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The Frugal Family: Where is the Money Going?

By Guest Blogger(view all posts by Crystal.Ritchie)
at 10:12AM Monday March 15, 2010
under Money Saving Tips

Almost 7 years ago I moved from San Francisco to a tiny town in northern California where nearly 10% of residents in the county were unemployed. I was able to get a job, but my income dropped 60% and my living expenses didn't adjust nearly enough to accommodate my skimpy bank account. To say the least, I was stressed about my financial situation; however, I was also determined to make it through without going into gobs of debt or resorting to food stamps.
Living paycheck to paycheck is a constant balancing act. I mostly credit budgeting software with getting my family through that difficult period of time. I don't know how we could have lived on such a small income without going into enormous debt if I hadn't planned out all of our spending. Similar to mylitter's experience with, I found it incredibly helpful to see a pie chart of where all of my money was going. Once I knew where the money was going, I could more easily focus on addressing problem areas and decreasing any flexible areas of spending.

The first step in using financial planning software is to input all income and expenses that hit the bank account. In addition to recurring paychecks and bills, I included estimated expenses such as the occasional date night or a birthday gift for a family member. I have never been great at sticking to a strict budget, so planning some of my splurges ahead of time helped to lessen the impact of my impulsiveness. Whether the family is broke or not, the need for entertainment and enjoyment in life never goes away, so it's important to know whether cutting down on Starbucks provides just enough extra cash for a vacation.

I love the ability to instantly balance my checking account and set limits on spending categories, but my absolute favorite feature is cash flow projection. By viewing a graph of my bank account three months into the future, I can spot challenging times of the month ahead of time so that I'm not surprised by an overdraft fee. The information is also helpful when determining whether I should ask the utility companies to adjust my billing dates or how long the family has to buckle down on spending so that the credit cards can get paid off. These are all things that a financial adviser can help with, of course, but the cost of their service may add to financial strain before making a positive impact.

There are many financial planning software options that can be enormously helpful no matter what your family's budget looks like. Mylitter uses the free service whereas I paid a fee to download the Microsoft Money program (note: the software is no longer being produced and supported). Get Rich Slowly has a great list of sixteen different financial programs with varying costs. Which is your favorite?

How does your family manage money? What areas of finance management do you find most challenging?

Crystal Ritchie lives and blogs in San Francisco with her preschooler son Jack and her partner in crime/fiance David. She loves to share stories, tips, and tricks related to the parenting gig. When she is not parenting, writing as the San Francisco City Guide Editor for Savvy Source and on her personal blog,, or scoping out awesome deals, she can be found working at a software company in her favorite city.