You’d be amazed how resourceful you can be when you have to — this is our story of how we set a yearly budget that was way less than years before. And we stuck to it!
How to Set a Yearly Budget That Works
A couple years ago when I was doing our taxes, I found something very unexpected and encouraging. We had gotten by on less than $30,000 that year!
Except that was the thing — we didn’t just get by, we lived well!
We ate real food, we did fun things with the kids, and had all of our needs met (and then some!)
We made a yearly budget, stuck with it, and it worked…even better than we predicted!
Our story
That year both my husband and I started businesses (read about how I started my blogging business here…it literally changed our lives!!) We planned for this the year before by building our savings and making changes to our spending habits.
We had expected our income to be lower than usual and we knew this would be temporary. However, seeing the actual number was a shock — it was lower than I would have guessed!
Interestingly, we never felt deprived and we didn’t even dip into our savings (aside from planned business start-up costs). We had lived on a much lower income than we had planned for, and we never even noticed until we started crunching numbers at tax time!
So how did we do it?
10 Keys to Our Successful Family Budget Plan:
I’ve included affiliate links for products and services that I love and use in my own life; disclosure policy available here.
1. Cash-only for purchases
First, we implemented a cash-only system for purchases other than monthly bills. Each week we set aside a certain amount of cash for groceries, toiletries, and extras. This provides a tangible “limit” because you can actually see exactly how much money you have at your disposal for the week. Anything leftover was rolled into next week’s budget.
It sounds simple, and it is! (That’s the beauty of it!) You’re much less likely to overspend when you have money in hand and that’s it.
If you’re really worried about willpower (and I totally get it…Target is my danger zone!) then don’t take any backup payment methods with you.
Tip: I LOVE rebate apps like Ibotta to earn cash back each time I went shopping for groceries or household items. Right now Ibotta also gives you a $10 bonus just for joining! CLICK HERE to check it out!
2. Cook your own meals (at every meal!)
Meal-planning alone saved us over $1400 a month and was a crucial part of a budget that worked. Plus, it’s much healthier than restaurant food or take-out! Eating real food has saved us a TON of money and it also helped me lose the baby weight! (Bonus!!)
I cannot recommend this enough — meal planning is easy to do (actually, it’s easier than just “winging it”) and the results were a game-changer for us. My first ebook details step-by-step what we did so you can implement this system in your own life and start saving right away.
Related: Read more about how meal planning changed our lives and saved us a ton of money!
3. Sleep on it!
Impulse purchases can drain your bank account quicker than just about anything else!
When I see a gorgeous pair of shoes or an awesome sale at my favorite store, I don’t buy right away. Instead, I wait until the next day and then ask myself if I really need that item I was eyeing the day before. Chances are, the initial excitement has worn off and I don’t really care as much as I thought.
4. Don’t let alcohol sneak into your budget
My husband and I aren’t big drinkers (actually he doesn’t drink at all these days), but I do occasionally enjoy a glass of wine and I know a lot you probably do too! Before we had our youngest, my husband and I used to go out a few times a month with friends to the movies or for drinks. We live in a big city, so a specialty cocktail or nice glass of wine can easily set you back $10 (or more…yikes!) It’s easy to see how that could add up!
Instead of going out and paying premium prices, we periodically invite our friends to our home instead. Buying a bottle or two of wine and cooking our own bites (see above) saves SO much money! If everyone takes turns hosting, then everyone saves! Alcohol and entertaining are just a tiny blip on our budget, but we still have fun!
5. Skip the gym
And by that I mean, “skip the monthly gym membership fees!” Both my husband and I work out daily at home and have gotten awesome results. It’s not important where you workout and you don’t need fancy equipment. What matters most is consistency and just doing it!
Our favorite workout routine Body Beast is a weight-lifting program and only requires a few sets of free weights. Instead of paying a steep fee every month for a gym membership you may or may not use, you can pay a one-time purchase price of a home program and then you’re all set!
