If you are a stay-at-home mom or want to become a stay-at-home mom, then you are probably thinking about how to create a budget as a stay-at-home mom. I mean, let’s face it: stay-at-home moms typically do not contribute to the family income.
So, finances are often a concern. With limited income, budgeting becomes pretty crucial.
I’ve been a stay-at-home mom for seven years now. That’s a long time! 😂 🤣 And even though I’m no financial expert, and have made many financial mistakes in my lifetime, my husband and I have still somehow managed to provide for our children on one income.
How do we do it, on his blue-collar income? Easy. We budget. We spend very little. And we take on no new debt.
So, in this post, I’ll walk you through how to create a budget as a stay-at-home mom. My process is very simple, very easy, and not at all rocket science. I’ve been doing it this way for years – long before I was a stay-at-home mom, and long before I ever heard of a “zero budget”. 😂🤣
(I’m “old school” and I love it when they package an old way of doing things up in a pretty little box and slap a fancy new label on it!)
So, grab a cup of coffee or a glass of wine momma! And let’s get to it!
How to create a budget as a stay-at-home mom
To create a great sahm budget, you need t know how much income your household brings in, how much your monthly bills cost you, and how much you spend on everything else. You want to spend just as much as you make. Not more. 😉
You can spend less than you make, of course. But if you do, that money goes into savings, allowing you to arrive at that ‘zero budget’ everyone is talking about. 😆
Le’ts walk through it.
#1: Figure out how much money your household brings in every month
When you create your family budget, gather up all of your consistent income sources. These will be things like your husband’s salary and wages, profit from your business IF it is steady income that you know you can rely on every month, and things like rental income.
For example, we don’t count my income as a freelance writer in our family budget. My income is so inconsistent that it makes it hard to rely on it.
If you have sporadic income from a side gig as well, I wouldn’t count it. But if your business brings in regular income, then count it.
Possible income sources:
- Husband’s salary
- Any business profit or revenue that is consistent
- Regular reimbursements you receive
- Any rental income you receive
- Regular dividends or interest earnings you receive
- Social security or disability payments
- Pension payments
- Child support or alimony – again, only if they are paid consistently
Add up all of your household income
Now that you have all of your income sources, break it all down to the monthly averages. If you receive lump-sum payments of any kind, like a yearly dividend check, you can disregard it entirely or you can break it down monthly.
I would recommend that you disregard it entirely. Any income that does not come in on a regular monthly basis is really hard to budget and work with. Just set these sources aside.
You’ll do something else with them later, that we will talk about in another post, such as pay down debt, save or invest.
In fact, I like to consider these types of incomes and any other money that somehow manages to fall into our laps over the course of the year, as ‘windfalls’, and I talk more about them in this post.
Add up all of your monthly income sources to get one monthly total. This is how much money your household brings in every month. And it is the number we will work with to create your budget.
#2: Figure out how much you spend every month on bills
There are two types of expenses: fixed and variable.
Fixed expenses are expenses that stay the same month after month. These are things like your mortgage, your car payment, subscription payments, and phone payments.
Variable expenses are usually things like utilities, heating, food, gas, entertainment, etc. These expenses change every month, based on your household consumption.
Fixed expenses to consider:
- Mortgage or rent
- Car payments
- Credit card payments
- Personal loan payments
- Student loan payments
- Insurance payments
- Phone payments
- Satellite or cable payments
- Internet payments
- Subscriptions to things, both online and offline
- Water and garbage payments, if they are the same every month
Any expense you have that is a regular, fixed expense – that is the same every single month, can be listed here.
Once you have them all listed out, add them up.
#3: Then, figure out how much you spend on everything else
After you figure out how much you spend on fixed expenses, you need to figure out what your variable expenses are.
Since variable expenses are different every single month, this takes a little investigative work on your part – or guesswork, depending on how much work you want to put into this initial budget.
Because, if you’ve never created a budget before, or if you are going from working out of the home to becoming a SAHM, then this first budget is really just going to be a tool for future financial planning.
It’ll be a starting point, to use as a guide, until you solidify your budget a little bit more.
I like to break my variable expenses down into two categories: regular variable expenses, and all the rest. 🤣 😂
Real scientific, right?
Regular variable expenses to consider
Regular variable expenses, in my eyes, are things like your electric, heat, and utility bills. These are things you have to pay every single month, but the amount always varies.
They are usually around the same every month, give or take a few bucks, but still, you can’t say things like, “my electric is $250 every month”. Because sometimes it might be $300.
