Finances for a Frugal Family of Five

by Government Worker FI | Last Updated: January 22, 2020

What do our finances as a frugal family of five look like? Read on to find out! In this post, I use Sankey diagrams to illustrate the sources of our total income and expenses. Furthermore, I break down where we are saving our money and what our biggest expenses on. It’s financial voyeurism at its finest. Check out what finances for a frugal family of five look like below!

Accidental zero based budgeting: how we manage our finances

What is zero-based budgeting?

Zero based budgeting is just a fancy name for accounting for everything you spend.  There are many different variations on this technique. Some people practice it to get out of debt. On the other hand, some people use the technique to become FI.  

I’m embarrassed that I never heard of“zero-based budgeting” until listening to Naseema McElroy on ChooseFI podcast episode 112.  Naseema had used zero based budgeting to eliminate over a million dollars in debt. She attributes her knowledge of the zero based budget technique to Dave Ramsey.  Not surprisingly, Dave Ramsey has unnecessary products to sell you to help you develop your own zero based budget.

How we budgeted “pre-FI”

Before we decided to pursue financial independence, we had many different savings accounts for various savings goals. We had the “car fund” the “home improvement fund” “vet/pet fund”, vacation fund, etc. etc. In addition, we had our joint checking account where we paid all of our bills from.  We then split our paycheck among the various savings accounts and joint checking.

How our system resembled zero based budgeting

In essence, our system resembled a accidental zero based budget; we spent essentially all of the money in joint checking every month.  A lot of money sloshed into and out of joint checking, but the balance remained the same. When we had windfalls of money, we’d place them in one of our many savings accounts.  Likewise, when we had “unexpected” expenses, we’d transfer the money from the appropriate savings account.

Recently, I tried to examine how much money was flowing into and out of joint checking.  Tracking our biweekly payroll deposits was easy, but the true amount we were spending was masked by constant transfers into and out of these various accounts.  Finally, I decided to just plot the minimum balance during each month (typically after our mortgage was paid). We were consistently keeping the balance around $1,000.  This is why I call it our approach accidental zero-based budgeting. We weren’t tracking what we were spending, but we apparently were spending the joint checking budget down to “zero” (with a buffer) each month.

Minimum balance of our checking account pre-fi demonstrates our accidental zero based budgeting technique
Minimum monthly balance in our joint checking account.

Notably, we were very good about putting money into these targeted savings accounts but we did not contribute more to our IRAs/retirement accounts. We didn’t save more for retirement because we calculated we would have “too much” money when we reached our minimum retirement ages. Furthermore, since I’d never ever heard of a federal employee leaving before early retirement age, saving more just sounded stupid.  

Our current system

Now we currently try to devote as much money as possible to our savings. We still try to make sure the money coming into our checking account equals the amount leaving our checking account.

Our current spending breakdown

Frugal family of five finances: total breakout of income and outflows
Frugal family of five finances- the big picture


Mrs. GovWorker and I both work normal, W2 jobs. Our jobs account for most of our income. The non-W2 income on the graph comes from our tax return, money from informal side hustles, selling items we no longer need, and gifts. Yes. I know. Our tax return is not “income”. However, we treat it as such. My blog, my rules.

I was surprised at how large our amount of non-W2 income turned out to be for 2019. Since it comes in throughout the year in drips and spurts it never seems like a lot. However, over the entire year it ended up being equal to 6.5% of our gross paychecks, which is a sizable number. We save 100% of our non-W2 income, so this money really fuels our savings!


This category includes everything that the government takes out of our paychecks on a biweekly basis including medicare and OASDI. I did not include our property taxes. We escrow our property taxes with our mortgage so I put it in the “expenses” category. When I saw that 22% of our income went to taxes it seemed like a lot. It’s no wonder that the government breaks our taxes into a lot of subcategories on our pay stubs– it makes our taxes look a lot smaller.