Weight-lifting was the final piece of the puzzle for me in losing my baby belly — it won’t make you “bulk up,” but it will make you burn more calories all day long (muscle requires more calories to maintain itself!) If that’s not your thing, a power yoga routine will also give you amazing results and even brisk walking (pushing a stroller or carrying hand weights) will get the job done!
6. Pay bills on time…every time!
When my husband and I got married, some of the bills were in his name, so I let him handle them. Except that he doesn’t have the best memory for deadlines and isn’t super organized. I noticed that some of those bills were being paid late and we were getting stuck with a $10 late fee! (A total waste of money!!)
Since I am by nature a more organized person, I took over responsibility for paying all the bills. I put the dates in my daily planner just in case, though I have all of the due date memorized. (One of my blessings…or is it a curse that I think about bills that much?) If it makes it easier for you, automate your bill payments so you can’t forget.
7. Lower your energy cost
We live in Texas, and energy bills during the summer can be out of this world (in a bad way!) Even small changes, like setting the thermostat one degree higher can make a big difference to the bottom line.
Tip: If you live in a deregulated state, call your electric company and ask for a lower rate. Chances are they will oblige to keep your business. If not, go elsewhere!
8. Make your own coffee
When I worked full time outside the home, I purchased a premium coffee every day. Sometimes twice a day! It got me out of the office for a few minutes and gave me something to savor throughout the long workdays.
However, when I decided to quit my job and stay home with the girls, I switched to making my own. My Nespresso machine might have been a bit of an initial investment, but each cup of coffee I make at home costs less than half of what my daily Starbucks used to.
I don’t totally deprive myself — I still treat myself occasionally — but maybe once a week instead of every day. The savings is so worth it! (And I love my Nespresso just as much!)
9. Make clothes last longer
Over-washing and washing in hot water can wear your clothes out faster. I wash all of my clothes in cold water on the delicate cycle. (Cold water saves a lot of money in energy costs too!) The only things I use warm water for are whites or heavily soiled items (like the baby bibs). I also re-wear items that aren’t dirty or I didn’t wear for very long, like jackets and sweaters.
Related: 5 Laundry Myths That Cost You Time AND Money
10. Be gracious
I do have to admit that my mother in law buys our diapers and toilet paper — it might sound like a funny thing to do, but it’s her “thing.” She enjoys providing these things for our family and actually gets upset if I buy them on my own.
I was raised to be very financially independent, so at first it was odd to me to accept what I initially saw as “handouts.” But I learned to be gracious and say “thank you” when someone does something nice for you. My mother in law truly wants to do this, so I accept her generosity and I am thankful for it.
More of my my helpful family finance resources:
- Read more about how we saved $10,000 in one year with these surprisingly simple ways to build your bank account fast!
- How did I turn my blog into a 6-figure home business? CLICK HERE to read the first step of starting a blog that could change your life!
Do you have any unusual budget tips that have worked for you? Share them below — I’d love to hear them!
- Chocolate Mayonnaise Cake - September 25, 2024
- Pumpkin Cheesecake Cookies - September 24, 2024
- 20 Fall Bucket List Ideas for Families - September 23, 2024
Michelle B says
Not to be unkind, but this is really not helpful for people who truly live on $30K a year and have for some time, like my family. We have zero money for Starbucks or wine or eating out. We live in (rent) a modest apartment on the low side of rent for my city. Our thermostat is 75 in summer and 72 in winter. I wash clothes mostly in cold as well. We never eat out unless it is an absolute necessity and even then, it is always on the cheap. I question this post, I question the accuracy. In this country, living on $30K is essentially the equivalent of two parents working jobs that earn less than minimum wage each. It is the epitome of the working poor. I know, because we are. The working poor fall into a crazy in-between space. They do not qualify for food stamps (we make $1700 a year above the line for it) or Medicaid. We get no discounts other than the occasional student one, because my husband is finishing a second masters. There is no room for any “treats” at all and we are not living well,… Certainly not the way you describe in this post.
