How Our Annual Budget Meeting Prompted Big Changes

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We knew that we were going to make some changes to our lives with the New Year approaching. But we weren’t sure what our plans were, financially, until we had our annual budget meeting. And that is where things got interesting!

Annual Budget Meeting

Last year, we decided that we needed to sit down and start doing a monthly budget together, since we had been a blended family for over a year at this point. I used to do them for many, many years when I was married and while I was a single parent. But for some reason in 2015, I stopped. I think a lot of it had to do with me being in my last year of Grad school and working multiple jobs. I just didn’t have the bandwidth to keep up and it fell by the wayside. Big mistake!

So we had a discussion about picking it back up and began to do so in July of 2017. But, when we started doing the budget, the first few months were a real challenge. We had a difficult time sticking to the budget in multiple categories. At the end of the 3rd month, we decided to switch up WHEN we had our meetings in hopes that would help. So instead of having a meeting once a month, we changed our meeting to every Sunday.

I have found that it is much easier to course correct if we are looking at the numbers more often instead of just at the end of the month. So that is tip #1!

With regard to our end of the year annual budget analysis, each category had to be weeded through in depth. The way I have my budgeting spreadsheet set up (I LOVE spreadsheets, by the way!) is that each month has it’s own tab and there’s a year end final tab with the monthly averages spent.


Here are the categories that we use on our budget spreadsheet:

  • Income
  • Bills
  • Auto (anything car related, including gas, insurance, car payments, taxes, service appointments)
  • Food/Drinks (this is groceries plus beer and wine)
  • Household (anything for the house including cleaning supplies, hygiene products and home projects)
  • Clothing (this also includes shoes)
  • Gifts
  • Luxury (this is anything that is not a necessity including eating out, drinks with friends, trips, fun classes, shows, etc)
  • Misc (anything that is a random one off)

What we were trying to analyze were the averages of each category to see where we went wrong.

Where we went wrong

To begin with, we had budgeted $4340.00 as the total expenditures across all categories last year. That seemed pretty doable, even for a family of 7. But, here is where we get to the issue. The actual average of what we spent monthly was a completely different number. This number came in at $6202.00! So what in the world happened?

Well, when we dug into it, here is how each category broke down:

  • Bills:                   Budgeted – $2100.00   Spent – $2313.00
  • Auto:                  Budgeted – $900.00     Spent – $1241.00
  • Food/Drinks:      Budgeted – $700.00     Spent – $874.00
  • Household:        Budgeted – $300.00     Spent – $574.00
  • Clothing:            Budgeted – $50.00       Spent – $109.00
  • Gifts:                 Budgeted – $40.00        Spent – $120.00
  • Luxury:             Budgeted – $200.00       Spent – $746.00
  • Misc:                Budgeted – $50.00         Spent – $82.00

As you can see, every category was completely shot!

Remember though that the caveat was that we didn’t start the budget until July last year. So, these numbers are only based on 6 months of numbers. That being said, I still want to break down what went wrong, in our analysis.


The bills category was blown because I was paying for the rest of Reese’s braces, which is now complete. We also had some emergency dental work, which insurance didn’t completely cover. In reality, the dental insurance is junk and barely covers anything, sadly. So that shot the bills category.


We both had to pay our car property taxes, renew the registrations and have 60,000 mile services done on our vehicles in that time frame. So the auto number may actually be right in line with our $900.00 budget this year once we have a full 12 months of numbers.


We really struggled with this category a lot because there are 7 of us. We are not only creative with food, but I have been making delicious, nutrient dense food on a budget for years. So that isn’t the overall issue. The issue was alcohol. That is what killed us.


The kicker in this category was that sold our primary residence last April and bought another house. While the new house was move in ready, there were still things that we had to do it when we moved in. The in-ground pool was a big money suck while we tried to figure out how to make it work. We finally did and turned it into a healing pool, but it cost us a pretty penny to figure it out.


We actually don’t purchase clothes that often. But of course, towards the end of the year all of the kids needed multiple things. So even though we didn’t purchase anything in this category the first 6 months of the year, the last 6 months is what did us in.


We had the same issue here as with the clothing category. A lot of family birthdays and the holidays destroyed this one.


This category has been another continual issue for us. Part of that was a trip we had planned to South Africa and taking my kids on summer vacation to New York City, Niagara Falls and Baltimore. But the majority of it was us just going out for food and drinks with friends when we didn’t have the kids.


This category was really just an anomaly from one month. During that month we catered a wedding and had to pay our staff for their help. We also had a friend do some projects around our house so that she could earn some more money for her year of traveling. With the exception of that month, everything was on track.

New Year, new budget

Now that you can see where we went wrong, it should be obvious what we decided we would work on. Our food/drinks budget and our luxury budget were the main culprits, so something had to change. We looked at what we were bringing in and what our bills were and decided that we were simply out of control.

Yes, we have still been putting money in savings and retirement and we even started getting into real estate investing. That being said, we were still spending way too much money monthly!

What we decided is that we needed to change our budget in all categories to a grand total of $4600.00. Therefore, our goal is to stick to this number, thereby reducing the average amount we are spending by $1602.00. We feel like this can be done if we make some changes to how we are doing things.

Budget Tweaks

That being said, it only made sense to look at each category and figure out the best way to feasibly change what we had budgeted. Here is how the new monthly budget breakdown looks:

  • Bills:                   2017 Budget – $2100.00   2018 Budget – $2100.00
  • Auto:                  2017 Budget – $900.00     2018 Budget – $1100.00
  • Food/Drinks:      2017 Budget – $700.00     2018 Budget – $800.00
  • Household:        2017 Budget – $300.00     2018 Budget – $400.00
  • Clothing:            2017 Budget – $50.00       2018 Budget – $75.00
  • Gifts:                  2017 Budget – $40.00       2018 Budget – $75.00
  • Luxury:              2017 Budget – $200.00      2018 Budget – $400.00
  • Misc:                 2017 Budget – $50.00        2018 Budget – $50.00

As you can see, two of the categories stayed the same and two of them only increased slightly. But the major tweaks were in the categories that we continually have issues with.

The Changes

  1. Not only are we better at handling the pool, but the major things that needed to be done to the house are complete. There are a few other minor projects, but nothing that will even come close to our monthly budget.
  2. For our food budget, we increased it to $800.00 and discussed how to decrease the amount of money we spend on alcohol. With us being more cognizant of this continual issue, we are confident that we can change our spending here.
  3. In the luxury category, we have decided that we will only be going out once a month to meet with friends for food and drinks, if that. We also will only be doing one international trip this year, which is to Jamaica this month with my family. We already paid for the plane tickets last fall, which was another reason that category was blown last year. Therefore, the all inclusive hotel should be the only other cost associated with this trip.
  4. We are going to focus hard to get the rest of Bryan’s marital debt gone by the end of the year. Paying off this debt faster means that we will free up more money to start really attacking his car payment. Once we get rid of those things, we will only have our primary mortgage to contend with.

The Takeaway

Now that we have a game plan, we are pretty excited about how this year will go from a budget perspective. We know that we can do it if we really remain fully conscious of our spending and what is really important to us. After all, if I could survive on only $800 a month plus food stamps as a single parent of 2, then we can do much better than this.

Not only that, but we are really investing a lot of time and energy into changing our lives for the better. Stay tuned for the next article where I reveal what our grand plan is for 2018!

Did you go through your budget for last year and make any changes for this year? If so, what were they and why?