How to Do a Budget Review for Your Family Budget

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I love January. 

As a teacher, it’s a great halfway point of the year and means I’m that much closer to summer. Because, you know, summers are awesome.

But January is also time to turn the page on the last year. All of my goals, both the ones I met and the ones I fell short on, are behind me.

It’s the perfect time to reflect on everything that happened, the good and the not so good.

And being a total budget nerd, I have SO much fun reflecting on the Griffin family budget.

I know, I know, budgets aren’t everybody’s jam, but it’s amazing how much you can learn when you look back on where your money went for a whole year.

For example, do you know how much of your income went to your savings account?

I do. Down to the penny. (I really love tracking my money)

And if you keep a consistent budget, it’s not too tough to figure out. I even added a formula to my budget to automatically calculate what percent of my income goes to each of my budget categories. I am a budget nerd after all. 🙂

If you need a budget that calculates how much you’re spending in all of your budget categories, you can get one for a couple bucks in my Etsy shop. 🙂 I did all the hard work for you.

An annual budget review, or even monthly budget review, is a great exercise for your family and will help you prioritize your spending and budget for the next year.

If you don’t like what you see, you have all the power to make changes and create a budget based on your values for next year.

Ready to learn how to do a budget review and get your finances set for this year? As a bonus, you’ll get a snapshot of how the Griffin budget did last year. 

Let’s dive in!

What Can You Learn from Doing a Budget Review for Your Family?

When you say “annual budget review”, it sounds like a lot of work and a really boring task that companies have to do to keep their books straight.

But I promise you, it’s much more exciting and important than that.

With a few quick glances, I can learn a bunch about my spending and saving habits. And with the right budget, you can too.

A yearly budget review can tell you:

• How much money you put in your savings account
• How much your car payment is costing you and what percent of your annual budget it is
• What percent of your budget you spent eating out
• If you donated enough money to charity or your church to meet your giving goals
• How much money you’re wasting on stuff you don’t care about

And a whole lot more. 

With any budget review, it’s important to look at all of the numbers, especially the big ugly ones you want to tuck under the bed.

The hardest part about making changes in your finances is taking the time to look at the numbers, the real numbers, and take action.

A yearly budget review can be ugly at times, but it’s an investment in your overall financial health. And well worth it.

When I first started budgeting, I had to face the cold hard facts.

• I was a paraprofessional working in a school making $19,000 a year
• My student loan debt was sky high – over $500 a month
• My checking account was slowly dwindling and I had no idea how to fix it

So I started a budget and looked my ugly finances right in the face. It was hard. One of the hardest things I’ve had to do, and you can bet there were tears and a lot of feelings of hopelessness.

But my future was more important than my ugly money situation. I had to make a change. So I made my first budget. 

How Can You Do an Annual Budget Review?

Step 1: Look at your budget

This assumes that you have a budget. If you don’t, this process is going to take a whole lot more time, but it’s still possible. 

You can download your own budget spreadsheet here for just a couple bucks. It’s a good investment in keeping your finances organized.

Comb through your budget and see where you spent the most money. I like to come up with a Top 10 list. 

What are your ten biggest budget categories for the entire year?

Your Top 10 will tell you a lot about how you spent your money. I make a habit of doing this every year to make sure my spending aligns with my family goals and priorities. 

When my actual spending aligns with my priorities, I know I’m doing a great job of sticking to my budget and allocating my money efficiently to meet my goals.

But sometimes the numbers come back and surprise me. And that’s when I know I need to make changes.

Step 2: Calculate how much money you spent in your budget categories

With a budget, this is super easy. Without a budget, you’ll have to do some digging.

If you have online banking, it’s pretty easy to pull a report of your transactions for the entire year with just a few clicks. 

If you don’t have online banking, give your bank a call and see if they will create a report for you. I haven’t tried this, but I don’t see why it would be a problem.

Step 3: Divide the spending for each budget category by your total income and multiply by 100

Now for a little math. Luckily it’s not too tough – no algebra involved I promise. 🙂 

When you divide your spending categories by your total income for the year, it gives you the percentage you spent in that budget category.

I love seeing the percentages so clearly to get a perfect idea of how exactly I spent my money. It’s always a revealing when I see the numbers up close and personal. 

I know I spend a lot on my mortgage, especially since I pay extra to the principal every month, but to see the exact percentage gives me a real snapshot of how much it affects the rest of my budget.

Step 4: Analyze the results to find your priorities

This is perhaps the most important step. Numbers are useless unless you think about they mean and apply them.

One of my favorite quotes is from Joe Biden – “show me where you spend your money, and I’ll tell you what your priorities are.”