Stacey aka the Soccer Mom says
Hi Michelle, thank you for sharing your thoughts, and I respect where you’re coming from. You’re right, this was a temporary situation for us (I did state that in the post). Both my husband and I were unemployed for half a year (myself for the first half, and he for the second half) while we started our own businesses. Since we knew this was coming and planned for it, we did not make any major purchases (car, furniture, etc.) and were fortunate not to have any unexpected emergencies which would have taken our modest savings. We also do not qualify for aid, aside from a temporary subsidy on our marketplace insurance during that year (we no longer qualify and pay entirely out of pocket at full marketplace cost). My intention was to encourage others who might have found themselves at a substantially lower income suddenly due to losing a job, as I know quite a few people who have had that happen with the oil industry bust where we live. I realize money is a sensitive topic and everyone has a different experience, and I am only sharing my personal experience (and it IS our true experience). Thank you again for reading and sharing your opinions, and for doing so respectfully.
Michelle B says
Just wanted to publicly thank you for writing me privately and offering additional information. I thought it was very classy and kind. I wrote you back.
-Michelle
Adrienne B. says
I love your tips! Some I use already but wome are new. I love your positive perspective too.
Stacey aka the Soccer Mom says
Thank you so much Adrienne! Trying to maintain positivity had gotten us through some tough times.
Yliana says
Aside from controlling the thermostat, invest in LED bulbs (the soft white ones give off the exact same light as traditional bulbs, warm and inviting). They may seem pricey at first but they save TONS in the long run and they last for 13 years plus. Ibotta is also a great little treat! I just started using it and I love it. Plus, if you have a coupon and there’s an ibotta rebate of the same item, you end up getting a double discount on the item. I haven’t mastered the meal planning thing yet but I’m working on it. Great article! Thanks for posting it 🙂
Stacey aka the Soccer Mom says
Great tip with the LED bulbs! We have been working on switching over, because we were going through so many regular bulbs before (especially on our outdoor lights!)
Melissa says
This just isn’t realistic for most families. I appreciate the article, and it was interesting to read. However we spend $12,000 a year on just food. We never go out to eat we don’t go out and do fun things we don’t drive nice cars we live in a house below our means. One thing we do that’s an extra is travel, but even if we cut that out we could still never live under $30,000 a year
Stacey aka the Soccer Mom says
Hi Melissa, thanks for reading! Food used to be a HUGE expense for us (almost $2000 a month when we were both working outside the home full time!) We made a concentrated effort to change this and create a meal planning system that wasn’t taking up so much of our income, and cut it down to $400-600/month. I wrote about that here: https://thesoccermomblog.com/2015/03/11/the-one-lifestyle-change-that-allowed-me-to-be-a-stay-at-home-mom/ It’s crazy how food can often be one of a family’s biggest expenses, but it is possible to work on it 🙂
Ann says
$1,000/month on food??? There is definitely room for lessening that, whether it be coupons, or store choice, generic instead of brand name, etc. I eat very healthy and am the only income for my son and I, we spend $200/month max. It takes some thinking, but when you do it, the money saved is worth it!
Michele Murray says
It can be done. Recently bought $1.29 LB awesome sale on hamburger at Stew Lenard’s.
5.5 lb family package. One pound for meatloaf (1lb beef, 1 PKG Lipton Onion soup mix or store brand, 1 cup milk, 1 cup breadcrumbs, mix, put in loaf pan, cover with 2-3 strips of bacon. Done. Wrap in Saran wrap and to freezer.
The morning you decide to have it for dinner, take out of freezer, thaw. Bake 1 hr at 350. I’ve baked it 2 hrs and didn’t kill it.
– 2lbs beef in bowl. Mix with a little salt, pepper or anything else you might like e.g. parmesian cheese, I like a little A1 sauce, like 2 TBS. FORM into eight hamburger patties – each one maybe heaping 1/4 cup. Wrap individually, then in freezer bag. Freeze.
