508: Budgeting Tips for Families Living on ONE Income

0:00Today, we are going to talk to a stay-at-home parent about how she structured her family's finances and took control of her family's spending to enable her to be a stay-at-at-home mom. Yeah, I think there's a lot of folks out there who have the dream of being able to become a stay-at-home parent at some point in their lives. But to realize that dream, in many cases, that aspiring stay-at-home parent must still find a way to contribute meaningfully to household finances, often in the form of controlling expenses and financial planning. And that's in addition to the other many contributions that stay-at-home parents make in the form of managing the household, raising children, and much, much more.

0:36So if you or your spouse wants to be a stay-at-home parent, this episode will show you how to make that financially possible. And for that, we've brought in Emmy Lee, a budgeting guru. Emmy tightly controls her family's spending and embraced that role after a conversation with her future husband. Her expertise in careful planning and budgeting allows her family to live off of one middle class income. Hello, hello, hello, and welcome to the BiggerPockets Money Podcast, my darling listeners. With me today, as always, is my dear co-host, Scott Trench. Thank you for that very sappy intro, Mindy. Get it?

1:14Sappy? Stay-at-home parent? All right. We're here to make financial independence less scary, less just for somebody else, to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. Emily, welcome to the BiggerPocketsMoney podcast. I am so excited to talk to you today. Thank you. I'm so excited to be here. Let's jump right into the background with you with regards to your money story. How were you brought up talking about money, your relationship with money as a kid? Yeah. So growing up, my parents didn't really talk too much about money.

1:48My mom gave me a couple of pieces of financial advice. She told me that my very, very first paycheck, I could just spend it all, literally every penny. And then she also told me to avoid credit cards like the plague. So, yeah, I didn't really know too much. It wasn't until I met my husband that I started learning more and more about finances and why they're very, very important. What about like, did you tend to be a saver? Did you tend to spend everything when you were growing up, maybe working like high school jobs or whatever? Like what was your kind of natural inclination? It was definitely to spend everything.

2:22If I had$5 left in my bank account, I was at the bar with the beer for$5. It was all gone. And yeah, I never really was taught to save too much. I think that first paycheck that my mom told me to go blow just kind of carried over through the rest of my paychecks. But I was also in college. I wasn't really making all that much, but it wasn't to save. It wasn't to be smart with it. So good times. And so what triggered the change? What triggered the change to like becoming this, you know, budget savvy professional? And what led up to that? I hate to give my husband all the credit here, but that really was him.

3:01He taught me so much. His family did talk about finances and they talked about credit cards and he had a credit card going into school. So he knew a lot more than I did. So when we got together, he taught me a lot on our very first date. I told him that I wanted to be a stay at home mom. Like that was my dream. I want to be a stay at home mom. But you can't be a stay at home mom if you're not budgeting and managing your finances correctly. And so it kind of like dawned on me that if I want to be able to live my dream as a stay at home mom, I'm going to have to figure this budgeting thing out. And I figured out how to be frugal and to save money and work on a budget.

3:37And we lived off of one income. Even when I was working, we would just stash all of my money into or all the money that I was making, it's our money, right? All the money I was making into a savings account and worked on paying off debts. And then so when it came time for me to become a stay-at-home mom, I was really able to just do that. So that was kind of what clicked. I was like, hey, wait a minute. I'm going to have to get a grasp on this if I want to live out my dream of being a stay-at-home mom. This first date conversation that you had here, which is so awesome, where it sounds like what I'm gathering is you said, that's what I want to do.

4:13But then you had a self-actualization of, oh, and I'm going to throw out some terms here. You can tell me if I'm close or not on this, but hey, that might come with a lack of, in finance terms, offense in income generation. So I better get good at defense in order to make that possible. Is that kind of a way to frame what was going through your head at that point in time? Yeah, definitely. You can't just roll on nothing. So you have to be able to budget to be able to do what you want to do. And for me, that was being a stay-at-home mom. Awesome. And you mentioned that while growing up, you would come into a couple of dollars.

