Before I get into how I budget I just want to say what works for me and my family won’t work for other families and I understand that and that’s okay. I hope you do take bits and pieces of what I do and apply them to your budget where it works for you!
Part 1: Bank Accounts
To start I’ll go through the types of accounts I use so you can see where we keep our money. We bank with 4 banks and have a total of 9 bank accounts and 2 credit cards. Our bank accounts are as follows:
- Retirement Savings- Husband (money we NEVER touch)
- Retirement Savings- Wife (money we NEVER touch)
- Joint Chequing account (pay bills from this account)
- Leisure Chequing- Husband (husbands money for what he wants)
- Leisure Chequing- Wife (wifes money for what he wants)
- Children’s Chequing- (children’s gift money or any money to spend on our children)
- General Savings (savings for no reason)
- House Down payment (savings for our house)
- Car (savings to buy a car)
We keep the money separate so it’s easy to see when and where all the money is going. Having it all in one account seems simpler but once the balance gets high we tend to think we’re rolling in the dough and overspend big time. By having it spread across multiple accounts we see what we really have available.
Part 2: The Budget
In a perfect world I’d love to do a budget based off one persons income and we save and invest the other income, but that isn’t a reality for us right now. We’ve started our family about a year ago and we are in save and increase quality of life mode. Depending on where you are in your life where you want to put most of your money will be different. Right now we put a pause on saving for retirement and investing to save for a down payment and future children. I’m currently on maternity leave and once I go back to work we’ll have the added expense of $600/month in childcare. This is what out budget looks like in July.
I use a planner that I purchase on Etsy from Writeitdownbooks and I LOVE IT. I keep it super simple and I never budget for months at a time. It doesn’t make sense to because our needs will change by then. For example next month I plan on buying a vacuum and a new car seat for Grace. This month she doesn’t need anything so I don’t have to budget for anything.
I organize the budget into 3 main parts; income, expenses and investments. I won’t be making any investments until after I’m back at work full time so thats $0 across the board and I include debt in the expenses. As you can see our only debt is the 2 credit cards which we are excited to pay off once I’m back at work.
The first thing I do every month is find out my husband work schedule to see how many days he’s working. He can only see 3 weeks at a time so only budget for the 3 weeks. I’ll show you what I do with the money he makes in the 4th week and if they offer extra shifts at the end. I then add up all of our income so I know what we have to spend the upcoming month. For July we have $2 650.
Then I add up all the fixed expenses (the expenses that I can’t change for example I can’t spend less on rent or bus passes). For July that would be household expenses (which is cell phones, internet etc.) Carma (electricity bill), transportation, Goodlife, WordPress, Google play, rent and the 2 minimum payments on our credit cards. That came up to $1 721.
Household Expenses $225
Carma Billing $75
Google Play $15
Credit Cards $259
TOTAL: $ 1980
Now I take the monthly income and subtract it from my fixed expenses
$2650 – $1980= $670
So now I know I have $670 left. This month I already decided I wasn’t going to add anything to savings or investments so with the rest of this I’ll have to fit it into my remaining categories: laundry, groceries, amazon (subscribe and save where I buy baby formula) and Grace expenses.
I can pretty much spend anywhere from $0-$400 a month on groceries. If I don’t spend anything that means we are going to be eating from the extended pantry all month (dried/canned food) but it is something that I can do. However, that it reserved for emergency months. I keep an extended pantry for unexpected job loss or if we don’t have enough money for some reason. Because of this reason I do the grocery money at the absolute end when everything else is paid.
So with the remaining $670 I’ve added $50 for laundry, $50 for Grace expenses, $210 for Amazon (baby formula, multivitamins, etc.). I always have something in the category for Grace in case there is a really good sale or she needs medicine or breaks/outgrows something she needs. Babies are unpredictable.
Grace Expenses $50
So I’ll add this to my other expenses
$310+ $1980= $2290
Now with my leftover money I’ll add everything to groceries. Keep in mind groceries is not only food but things for the house like toilet paper, soap, toothpaste etc.
$ 2650- $2290= $360
Now every dollar has been placed in a category. Hubby and I don’t spend money nor do we like to. We don’t buy clothes, shoes, coffee or anything like that so if we don’t have any spending money for the month it wouldn’t really matter. For hobbies we enjoy reading, watching movies and playing and games and we have a TON of books and games. For movies and shows we have Netflix (part of the household expense). If we do want something we usually just add it to the budget for the following month.
Alright so now that the budget is done as the month goes on I keep track of the spending and income. When hubby works an extra shift and can see his last week we use that money to pay down our debt or if a need (not a want) came up during the month. For example this month I went over our grocery budget by $40.