Savings and Expenses

We saved 32% of our income and spent 56%. If you follow our monthly spending reports, you’d know that I claim we save closer to 50% of our paychecks (after taxes are taken out). That’s because I include our mortgage principal reduction in our monthly savings rate. If you remove the principal payment from our mortgage from our expenses category you end up with the diagram below. (We pay a lot of principal each month because we have a 10 year fixed mortgage) You can see there that of our income left over after taxes we save 41% and spend 37% (for a savings rate of 53%).

frugal family of five finances with mortgage
Diagram with our mortgage principal counted as savings.

Frugal family of five finances- expenses

frugral family of five sankey diagram of our expenses
Sankey diagram showing a breakdown of our expenses

Frugal family of five finances- savings

frugal family of five finances sankey diagram for savings
Here is a breakdown of our savings. Note the lack of optimization!

Get ready to throw your stones and bring your pitchforks. What kind of a personal finance blogger puts 32% of his savings into paying off his house?


Yup. This guy. I wrote a little bit about it earlier. Yes. I know we should max out our tax advantaged accounts first. But– it’s super motivating to watch that number shrink to zero. And paying off the mortgage will give us financial freedom to live on a very small fraction of our income if one of us were to lose our jobs before we reach financial independence.

We are also putting a healthy amount into tax deferred retirement accounts, a little bit into Roths and some into our HSAs. I know there are optimal tax minimization strategies we could be implementing. However, I feel like we’re doing a lot of things right by saving a giant chunk of our income and I don’t have the mental bandwidth to optimize this further today. Maybe 2020 is the year I get my shit together and implement a tax optimization strategy.

Mrs. GovWorker and I also have to contribute a fair chunk of change towards our pensions. While we don’t include this money in our financial independence calculations, there is a high likelihood that we will both receive a pension around age 60±3.

The last thing to note is that we are putting a small amount into 529 plans for our daughters. We have a lot of conflicted feelings about that. But at this point, we feel like putting a small amount away for their college is the best of both worlds for us at this stage.

 Note- Sankey diagrams inspired by code I found on the MATLB(TM) file exchange. Citation: James Spelling (2020). drawSankey (, MATLAB Central File Exchange. Retrieved January 18, 2020.    

Ten things this family of five spent less than $2,000 on in 2019

Gas/Auto- $1,554.18

Our biggest expense as a family of five that was less than $2,000 in 2019 was gas and auto. We spent about $1,500 on our car last year. Our biggest car expense was car insurance which was about $600 for full coverage on our 2015 Mazda5. The rest of the money was spent on gasoline. We bike most of the places we need to go. (Check out my love letter to our cargo bicycle). My wife and I both live within 2 miles of our offices. While this means that our housing costs are high, our transportation costs are low. And our commuting time consists of communing with nature. I love our house.

The new car allows everyone to sleep without touching each other.

Home Improvements- $1,246.03

Since pursuing financial independence, this is the category that has shrunk the most! We bought a crappy college rental and have been fixing it up for the past 9 years. For many years, when we got a lump sum of money, (or a raise) we’d throw that extra money at the house. Over the years we’ve added central air, put drain tile in the basement so it didn’t flood every rainstorm, and DIY’ed a kitchen and bathroom remodel.

This past year, we only put $1,200 into the house. (And I can’t even remember what we upgraded.) At some point, I’m sure this category will balloon up again when we need a new roof or finally address some insulation issues. But each year we can keep this low is another year we can save more towards FI.

Bicycles $1,065.75

Picture of our family riding a cargo bike
4/5 members of the GovFamily on our spicy curry cargo bike

This might be one of our expenses less than $2,000 where we spent more than an average family of five. So you know what happens when you don’t spend a lot of money on cars? You end up spending a lot of money on bicycles. This amount includes the purchase of one used bicycle for $20. The rest of it is bicycle maintenance. My wife and I have six bicycles between the two of us:

We have winter bicycles that we specifically let get trashed by the road salt and slush in the winter to keep our “summer bikes” running more smoothly. Even with the summer bike/winter bike lineup, those bikes need to get tuned up. And so do the kids bikes!