4:44It was being spent on that. What changed following this? What was the process you undertook or how did you begin the journey of becoming good at budgeting to get to where you are today following that conversation? I mean, the biggest piece of it is your mindset. Like that's truly all of it. I know that's like such a blanket answer. But once you can switch that switch in your head, it, you know, you see a dollar and you say, Okay, well, I can either save this and we can pay and we can use it to pay off, you know, whatever, so that I can become a stay at home mom later, or I can use this dollar and go buy something that's going to fill my house.

5:20And then I'll probably donate it later. Like it's just a mindset shift. And that's what I needed. I'm very much like driven by what I want. And I wanted to be a stay at home mom. Awesome. And so what, what in practice, I love the mindset shift. How did that translate to what you spent on or, you know, did you, did you immediately stop, you know, ordering takeout? Like what, what, what did that translate to in terms of like the way that you conducted your, your daily expenses or monthly planning process? Well, the first thing we did was set up a budget and really like look at the money that we were bringing in and then categorizing it and figuring out how much we can spend in groceries and take out in random shopping trips.

6:00So many people go from from spending, well, now I have to be on a budget and I resent it. Yes, yes, yes. I think that's like a lot of people when they hear the term budget, they they think restriction, they think and that's not it. It's spending within boundaries. I think the biggest thing for me was like not having the conversation around money growing up didn't give me structure for spending when I was in high school and in college. So it was almost like I was ignorant as far as like spending money. It was money coming in, money coming out, money coming in, money coming out. And then I met my husband and he's like, whoa, whoa, whoa.

6:34You know, if you want to be a stay at home law, we can't do that. Like, let's let's figure out our budget. Let's figure out the money coming in, figure out where it's going to go so that you can do that so that we're not living paycheck to paycheck. We're not taking out debt. We're not, you know, and getting into that spending mindset. The$150 trips to Target became a one item thing. If I need to go to Target for, at the beginning of our marriage, it wasn't diapers. But now if I need to go to Target for diapers, I'm going to Target for diapers. I'm not going to Target for diapers plus$300 worth of other things.

7:08So it's just really that focusing in on what you have and not versus what you want. You don't go to Target for what you want. You go to Target and Target tells you what No, no, no, no. We don't want to hear that. No, no, no. No, no, no. You're absolutely right. Nobody goes to Target for$300 worth of stuff. They go to Target for one thing and they come out with$300 worth of stuff. And that's really, I mean, Target really sucks you in. Yeah, they do. But it's that mindset and kind of like, no, I'm not going to do that. You know, like that's what you want. We are taking a quick break. Once we're back, Emmy will break down her biggest spending and budgeting tips.

7:44Support for BiggerPockets money comes from Northwest Registered Agent. Your business identity is everything that shows what your business is about, from what customers see to what they don't see, like operating agreements, meeting minutes, and compliance paperwork. Get more for your business, more privacy, more guidance, and more free resources with Northwest Registered Agent. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They are the largest registered agent and LLC service in the United States with over 1 ,500 corporate guides, and they have real people who know your local laws and can help you and your business every step of the way.

8:18Don't wait. Protect your privacy, build your brand, and get your complete business identity in just 10 clicks and 10 minutes. Visit northwestregisteredagent.com slash moneyfree and start building something amazing. Get more with Northwest Registered Agent at northwestregisteredagent.com slash moneyfree. My husband and I have multiple investment accounts across several different companies. Throw in vehicles, investment properties, and private equity holdings, and it can be difficult to get a good idea of our actual net worth. And frankly, between the kids, work, and just life in general, I don't have time to be logging into 47 different places.

8:50So I just didn't. Scott walked me through setting up my Monarch account and suddenly everything was easy. It's all in one spot so I can check in quickly. Just like everything else on Monarch, the dashboard is customizable so I can see at a glance what's most important to me and dive deeper when I need to. Feel organized and confident in your finances with Monarch an all-in-one personal finance tool that brings your entire financial life together in one clean interface on your laptop or your phone. And right now, just for our listeners, Monarch is offering 50 % off your first year with code pockets at monarch.com.

