Our Budget & Savings Rate for a Family of Four

We’re not your typical young, super-high earning professionals working toward financial independence. We’re Xennials pushing 40, we have one primary income, we have two growing boys, we live in a higher-cost-of-living area — and we’re on target to reach financial independence in less than ten years after setting down the path.

It’s not sexy, nor is it perfect, but I’m sharing our monthly budget to show how a fairly “normal” family can budget, save, and invest enough to work toward financial independence without winning the lottery.

Here is our monthly budget (and savings rate) for our family of four. 

Our Budget for our Family of Four

We are a family of four with two boys ages 8 and 3. My husband works full-time as an operations manager and I work part-time in marketing for a small nonprofit.

Our spending and savings fluctuates each month, some of these expenses are annualized, but without further ado, here is our general monthly budget.

Monthly Expenses
     Principal $1,488
     Interest, escrow, etc. $1,016
“His” Fun Money (for hobbies, clothes, etc.) $83
“Her” Fun Money (for hobbies, clothes, etc.) $83
Kids activities/items $58
Auto insurance $89
Childcare (part-time) $500
Gas/auto $133
Internet $51
Cell phones $35
Medical/dental $58
Home & Auto $200
Utilities $200
Restaurants $100
Groceries + household items $550
 Total Expenses $4,644
Gross Monthly Income $9,272
    Payroll Savings (pre-tax retirement, HSA, etc.) $1,860
    Payroll Expenses (healthcare, taxes, etc.) $849
    Net Pay $6,536
Remaining to Save $1,892

Budget notes:

  • Mortgage: We plan on refinancing our mortgage to switch from a 15 year to a 30 year loan. This will free up even more cash to save/invest.
  • Fun Money: Our “fun money” allowances are something we’re testing this year. We started this so we wouldn’t feel guilty about spending money on ourselves from time to time. Turns out, we’re usually under budget each month, but it’s been a worthy experiment.
  • Stuff: We don’t budget much for clothes or “stuff.” We use our local Buy Nothing group to receive (and give) clothes, household items, toys – and we try to get items for free or used when we can. If we do need to buy something, it falls under kids or one of our adult allowances.
  • Food: We’ve been working hard on our grocery budget and when we pay attention to it closely we can comfortably keep it under $550 a month for food plus household items such as cleaning supplies, toiletries, etc. Tips on groceries here.

Savings Rate of 56% (or 41%) Depending How You Slice It

When I calculate our savings rate, I like to keep it simple. The equation I use is:

Savings/income = savings rate

Using this formula, our potential savings rate each month is:

$5,240 (savings, including principal payment) /  $9,272 (income) = 56%

$3,752 (savings, not including principal payment) /  $9,272 (income) = 41%

56% savings rate if you include mortgage principal payments in the savings bucket.

41% savings rate if you do not include mortgage principal payments in the savings bucket.

Our savings rate isn’t as high as some but this budget has allowed us to grow our net worth to over $500k in a few short years. And of course, we’re always seeking ways to increase income and decrease spending – while making decisions that are best for the full family (which is sometimes a delicate balance.)

Is it helpful to see another family’s budget and savings rate? Does anything stand out to you in our budget? We’re always looking for ways to save, so share any tips or observations – or ask any questions!

5 thoughts on “Our Budget & Savings Rate for a Family of Four

  1. Christina Merhar says:

    Right!? We live in a newer energy efficient house in a lower cost of living area. When we lived right in Seattle our utilities were more than double this.


  2. Megan says:

    How is your medical & dental so low?! Even when I worked full time at the hospital & they covered some of the cost I still paid 10x this much?!


    • Christina Merhar says:

      We also opt for an HSA, high deductible plan because our medical expenses and usage are generally so low. We usually max out our HSA each year, as a savings vehicle, but if we needed to access it for a bug medical expense that is an option as well


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