Your variable expenses might be:
- Electric bills
- Heating costs
- Utility or water bills
- Credit card payments can be variable, if you pay off what you charge every single month
- Medical bills
List these bills out and apply an approximate cost to them. If you have old statements or a way to go online and get a monthly average, then do it. The more accurate you can be, the better. But if you do not, go ahead and just guess.
And then add these expenses all up together as well.
#4: Subtract your bills from your income
I know, I know, we don’t have all of your expenses in there yet. I get that. What you should have is a list of every bill you pay – both fixed and variable – during the month. If you are missing a bill, go back and add it in.
Then, add up your variable expenses and your fixed expenses, so that you get a fairly accurate measurement of what goes out of your house every month for your bills.
Next, take that expense total and subtract it from your monthly income. What you have left is the number that you get to work with for all other expenses.
So, if your monthly income is $5,000, and your monthly bills are $3,200, then you have $1,800 left, to apply to your remaining variable expenses.
#5: Figure out how much you spend on expenses that are not monthly bills
This is where you list things like groceries, gas, and entertainment. These are not monthly bills that you pay, but they are still expenses that you have to cover.
What I like to do is list out all the expenses we have that are not a monthly bill, and then assign an approximate value to each one. For example, maybe we spend $600 on groceries, $200 on gas, and $100 on entertainment.
Consider variable expenses such as:
- Groceries
- Gas
- Entertainment
- Gifts
- Charity contributions
- Car repairs
- Household maintenance and repairs
- Clothing costs
- School expenses
- Household expenses
- Medical copays
- Savings
After you have your list, then assign approximate values to them.
Once you do that, add up those numbers and subtract the sum from what you had left, after taking out your monthly bills.
Do the numbers add up?
If so, awesome!!! You have what we call a balanced family budget.
But if it doesn’t balance out…if you have more expenses than income, then you are in trouble. And you need to go back to the drawing board.
#6: Keep working with the numbers until you arrive at zero
Say, for example, that you have $1,800 to work with. But your groceries cost you $600, your gas is $200, clothing is $200, you spend $100 on school expenses, $100 on gifts, $200 on household items, $200 on repairs, $200 on entertainment, and you put $100 in savings.
You only have $1,800 left after all of your bills are paid, yet your expenses are still costing you another $1,900. You are $100 in the hole.
When that happens, you have to go back and cut costs somewhere. And in this case, you’d have to only cut $100 from your budget – which is actually good! Way better than cutting, say, $800!
I like to start with those variable expenses that are not monthly bills when I have to cut costs. So I look at things like my clothing expenses, how much I set aside for household items and how much we spend on entertainment.
If you find your budget doesn’t balance, start there. After that, if it still doesn’t balance, then you need to try to cut costs with your regular variable expenses, and if it still doesn’t balance, then you move on to your monthly bills – those fixed expenses.
Really, that’s all you do. You keep cutting and working with the numbers until your budget balances.
If you have more expenses than income, the best place to start cutting is those variable expenses that are not monthly bills. The last category of expenses we covered. They are the most flexible and the easiest to cut back on, in a pinch.
But you have to be careful not to overdo it as well.
There’s been times when I’ve created my budget, and we’ve had to pull really tight, and I’ve said, “Yup. We can live off of $400 for groceries this month.” 🤣 😂
Um, no, we can’t.
It’s a rookie mistake.
Don’t set yourself up for failure like that either. If you know your family of eight cannot possibly live off of $400 for food, then find another place to cut expenses.
Sometimes, this means making some really tough decisions. Sometimes, there is very little room to cut, and you have to take a look at all of your monthly bills.
I’ve been in situations where there was absolutely no wiggle room in our variable expenses. We were already living on bare bones and couldn’t possibly cut anymore. So, then you have to start looking at the bills you pay out each month.
And when that happens, you actually have to go into crisis budget mode.
But I’ll talk about that in another post on another day. 😁
Budgeting templates
I actually don’t currently use a spreadsheet, program, or template of any kind to write my budget on. I just write it on a piece of paper. It’s pretty easy to do.
Happy budgeting! 😁
At the end of the day…
I know this is a really simple way of creating a budget. But it doesn’t have to be rocket science! Just start with your income and keep subtracting expenses, until you have zero dollars left. If you have more expenses than income, go back and cut.
You need it to balance, and you need it to be a budget you can honestly live with. Because if you feel at all like it is too restrictive, you won’t follow it. Your budget should leave you feeling more in control of your finances, not less.
More on managing your money as a Sahm
How to Survive on One Income as a Sahm
How to Save Money on Groceries as a Sahm
The Best Side Hustles for Sahms