– 2 lbs make homemade meatballs! Bake them on foiled lined cookie tray, bake. Or fry them if you like. Group depending on family size into freezer bags. Here 8 in each of three bags. Spaghetti and meatballs one night, meatball grinder! Ss another, etc.
Do the same thing with whole pork loin $1.69lbs. chops, roasts, pound thin slices and roll spinach, sausage and cheese inside.
Chicken sales too. Stews boneless Amish chicken breasts. $1.29 lb. CRAZY. FAMILY PKS. TONS of ideas for that. Marinated chicken breasts for salad. (Pound out breasts when thawed. I stick them inside a freezer bag to pound them so it doesn’t make a mess) Other ideas, chicken parmesan, chicken Picatta, Shake ‘N Bake chicken, Chicken Marsala – use leftovers for grinders!
Buy Pasta on SALE. This week Barille pasta .74 at Stop and Shop.
A pot of sauce goes a LONG way.. Store brand large cans of tomato sauce….sauteed garlic in olive oil, basil…whatever. add a bag of your frozen meatballs. Voila.
Best Regards,
A single mother of 3
Dinner for two with a glass of wine is easily $25+ ea.,plus tax and tip $35.. That’s a $70 expense I no longer want.
AND for $10, go to the liquor store and buy a magnum bottle for that – maybe 8 glasses. We like Woodbridge, Twisted, another I really like but it’s not magnum, it’s Apothic Wines. Find them, they’re awesome.
P.S. I could never shop for any of the above mentioned items AND prepare them for freezer in one day. So be kind to yourself. Shop one day, cook the next day or day after. Put some nice music on.
It can be done. I could write a book on this topic – multitasking for sure convenience. Make yourself proud !!
.
Katie says
Michelle, I love you! 1) jealous of stew Leonard’s! I’m from Wilton but live in Raleigh now. 2) I meal plan for the month and buy awesome protein specials when I see them. We’re just starting to budget – 3 of our 5 siblings now live in Europe and trying to squeeze as much out of our income as possible to get my family of 5 off to visit them. Love spending my Sunday afternoons with some jazz and wine, pull out crockpot, instant pot, and regular oven and bake several meals (usually worth 2-3 nights) in one afternoon. Then I just write out on the calendar what we’re doing for the month. But we’re terrible about still popping into market every night on way home for milk, cookies, chicken dinos, etc. Also I’m finishing my mba in December, just applied to VIPKid to teach English, and Lionbridge to do some data entry on nights I’m not doing homework. Even if I can figure out an extra $500 each month will be so helpful! Hate hearing “don’t have time” and I’m like “your day planner sucks…” Anyway, hope you’re enjoying summer and I’m counting down the days until I’m eating stew Leonard’s ice cream (12)!
Sam says
What a lovely green dress you’re wearing in this pic pls share how you made it I WANTS IT lol thanks Sam
Stacey aka the Soccer Mom says
It was actually a gift 🙂
Amy says
This is an outstanding article! A family with their priorities straight, a home within their means, and a positive attitude can absolutely make it on a lean budget with a smile and thankful heart. Thank you for sharing! You are an inspiration!
Amy says
I would add: buy second hand clothes! Salvation Army mag be overwhelming, but without kids in tow and a free afternoon, you can get a ton of things at a great price. Clothes Mentor is an adult version of Plato’s Closet, and my friends and I love it! Once Upon a Child is amazing. (If you have those options near you.)
I envelope all my spending money. It is fun to watch the clothes fund, for instance, grow and know it is there for when I need to replenish the socks! Just about anything but gas and bills comes from my accordion folder “wallet” in my purse. It is so easy to stay inside the budget when you can see the money you have allowed for each category. I have groceries, entertainment, clothes, pets, medical/medicines, pool care, home care, Costco bulk buys, and work expenses envelopes. If I run out of money in one, but I need to buy something, I’ll take from another every now and then (and maybe adjust the budget if I find myself running out of one fund often), knowing I’m still not ruining my budget because it’s all cash. Its all already accounted for. It has saved me so much money and brain power! I refill them every two weeks around payday. Because expenses vary, my envelopes roll over into the next pay cycle.