I like to take our bicycles to a vocational training program for at-risk youth to get fixed. There bicycle maintenance costs about half as much as a normal store, and it helps the community. Unfortunately they won’t touch our cargo bike ($450 tuneup :-/). And we had a lot of bicycle tuneups this past year.

Yes, in theory, bicycle maintenance is something I could do myself. But I hate doing it. I get super frustrated adjusting the brakes and the derailleurs. They are always too loose or too tight. I’d much rather pay someone who can “feel” how it should be. That frees up time for me to work my real job, parent, and write this blog.

Date & Babysitting $794.40

We have 3 kids and love them very much. But even though they are amazing humans, we need breaks to focus on our relationships. Mrs. GovWorker and I have been married for 15 years and we’ve had kids for 12/17ths of the time we’ve known each other. It’s important to find time to connect.

Hard to believe these lovebirds have been married for 15 years!

That being said, we stopped going on dates in August. We had scheduled dates too close together and we couldn’t figure out what to do and got in a fight. (A stupid fight but a fight). I think we would enjoy dates much better if we could hang out at home and somebody took the kids out somewhere.

Dates seemed like a disappointment. We’d go to a restaurant and pay too much for sub-optimal food, then try to figure out how to kill another 1-2 hours before the kids were in bed. And sometimes we’d come home and have to put the kids in bed anyway. If we still had to deal with the shittiest part of the night, was it really worth dropping $50-$90? It seemed like we were spending money and not getting any extra joy out of the date.

We’ve now switched it up and have “at home dates” after the kids go to bed.

Restaurants $585.80

We spent less than $600 on restaurants last year for our family of 5. I feel like this is a pretty great number. I saw someone on Twitter saying that they were having problems sticking to their $100 per month budget for 1 person!! We’re just over $100 per person per year in this category. To be fair- this doesn’t include restaurant food purchased on vacation. (That’s in the vacation category). Nor does it include restaurant food purchased on dates (that’s in dates).

We rarely eat at restaurants- even on vacation. I have food allergies, which limits the number of restaurants we can eat at.

And even though there are plenty of restaurants that have gluten-free food, I find that restaurants are always a let-down. I feel like crap after eating at a restaurant. I’d much rather just stop at a grocery store and eat fruits and vegetables if I need to consume calories on the go.

Likewise the “treat” of not-cooking is by far out-weighed by the “chore” of dealing with 3 feral kids at a table in public. Mealtimes are a chaotic battle-field at home. Why expose the general public to our shenanigans.

How the Pandemic Affected Our Spending

After several months where I didn’t care about my spending, I thought it would be a good idea to check in again. Since I track everything using CountAbout, I didn’t lose any financial records. Instead, I just chose to ignore them while I tried to be full time employee and full time parent. During this time, if something could make my life easier, I bought it. (“Kids- I bought you this sand art kit!” “Look, today you can use this scratchy paper, but leave me alone!!”)

At the same time the Amazon delivery driver became familiar with every inch of my doorstep, we had other expenses drop precipitously. We stopped sending our youngest to daycare. As I’ve written before, daycare is one of our largest expenses (yet is still worth every penny).

In short, the pandemic affected nearly all of our spending categories. We saved money on typically fixed costs like daycare and transportation. At the same time, we were spending money on discretionary items like there was no tomorrow.

Relative spending

As a scientist, I always need to visualize my data to get a feel of what is going on. I made these graphs to help me see how the pandemic affected our spending.

In the first graph, I show the relative change in spending {(final-initial)/initial} before and after the pandemic. I averaged our spending over the 4 months before the pandemic to get the “before” numbers. Likewise, I averaged over a 4 month window (April-July) to get my after numbers. The data show that we spent less on bikes, dates, entertainment, and daycare after the pandemic started. No big surprise, right? On the other hand, we increased our spending on groceries, charity, and household. (Also not surprising).

