Two years ago, I left my full-time job when my husband’s job gave us the unique opportunity to move to Bavarian Germany for a few years. Travel the world or work the 9-5? The decision was easy, but the budget ramifications were not. How, exactly, were we going to live on a single income?
Fast forward two years, and we’ve had our first child. We’ve traveled around Europe on long weekends and holidays, and we’ve made two trips home to the U.S. We’ve adopted a second dog, we’ve moved into a larger home and we’ve still managed to save more money each year than we did before I left full-time employment.
Before I left my job, we spent money more freely because we could afford to. Afterward, we buckled down because we needed to. Last year we put approximately 60% of our income into long-term savings and investments, and we’re on track to do the same this year.
The trick? Our family’s Epic Google Budget Template, which you can download for yourself right here.
Our budget rules might be simple, but the results are astounding; at the end of last year, we’d saved $6,000 more than we’d hoped to save! Here’s how we do it:
1. Track Every Expense
Every expense goes into the budget. Every last penny. If we spend two dollars on parking, we track the expense. If I buy a three dollar cup of coffee, it goes into the budget. No expense is too small to account for.
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2. Keep All Receipts
When either of us is asked the question, “Would you like a receipt?” the answer is always “Yes.” The receipts go into a stack on our kitchen counter, and every few days I enter those receipts into our budget template.
The template’s built-in formulas immediately show us how each expense affects our actual spending versus our budgeted spending — for each category, for the month and for the year.
There are probably smartphone apps out there that would help automate this process for us. However, we’ve saved more than $1,200 a year by ditching our data plans, so it’s worth it to us to manually enter our expenses.
3. Strike a Balance
Sometimes we overspend in a single month in a single category. When that happens, we try to stay under our spending limits in other categories. The idea is that if one category goes over our budget, we can keep things balanced by remaining under budget in other areas.
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Take, for example, hosting Thanksgiving dinner for eight hungry expats and baking for two community fundraisers in the same month in 2014. Our grocery budget was maxed out, so we didn’t spend much on personal things like clothes or travel. At the end of the month, we were able to balance things out.
4. When the Month Doesn’t Balance, Look at the Bigger Picture
The exception to the monthly balance rule is this: If the month doesn’t balance out, be sure the year will.
A perfect example of this is our airfare for an upcoming trip to the U.S. The cost of our flights tipped our monthly budget upside down. We still tried to limit other, unnecessary spending that month, but the baby needed diapers, the dogs needed food and there were other expenses we simply couldn’t avoid. We overspent.
When the monthly budget just isn’t going to balance, look at the bigger picture: your annual spending. If you can still balance the year, then you’re doing okay. If not, then you need to either tighten your belt or re-think your long-term savings and investment goals.
5. Remember It’s Not a Diet
This has probably been the most important part of making our family’s Epic Google Budget Template work for us: The budget is helps us monitor portion sizes without completely changing our diet.
We still indulge in nice things. We each have a personal spending allowance category in the budget each month, but because we rarely max those allowances out, we can occasionally splurge on a higher-ticket item.
When you eat healthy most of the time, that decadent chocolate volcano lava cake doesn’t tip the scales. Your family’s budget operates the same way; keep it in balance more often than not, and you can afford the occasional splurge.
We Saved an Extra $6,000
Our Family’s Epic Google Budget Template helped us put away $6,000 more than we expected to save last year. We used our savings to pay for an unforgettable experience: A weeklong trip to Tromso, Norway to see the Northern Lights. The memories we made in Norway were worth every dollar we tracked in our family budget last year.
Hoarding pennies doesn’t have to mean living poor. Steal our family’s Epic Google Budget Template, follow these five simple rules, and see if your family can save a little — and splurge a little — this year.
Your Turn: How do you track your family’s expenses? How has it helped you stick to your budget?
Melissa Gilliam Shaw is a freelance writer and marketing professional and the creator of MilliGFunk: a travel, healthy living, and DIY blog. You can find Melissa on Facebook, Twitter (@MilliGFunk), Pinterest, and LinkedIn.
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