9:26Don't let financial opportunities slip through the cracks. Use code pockets at monarch.com in your browser for half off your first year. That's 50 % off your first year at monarch.com with the code pockets. Support for the show comes from Public, the investing platform for those who take it seriously. On Public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets, which allow you to turn any idea into an investable index with AI. It all starts with your prompt from renewable energy companies with high free cashflow to semiconductor suppliers growing revenue over 20 % year over year.

10:02You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds you a one-of-a-kind index, and lets you backtest it against the S &P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your thesis, not someone else's. Go to public.com slash BPM and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash BPM. Pay for by public investing. Brokerage services by Open to the Public Investing Incorporated. Member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC registered advisor.

10:40Generated assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com slash disclosures. And we're back. Before the break, we spoke to Emily about her own journey as a stay-at-home parent. We're now going to dive into her work as a budget coach and her biggest tips to sticking to a budget. We don't really talk about self-control on this show, but you You have to exercise some self-control. You had a goal. I want to be a stay-at-home mom. I also had a goal of being a stay-at-home mom.

11:15Once I started having kids, I wanted to be with them through kindergarten. I wanted to be home with them so that I was raising them when they were little. And then once the youngest went back to school or started school, I started work. And that worked out great. But it also took some preparation. and I had to exercise some self-control. I didn't go on these massive vacations and I didn't buy every fabulous piece of clothing that I found. And I didn't have the latest phone and a nice car and all of these things because that didn't matter to me. It was easy to give those things up because I wanted to stay home with my kids.

11:53I happened to have a super low paying job. So it was also really easy to quit that when I had my first baby. But did you feel any restrictions once you went from spending the entire paycheck to saving. When I see budgeting, I see like, okay, what brings you joy? For me, that's stopping for coffee. I love to stop and get a coffee. So we figured out how to factor that into my budget. I go in and get one coffee every week instead of one coffee every single day. So with that, you're still getting the things that you want. You're just within a boundary. You're not going every single day. You're going once a week.

12:29And so that helps with that restriction. You figure out what you value in your budget. For me, that was getting a coffee. If it's a designer handbag for somebody, then let's sweet. Let's work that into your budget. And that will help you not feel restricted. You just said a nice phrase. Let's work that into your budget. Your budget isn't about removing everything that's fun. It seems to me that the Gen Zers are way more interested in personal finance, budgeting, investing, all that kind of stuff than the millennials were. Relative to when I tried to buy my first house hack, nobody was talking about that stuff 10 years ago.

13:07Now, whenever I talk to a Gen Zer that's interested in those kinds of aggressive wealth accumulation, all that kind of stuff, it seems like five of their friends are also into it alongside of them. Are you noticing that's true as well? Is that a trend or are Gen Zs just bad with money too? No, no. Have you heard of loud budgeting? I have now. So that's a new trend on social media. And I'm like, yes. People are saying, I can't go to dinner tonight because I'm saving up for a trip to Europe. Or I can't go to dinner tonight because I want to buy this handbag. They're talking about their money and why they're budgeting and why they're not spending.

13:41It's called loud budgeting. And I'm like, I'm here for it. So yeah, I definitely see a bit of a shift of that. More people are becoming more interested and are showing it more on social media. So what questions do you get the most from folks that haven't been educated on this? What do people come to you with to try to learn? Well, my clients, for the most part, come to me because of their spending. But as far as questions go, I get a lot of questions about groceries is a huge one. I get questions on people who have variable incomes is another big one that I see a lot. So people that don't make the same amount every month, that's really difficult to budget with.