It’s so freaking true! When you take a few minutes to analyze your spending, you’ll find out what your priorities are pretty dang fast.

And sometimes your ACTUAL priorities – saving money, retirement investing, paying off debt – don’t align with your SPENDING priorities. 

And as much as it might suck to see that, it’s good to take a have a nice hard reality check once in a while. 

I was initially shocked to see we spent over 11% of our income on your daughter. I mean, we don’t buy her a bunch of toys or clothes – how could it be such a big part of our spending?

One word – daycare!

Of course we can’t make a big adjustment there. Our daycare is really cheap for our area and we LOVE our daycare, and so does Addy.

But if our dining out category was that high, WHOA! That would be a huge red flag.

Take some time to analyze your actual spending and see if your spending aligns with your actual priorities.

Step 5: Compare your spending priorities to your values and make changes

This is where the rubber meets the road. It’s all well and good to analyze your budget and review your spending, but the point of an annual budget review is to make changes.

The big question you need to ask is:

“Does my spending match my values?”

If the answer is yes, you’re doing FANTASTIC! 

If you said no, then dig deep and make some changes.

This is a great time to sit down with your partner or a good friend and talk through your financial priorities together.

Do you want to save more money? Is it a priority to invest in your retirement? Are you frustrated by your debt and want it gone faster?

If you feel stuck in the same financial struggles year after year, DO SOMETHING DIFFERENT THIS YEAR.

Can you cut back your spending in one of your Top 10 categories? Would it help to cancel any subscriptions like cable or unused gym memberships? 

Any way you can adjust your spending to reach your goals faster is a good change. The hard part is to stick with it.

If you need accountability, encouragement, and a group of like minded people to help you, join the Mr. Jamie Griffin “Get Debt Free” Community. It’s full of people who are working their tails off to learn to budget, save money, and pay off debt like crazy. 

If that’s you, come join us and get ready to make big changes in your life.

The Results of the Griffin Family Budget Review

Okay, time for the bonus content. I’m going to give you a breakdown of our annual budget review, the good, the bad, and the ugly.

The Griffins Top 10 Budget Categories

I have to be honest, I’m pretty dang happy with our Top 10 list for this year. 

• We put a bunch of money into our savings and are on our way to hitting a bunch of goals in the new year
• Mortgage was 17% of our income, but that included an extra $200 every month
• Tithing/giving at number 3 is sweet too! It’s a huge priority for us, and I’m glad our budget reflects that.
• Food, gas, and cell phones are all pretty necessary expenses too

I am shocked to see how much we spent on clothes though. That caught me by surprise a little bit.

November was an extra paycheck month, so we spent $500 updating our wardrobe, so that was a big part of it. But looking back at our budget, we spent some money here, some money there, and low and behold it was enough to put clothes in our Top 10.

I don’t actually have a big issue with clothes being in our Top 10. We decided it was a priority to update our wardrobes this summer and fall, and set aside money to do it.

I love budgeting because WE get to decide where our money goes and prioritize what we want to spend money on. And a yearly budget review helps us keep our goals and priorities in check.

Changes I Want to Make to Our Budget for Next Year

There isn’t a lot I’m disappointed in, but I always like to tinker and make our budget more efficient. These aren’t in any particular order.

1. Add more to Addy’s college fund
2. Increase our Roth IRA and Giving contributions
3. Pay more on our mortgage – I want that baby gone ASAP!
4. Spend more money on our hobbies and dates – it’s weird to say, because we don’t spend a lot on ourselves in the “fun category”. I want to be more intentional about investing into Jenna’s cricut hobby and enjoying time together with her and Addy. And I want to buy SO MANY dungeons and dragons dice! 🙂

Now it might look like our finances are all in order and there isn’t anything to grow and improve on. But that’s hardly ever the case. Our priorities are always shifting and changing as we reach our goals and set new ones.

And our budget hasn’t always looked this good. Here’s our first budget review from back in the day.

No investments, no money going to savings, and no life insurance. Our number one priority was to pay off our student loans as fast as humanly possible. 

And that was our goal for a few years as you can see here.

Are You Ready for Your Annual Budget Review?

I hope this budget review guide was helpful, and you get a ton of value when you do your own budget review. It’s a great practice to get into, and you can even apply it to your MONTHLY budget.

You’ll learn a lot about your spending habits, your saving habits, and your priorities. And if you see things you don’t like, have the courage to make changes this year! 

You can do it. Be consistent and take small steps everyday.

If you want to take this annual budget review checklist with you anywhere you go, you can download it by clicking here. 

Our budget and goals changed our lives and it can change yours too.