We’ve all heard about it—“budgeting,” the cornerstone of financial freedom. But what does it actually involve when a family sits down and tackles their finances? Does it feel restrictive? Overwhelming? Or, as some would say, liberating?
To find out, let’s walk through the process with the Rosen family, who are making a change by committing to a weekly “Family Financial Freedom Night.” This is where their budgeting journey begins—not with complicated spreadsheets or financial jargon, but with simple, honest conversations about their money.
So, grab a seat and watch how the Rosens break down their numbers, plan their priorities, and take the first steps toward a future of financial clarity.
“Let’s start with the top three. Housing, Transportation, Food.”
They begin by writing down an estimated spending plan for this month – May.
- $3,300 rent
- $80 water
- $450 gas and electricity
- $500 cleaning help
- Housing – Check
- $650 Lease
- $350 Car Insurance
- $300 Gas and Tolls
- Transportation – Check
- $1,800 Groceries
- $400 Takeout and Restaurant
- $100 Fish
- Food – Check
Total: $7,930
“Wow. There’s so much clarity in seeing our numbers.”
“At least we know where it’s going and then we can decide what we want to do about it.”
“Let’s look at the next few categories.”
- $600 Health Insurance
- $350 Life Insurance
- $1,800 Tuition
- $650 Playgroup
- $250 Tutoring
- $120 Music Lessons
- $65 Gym Membership
Total: $3,815
Grand Total Expenses for the month of May: $11,745
“Ok. Seems like a large number but we can do it.”
“Baruch Hashem with our combined income of $14,000, we should be able to put away a nice amount of money every month.”
“I wonder why we haven’t been able to do so until now.”
“How will making this plan, magically help us yes be able to put away the money?”
“I don’t know, but let’s keep doing the steps. Let’s keep doing this weekly meeting, and see what emerges.”
The next week when Mr. and Mrs. Rosen sit down for their weekly meeting, they are a bit wiser and starting to understand.
“We had to fix the dryer this week for $180.”
“Rivky needed medication and we had a $25 copay.”
“The kids homework chair needed a replacement for $50.”
Total: $255
And the next week…
“I gave $36 to the neighbor’s tzedaka party.”
“I chipped in $25 for Mali’s baby gift.”
“I had to plug a tire this week for $32.”
Total: $93
And the next
“I bought another usb for the photo files for $52.”
“Sara needed a pair of sneakers for $85.”
“We had to start paying the landscaper for the summer landscaping $70 a week.”
Total: $207
Slowly what emerged was all the expenses that are not steady. Normal expenses. Regular everyday things that come up in most families. Nothing ridiculous. True, true, and true.
Making a monthly plan is done in steps. First you plan for the monthly steady expenses. These are usually the numbers that are predictable, steady, and essential. This is usually the simplest part of budgeting for most families.
Copy. Paste. Copy. Paste. Predictable.
The next category of budgeting includes the monthly expenses that are typically a monthly expense but they fluctuate and change. Medical and Health. Repairs. Clothing. Replacements. Gifts. Vitamins. Recreation. House Supplies. It’s a regular part of life that each month, some of these expenses will come up.
With the first category – steady monthly expenses- it’s simpler to plan ahead. It keeps being the same over and over again, and if a change happens it’s easy to change, adjust, and adapt.
But what can a family do to plan well for monthly fluctuations?
When the Rosen couple began budgeting it was easy for them to predict the steady monthly expenses. Then as the month went by and they discussed their finances each week, more and more of the regular fluctuating monthly expenses became clear to them too.
This is how it’s done. The process of starting to track your expenses, will help you gain clarity on your family’s regular expenses that come up. Which ones, how frequently, and how much each expense costs.
One month of information will give you a 1/12th of the picture. Three months of information will give you ¼ of the picture. And before you know it you’ll know a half a year’s worth of what once was irregular surprise expenses. Those expenses might still be irregular and fluctuating, but the pattern of those expenses will emerge. Data helps you then make informed estimates of what an upcoming month’s budget plan should prepare for, because you already know the steady and fluctuating expenses to expect.
So it’s not about making a perfect budget from the start. It’s about starting. And as you keep planning ahead, talking about the finances each week, and keeping track of transactions all throughout you gather more and more data and information that helps you get better at planning. This will help you know your numbers intimately and live in the reality of what’s going on in your finances day to day.
At this point the Rosen’s have mastered the first step of Financial Stability which is to cover their monthly expenses. But as they keep tracking and meeting each week another category of expenses seems to be cropping up.
“This week we have to give a deposit for camp. The deposit is $500. Camp starts in 4 months though, and the remaining balance is due before camp begins.”
“Yes, and this past week, I shopped for an entire summer wardrobe with Sarah and Tehilla. They used somethings from last year, and we shopped for whatever they still needed for this season. The total was $1,500.”
“I don’t think these are monthly expenses. They seem to have their own category.”
That is accurate. What the Rosen’s are describing are annual and seasonal expenses. Yom Tov related expenses are seasonal expenses. They come at a predictable time in the year. Annual expenses are typically at various and varying times of the year, but they happen every year.
As a family tracks their expenses they will begin to have real data about what each category of annual and seasonal expenses costs their individual family. Some common seasonal categories to think about are Back to School, Tishrei, Chanuka, Purim, Pesach, Shavuos and Summer. Some common annual categories are clothing, insurances, car expenses, travel and vacations, home repairs and maintenance, and electronics. For some families a new shaitel or jewelry, or furniture, or electronics might be annual expenses to consider.
The second step of financial stability is to ensure that a family is preparing for annual and seasonal expenses each month. They are building into their monthly budget line items to prepare for annual and seasonal expenses. They are thinking ahead and preparing for the money to be there when they need to spend it. They might be preparing for 3 months in advance instead of paying something off for 3 months after.
“I think we should start by preparing for the Back to School Season and Tishrei.”
“That’s a great idea. We just finished funding Pesach and I’d like to have money prepared ahead of time so that next year we can fund our Pesach expenses headache free.”
“Based on our records from last year August and September, it seems that back to school cost us about $1,500 for uniforms, new shoes, and school supplies.”
“I think that’s a good target amount to start with.”
“That means we should put away $300 each month so that the money will be there to spend it when we need it.”
The Rosens designated an account for this fund and named it, “Annual Expenses.”
They put away this $300 each month and then when it came time to shop for the shoes, and uniform and school supplies, it was the debit card instead of the credit card that got used. And with that came the most beautiful feeling of peace of mind. After September they upped their monthly amount to $500 to prepare for their Pesach fund. Data and information helped them know how much their target amount that they needed for the fund was. Discipline helped them put away the money each month. Weekly meetings helped them work on their finances together. And time and patience helped them build the habit and the fund up slowly.
“I’d like for us to make a fund for camp fees and expenses as well.”
“And how about a fund for car repairs.”
“I think it would be great to make one for vacations and travel too.”
“And we can make one for clothing as well.”
Then when their son turned 11. They made a fund for his Bar Mitzva, and they gave themselves two years of putting away money each month to get to their Simcha with simcha.
And over time, they had a solid budgeting system going. Steady monthly expenses, fluctuating monthly expenses, annual expenses, seasonal expenses, and a Simcha Fund.
And that’s how Financial Stability is built. One step at a time.