Did I mention we spent more than 100% more in some categories?? We spent a lot more on pets, home improvements, and restaurants. I’ll dive into the first two later on in the post. Normally we never eat at restaurants. As in Taylor Swift, never, ever, ever eat at them. But to me it seemed like our civic duty to get take-out as the demand for restaurants evaporated overnight. I’d much rather have the restaurants open and employing their workers than to brag about how little we spend on restaurants to readers of my finance blog.

Bar graph showing how the pandemic affected our spending percentages.
Percent change in selected spending categories. Note axis is cut off at 100% but we are spending >1,000% more in some categories.

Absolute spending

Any scientist worth his/her salt would tell you that the graph I made for you is slightly misleading. I already said restaurants were a tiny fraction of our spending. Therefore, it’s not really important that we doubled (or more) our spending on restaurants. The graph below gives the rest of the picture. In absolute terms, our restaurant spending was still a tiny fraction of our total spending. However, daycare and groceries ate up a lot of our budget before the pandemic, so even small percentage changes affected our spending quite a bit.

If you’ve got a keen eye, you might notice that, despite the fact that many of these categories changed, the pandemic didn’t change our total spending

bar graph showing actual spending amounts on various categories before and after the pandemic
Actual spending before and after the pandemic in various categories before and after the pandemic.

The pandemic didn’t affect our total spending

bar graph showing how the pandemic has affected our total spending
Our total spending didn’t change during the pandemic

Surprisingly, our total spending was not affected by the pandemic. How can that be? The hardcore FIRE voices that seem to be the loudest on the internet would probably be shaming me for not being able to save more money during this time. I didn’t have childcare expenses. And there was nothing to do except sit at home. So HOw cOulD yOu SPenD SO MuCH mONey?

It’s simple. We knew we were facing a once-in-a-lifetime challenge. We had saved money for rainy days. In fact, our rainy-day-fund has many years worth of hurricanes saved up. I have no interest in eeking out a couple of extra thousand dollars in savings while our whole lives are disrupted and we have the means to make our lives better. If ever there was a time, coronavirus is the time to “smoke em if you’ve got em”.

Money is for more than making your Personal Capital dashboard go up.

So how did we smoke em’ you might ask? Well, first of all, Mrs. Gov finally thought we had enough time for a dog. I’ve wanted a greyhound for the longest time. (The longest time). Kenny was worth the wait! He’s made my life better in countless ways.

pictures of a greyhound sleeping
Kenny has been expensive. But worth it.

I am planning on writing a whole post on the costs of adopting a greyhound. While our numbers are higher than Financial Mechanic’s cat adoption costs, dogs bring so much joy. In case you never make it back to read the future post, the TL;DR is that Kenny is an absolute lover, who sleeps all the time, follows me around like an 80 lb shadow and he’s worth every penny.

photo of our basement
We spent some money to install lighting in the basement and epoxy the floor to create a new workspace (left). (The image on the right was taken in a different “unfinished” spot in the basement.

The other major category that saw a dramatic increase in spending was “home improvement”. It all started when 2 of my daughters started punching and pulling each other’s hair because they wanted to use the bathroom at the same time.

We *have* two bathrooms in the house but one was kind of gross in the unfinished basement and no one wanted to use it. So I gutted that bathroom and redid it at the start of the pandemic. I also bought some inexpensive epoxy paint and LED lights. This turned our unfinished basement from a dark, dirty dungeon into a passable work at home space (before/after pictures above). Honestly, on a per-dollar basement, the lights probably had some of the best enjoyment ROI of anything I’ve done in a long time.

So we could have scrimped and saved and suffered our way through the pandemic. But we decided to invest in our happiness instead.