14:21but the spending is like the biggest part of what people come to me and what I advise and help people with is their spending. What are some of the things that they're struggling with spending on? A lot of it is just emotional spending. So the trips to Target and Amazon and you know I when I get a new client I do three months worth of their spending which is a lot but when I give them their budget, they've got three months of numbers and numbers don't lie, they're going to tell you exactly what you're spending your money on. And it's like, they're quite shocked by it, for the most part, but that shock kind of gives them the fuel to like, you know, take control and make changes.

14:59But it's that it's the spending that's or the emotional spending is what I see a lot of. So how can we give advice to our listeners who may be stuck in emotional spending patterns? How do you overcome that? How do you stop that and switch into more of a saving mindset or less of a spending to what's it called? Retail therapy? Did you see that? I tried not to eye roll, but I roll away. I hate that phrase. I do too. Me too. And me too. Yeah, it's, it's tough, because you really have to get a grasp on how you're feeling, right? So before you go out of the house, ask yourself, like, how are you feeling today?

15:44Are you PMSing? Are you stressed? Are you feeling sad? Are you feeling really excited? Like truly understanding why you might go out, make a list. I'm a list maker through and through. I love my lists. Make sure you have a snack and some water and then go out. And it's truly like once you see it on paper, once you see it on your budget, it gives you that fuel to make the changes. What about with grocery shopping? I know that's another area that you are an expert in. What kind of tips do you have there? And how do you maintain your own personal budget? So our monthly grocery budget is$800. And I get comments all the time that that's really high.

16:27That's really high. Yes, we probably could make it lower. I know, right? We could probably make it lower. But with$800, it seems to be a good balance of getting food and saving money. Because what we don't want to do is just buy like the bare minimums, the bare basics, and then we're left craving. And we're going to go try and fill that void with fast food or with shopping, like we have to feel fulfilled in what we're eating and nourished at home. So yeah, the$800 budget is for our family. We have two smaller kids. So that's something to keep in mind. We have a two year old and a four year old, so they don't eat a whole lot when they get older.

17:09I'm sure you'll have to raise it. I have a one and a half year old kid and she has a bottomless pit for food. So I can, yeah, I don't, yeah. The young kids can still, you know, take down a lot. So if you make dinner, does she eat like the same dinner that you guys are eating? Some food she's not quite ready for, doesn't have the teeth to really handle them. But where we can share, we do. Yeah, that's a big money-saving tip there is to have your kids eat what you're eating. Because if you're making two meals every meal, that's going to add up really quickly. And with kids, snacks and drinks, those all add up really quickly too.

17:45Some other tips for saving money on groceries, shopping in bulk and freezing a lot. There's so much that you can freeze that you probably don't realize, like meats, cheeses, milk. You can freeze milk, bread. There's so much. Buying in bulk from Costco. We do one big Costco or Sam's Club trip a month. And then every week, we just buy food to fill the void, fill what we're needing for recipes. But buying in bulk, shopping seasonally and shopping locally, having your kids eat what you're eating. Those are all good ways to save money on your groceries. Is there a ratio you recommend people using to split their income between groceries and rent and fun and savings, etc?

18:30Yeah, there's a lot of different ratios out there. I personally, we use the 50-30-20 rule says that 50 % of your net income goes towards your needs, 30 % goes towards your wants, and then 20 % goes towards your debt repayment and savings. And that's just like a good guideline. Like there are so many different ones out there, like the pay yourself first. I don't even know so many. You just have to figure out what kind of works for you. But we use the 50-30-20 rule. And then as far as like individually breaking it up, it's hard to say like an exact percentage. But a good way to do it is to look at your previous months and then try and find like an average and then maybe try and take it down a little bit.

19:08If you're trying to save money, that would be a good place to start. You mentioned that you have people reaching out to you talking about unstable income. What tips do you have for people who are trying to budget with unstable income? This is a question that Scott and I get a lot as well. Yeah, it's a really hard one. So my advice would be to figure out how much you need every month in expenses. So list out all of your expenses, all of your needs, and all of your wants. And then that dollar amount is what you know that you need to be making. So for variable incomes, list out all of your expenses, figure out the bottom line number that you need to have every month to cover all of your expenses.