You are in charge of your money! Take back control. Budgeting eases my anxieties because I know where the money is going, and I know when I’ll reach my goals.
Stacey aka the Soccer Mom says
Thank you so much for your kind words and for sharing some of your tips Amy! These are fantastic!!
Brittany says
Thank you for being real and sharing your trials. My husband and I are just recently married and I would like to implement a budget for the two of us but the temptations are hard. Whenever I search Pinterest for budget inspiration almost all of the time they basically say to be a hermit and that Starbucks is a sin – which we are very social people. Thank you for being honest, and helping me to want to be strong by showing that there are options of moderation for everything that we enjoy.
Stacey aka the Soccer Mom says
Hi Brittany, I’m glad you enjoyed the post and that you found it encouraging! Moderation is key – kind of like a diet – if you never allow yourself a treat you’ll be likely to be resentful and get discouraged. I would be very grumpy without my occasional Starbucks 😉
Jennifer says
Great post! My question is about using cash only for other purchases. My fiancé and I are all about trying to maximize our spending by not only finding discounts, coupons, etc. but using specific credit cards to get points/cash back. What are your thoughts on that? Is it still feasible to shop with a credit card and keep your budget low?
Stacey aka the Soccer Mom says
Hi Jennifer, excellent question! I have two credit cards and these are my reasons: 1- it builds credit for large purchases (home, car, etc.); 2- certain purchases can’t be done in cash (insurance payments, etc.); 3- paying with credit card is safer than debit card (no direct access to bank account, credit card companies offer security measures); 4- you can earn points/cash back with a credit card. If used wisely, credit cards can be beneficial AND earn extra money!
Cheryl says
Hi Jennifer
I have a store credit card that gives me points. To stop me overspending my budget each month, I asked them to reduce my monthly credit to my budget. That way I could definitely not overspend each month. Admittedly they did think me very strange!
Elizabeth says
If there are Kroger stores in your area, you can get double fuel points when you buy gift cards. Any store we frequent, or are planning on a big purchase, we buy gift cards. You get up to 1.00 off each gallon (up to 35 gallons), so my husband and I take both of our cars and save around $35 when we fill up. It’s not a ton, but if we do that every few months, it saves us a couple hundred dollars. Certain times of the year, they quadruple the points. If you keep up on it, you can save tons of money on gas. It also helps us budget some of our “treats”. If I buy a $15 Starbucks card for me to get my fix, after my card is empty, there’s no going back until I get another one on payday. We get a discount from Office Depot through our AMWAY account, so we buy our TP, aluminum foil, etc in bulk through there and get a gift card at Kroger for the approximate amount we usually need. We also do the same with our coffee/espresso and syrups from Starbucks website so we get a card for that as well. If we know we are going to use it anyway and spend the money there, we might as well get the benefit of the fuel savings!
We also don’t use many paper towels. It doesn’t save us 1000’s of dollars, but since we started making a point to use old rags and only use cloth napkins, we’ve cut back to only using a case of paper towels a year. I didn’t realize how many paper towels we went through, but it was insane. We didn’t go purchase most of the napkins, but used scarp fabric and sewed the edges. I did find some on clearance at Ollies 4/$1. I made sure I had enough to last me through each night of the week, plus a few extra, so all I have to do is throw them in the wash all at once.
Meal planning and freezer meals have saved our budget. Buying in bulk. Dry rice and beans instead of canned has saved us a lot. We keep some canned just in case we need them in a hurry.
Love your post!
Stacey aka the Soccer Mom says
Wow! These are wonderful tips Elizabeth! Thank you for sharing! We also buy gas at Kroger, but I really do need to take advantage of the double and quadruple points when purchasing gift cards.
