a special treat.
Pack a Lunch
The majority of the time, we pack lunch in these fancy little bags that a good friend of mine made us. They work perfectly and have each child’s name embroidered on them in their personal color.
Every child is assigned a color to indicate that the item is theirs. This cuts down on the sibling bickering and we can simply glance at an item and know exactly who’s it is.
They pack a lunch from our menu board in their “food purses.” That’s what Georgie Lou, age 3, says they are. The kiddos independently prepare their breakfast and lunches using this method detailed in this post.
Each child is responsible to pack a lunch and a drink in their lunch bag. Nikki, age 5, and Georgie Lou, age 3, do this with the help of their meal buddies. Meal buddies are older siblings who make sure they don’t just pack cookies for lunch.
Stock the Van
We stock our van with bottled water and individually wrapped snacks to prevent people from becoming “hangry.” The word “Hangry” means the way someone acts when they are hungry and become very angry.
I got this idea from an experience I had one day when I was still packing the lunch for the entire family. I had forgotten to include bottled water so we popped into a gas station to get drinks for everyone. It cost me $9 for drinks! I know, $9! I think I am still in shock over it. I would have rathered to buy them ice cream than drinks and so that’s when I decided to pack a case of water for the van.
Just to give you a comparison… a case of 40 bottles of water from Sam’s Club costs us about $3. So I could buy 120 drinks for the amount I spent at the gas station in a pinch for 8 drinks.
Groceries
Groceries are a line item in the budget that fluctuates. It changes because the kiddos are constantly growing up and they eat more as they get bigger. We have three boys and some of our girls can give them a run for their money.
Right now, I budget about $950 per month for groceries for a family of nine. When we were fostering, I would immediately increase the grocery budget $100-$120 per month based upon the age of the child.
Grocery Money Saving Tips
Menu Plan
I menu plan. I know this may seem like a mundane thing to do but trust me it saves a lot of money. I offer a complete guide to doing this in this post:
Weekly Food Prep Day
Weekly prep days saves money because it provides convenient options for you to grab and go. You know those lunches we pack? They are packed with options that we have prepped on our weekly meal prep day. It also is much healthier.
Freezer Cooking
Freezer meal prep, not only does this save me money but this saves me time. I plan to make around thirty meals all at one time. Because I shop and prepare all the meals all at once and then freeze them, I save quite a bit of money. Generally, our meals cost between $10-$12 and feed 10 people. Check this post out to see how we do it. We even made a YouTube video about it!
Buy-in Bulk
Because we need so much stuff, we buy a lot of our items in bulk from a wholesale club. We also shop at Aldi and Walmart too.
Make It From Scratch
It saves a lot of money to make things from scratch. For example, Sheet Pan Pancakes are very easy to make and are so much cheaper than buying storebought.
Bills
We have to pay bills and most of these are hard to adjust. However, there are a few things you can do to help reduce your monthly expenses.
Re-Evaluate
Every year, I re-evaluate the line items of our budget. I look at things like cell phone bills, cable or satellite TV, monthly subscriptions, the internet, and credit cards.
Cell Phone
First of all, I get online and explore different plan options and rates because we can change our cell phone plan without interfering with our contract. I look at what we are using compared to the plan we currently have. I check to see if we are in the best plan and then change it if we are not.
The last time I did this, I eliminated cell service from some of our devices from our monthly bill. We now have WiFi internet at our house and so I don’t need to have cell service on all our devices.
When I changed our plan and reworked the service, I reduced our bill by over $100 per month. It’s definitely worth taking a look at!
Cable or Satellite TV
Honestly, if we had a little stronger WiFi signal out here I would cancel the satellite TV altogether but we do not. So I always evaluate the plan I have and have eliminated channels we are no longer watching.
I also call the company and ask them if there is anything they can do to reduce my monthly bill. Every time I have done this they have worked with me and either bundled something together or reduced my rate.
Monthly Subscriptions
These seem like such a great deal in the beginning but can add up so quickly. Every year I look at our monthly subscriptions for streaming services or book reading and see if I feel they are worth it.
I also look to consolidate if I can. Does one company offer a combination of services for a lower price?
Internet Provider
We just did this. Rick did some research on our internet provider to see if they were the best price that offered the best service for where we live. I think he decided to stick with what we have.
Military or Veteran Discount
Rick is a Veteran because he served in the Army before he met me. Did you know that some places offer Military discounts to veterans? When I was researching our cell phone plan, I found this out and it saved us about another $60 per month on top of the $100. I was shocked because I didn’t even know this was an option!
Credit Cards
When we were working to get out of credit card debt, we learned to call the company and ask for an interest rate reduction. Sometimes this worked and sometimes it did not. However, I did learn to transfer balances to different cards to get a promotional rate. There is usually a balance transfer fee so you need to make sure that it will be worth your money to move it.
Shopping
I used to shop as a hobby but as our family grew larger, our time became more limited. Shopping trips with large families are more cumbersome and definitely not a relaxing venture. So I began to change my opinion on shopping trips.
Thrift Stores
I have to thank my lovely sister-in-law for teaching me how to shop at thrift stores. It truly saves a lot of money as you find treasures others have parted with.
We thrift shop for all areas of our home including clothing, towels, and blankets. It’s a great way to get some really good items for a fraction of the price.
Minimal Shopping Trips
I began to realize that every time we went into Walmart we would spend between $50-$60 so I decided to limit my shopping trips. We shop once a week and I make a list of all the things we will need so we can plan to get them all at one time. This saves money on our gasoline too because we are only running to the store once and usually combining it with other errands as well.
Walmart and Sam’s Club have pick-up options too. This is a great opportunity to save time and money because they will do the shopping for you. This keeps me within our budget and eliminates impulse shopping.
Credit Card Rewards
Now, we put everything we can on a credit card and then pay it off every month. When we charge on our credit card, then we are paid a percentage from the credit card company in rewards. This results in about $50-$80 per month.
How to Get Rewards
Every credit card is different and you are paid a different amount for the types of things you buy or the places you shop. For example, one of our credit cards pays 2% cashback on gasoline while another one pays 5% back on a rotating schedule of things. In the months of October, November, and December, they paid 5% back on all Amazon purchases. Since we do most of our Christmas shopping through Amazon, this was a really good deal.
Pay Them Off Every Month
You have to pay the credit cards off every month or this method will cost you money. It is my recommendation that you have consistently maintained a budget for at least a year before you attempt this.
Credit cards are slippery slopes and you don’t want to carry that kind of debt.
Track Your Purchases
When we make a purchase on our credit card we deduct it directly from our checking account and take it from one of the categories in our budget. When the balance on the credit card is due, the money is already allocated in our checking account to pay it off.
Gasoline
We consolidate our errands to do as much as we can in one trip in order to reduce our gas bill. For example, I take the kiddos to the library every other week. I do this on a Wednesday when we are headed to church for the evening. It costs about $15 for me to make this trip and so if I combine it I only have to pay the $15 once.
Get the Best Prices
Check your local prices before you fill-up. I am always very surprised when I see such a gap in price and try to take advantage of that. The app we use in Gas Buddy and I find them to be very accurate.
If we create a budget and spend according to what we have planned, it will help us reach our financial goals. Having financial freedom reduces our stress and helps us live the lives God has called us to live.
Trust me when I say it is not easy, but it is worth it and I believe it is what God has called us to do!
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