19:52And then I like to suggest to use some sort of like a slush fund or carryover fund. And when you have months that you make more, you add to it. And then if you have a month that you make less, you can pull from it. So you kind of have this like overhead account that you can pull in and out of. I like that. I like that a lot. Earlier on, you mentioned that your parents really scared you away from credit, in addition, of course, to telling you to spend your entire first paycheck. But what are some tips that you give for people to encourage them to use credit, but maybe not abuse it? Or has your position evolved on that?

20:25Yeah, yeah, it has. We only use credit cards now. We don't use debit cards at all. My suggestion is to use your credit cards, pay them off in full every single month so that you're not carrying a balance over. for somebody that's first starting out, I would suggest that they get a credit card and they use it only for gas and groceries. They pay it off every single month in full. And then that's it. So that way you're building credit, but you're not. The other thing that you need to keep in mind is that when a bank gives you a$2 ,000 credit limit, that's not$2 ,000 for you to go and spend. That's what they're trusting that they'll get back from you.

21:01So you just have to know that whatever you put on that credit card is going to come out of your account. It's not free money. and just like keeping that mindset. And then another thing that a lot of people don't know about credit cards is that sometimes you can have your bank adjust their cycle, their billing cycle, so that it better aligns with either your bank or your budget. And that makes it just easier for budgeting because sometimes credit cards can be hard to budget with because the cycle dates are different, like halfway through the month your bills do. So sometimes you can have that adjusted or you can pay your credit card off at the end of every month so that the next month you're not going into it with a balance.

21:43It's a zero. That's a really good tip. I didn't really think about that, but that would help really visualize what's going in there a little bit better for me. I'm going to go to set that up following this call. That's awesome. Yeah, my husband does that. He pays it off before the statement hits and then we get a bill for nothing. That's always nice to see a bill for$0. Stay with us. We're taking a quick break. When we're back, Emmy will help us understand the pitfalls of fulfillment scrolling. Support for BiggerPocketsMoney comes from Northwest Registered Agent. Your business identity is everything that shows what your business is about, from what customers see to what they don't see, like operating agreements, meeting minutes, and compliance paperwork.

22:20Get more for your business, more privacy, more guidance, and more free resources with Northwest Registered Agent. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the United States with over 1 ,500 corporate guides, and they have real people who know your local laws and can help you and your business every step of the way. Don't wait. Protect your privacy, build your brand, and get your complete business identity in just 10 clicks and 10 minutes. Visit northwestregisteredagent.com slash moneyfree and start building something amazing.

22:52Get more with Northwest Registered Agent at northwestregisteredagent.com slash moneyfree. My husband and I have multiple investment accounts across several different companies. Throw in vehicles, investment properties, and private equity holdings, and it can be difficult to get a good idea of our actual net worth. And frankly, between the kids, work, and just life in general, I don't have time to be logging into 47 different places. So I just didn't. Scott walked me through setting up my Monarch account, and suddenly everything was easy. It's all in one spot so I can check in quickly. Just like everything else on Monarch, the dashboard is customizable so I can see at a glance what's most important to me and dive deeper when I need to.

23:31Feel organized and confident in your finances with Monarch, an all-in-one personal finance tool that brings your entire financial life together in one clean interface on your laptop or your phone. And right now, just for our listeners, Monarch is offering 50 % off your first year with code pockets at monarch.com. Don't let financial opportunities slip through the cracks. Use code pockets at monarch.com in your browser for half off your first year. That's 50 % off your first year at monarch.com with the code pockets. Support for the show comes from Public, the investing platform for those who take it seriously.

24:05On Public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets, which allow you to turn any idea into an investable index with AI. It all starts with your prompt from renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20 % year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds you a one of a kind index, and lets you back test it against the S &P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and And based on your thesis, not someone else's.