Connie says
I implemented an allowance for both me and my husband. When we were first married it was so easy to overspend. Now we live on his income. We own our vehicle’s, so we have no car payments. We grow a garden and harvest a lot of the veggies for use throughout the year. We have three kids so every August is a tight month. However learning to budget and get on top of the bills has helped us immensly.
Stacey aka the Soccer Mom says
Yes! So important to prioritize bills and plan ahead for months when spending more is a necessity (like for school clothes/supplies). Thanks for sharing Connie!
Barb Destin says
The big three expenses for most people are home, transportation and food. Without addressing the first 2 it is hard for me to decide if I should be impressed by your year’s expenditures.
A $30000 a year budget for a family who has their house and vehicles paid off and who doesn’t have to commute is unspectacular but would seem impossible for someone who has a mortgage, car payments and commuting cost
.
Stacey aka the Soccer Mom says
I would actually be very impressed by someone who had their house paid off by 30! 🙂 Housing is still our #1 expense. We also have one car payment. I work from home, but my husband drives to work.
Barb Destin says
A quick google says that the average mortgage payment for the average 30 year old American is $950 and the average car payment is $503. You note that you spend about $600 for food. If you add those up and multiply by 12 you get more than $24000 so you can understand why other average 30 year olds might be looking at their own budgets and saying “If we only spent $30000 a year that would leave us less than $500 a month for other necessities like property tax, utilities, insurance (car, home, life and health), other car expenses (fuel, registration and maintenance), gifts and charity.”
I suspect that the real explanation for your relatively low budget is not the (comparatively) nickle and dime expenditure cuts mentioned above but on the earlier decisions you made about the really big ticket items i.e. housing and transportation. And that might be worth a blog article. In the meantime I can recommend the Flannel Guy’s well illustrated article on the subject. http://www.flannelguyroi.com/the-trimurti-of-household-budgeting/
(P.S. We didn’t pay off our mortgage by the time we were 30 but, with 2 children and one very average salary, we did pay it off in less than 8 years.)
Stacey aka the Soccer Mom says
Hi Barb- You are correct in your assumption that we made conscious decisions regarding housing/cars. One: we live in a very expensive area that has been going through a real estate boom over the past few years. We actually decided to rent until the market drops back to reasonable prices. So property taxes don’t figure into our budget.
Conversely, we do not lease vehicles and instead pay as much down at purchase time, and then pay them off as soon as possible. A $500+ car note is not what I would consider a responsible buy — that would be over the budget for sure!
When our income was at the level in this article, we did get subsidized health insurance (neither of us ever worked in industries that provided this benefit). Now that our businesses are both running, health insurance is a MUCH MUCH larger part of our budget. Living on a lower income than what we were used to absolutely took dedication and discipline, but it IS possible.
Amie says
I just wanted to add that I have a dog that I absolutely love to spoil but she can only eat lamb. I don’t mind paying for the food but the treats were ridiculous. I found another brand of lamb dog food with meaty center for like $20 for a big bag. I give her 5 in the morning and 5 in the afternoon. She doesn’t notice it’s not really a treat because to her it is different than her original food. I have saved so much money doing this and we’re both happy
Sherry W. says
Not sure I would consider this a budget tip, but it is a GREAT idea. Though for sure work it into your budget every month. Every payday buy a $25 gift card. To Walmart or Kmart…somewhere that doesn’t depreciate over time. Then tuck it away in your safe and forget about it. If you get paid twice a month like most people do you will have $600 worth of gift cards at the end of the year (CHRISTMAS!). If you can’t afford to do it twice a month, then do it one paycheck a month. That is still $300. Of course if you have things come up like weddings and birthdays through out the year you have an instant easy gift. If you have a paycheck that is just not as big as you expected it to be then you have a little help with groceries. This is a great system.
Stacey aka the Soccer Mom says
That’s a great idea! Thanks for sharing! (I might try your gift card system in the weeks leading up to Christmas!)