smiley faces for good budgets

What Other People Spend: A Look Into William & Kate’s Budget

In Grandma's Jars, Grandma's Jars Member Stories by Phil McGilvrayLeave a Comment

Just about every client will ask me at some point – what do other people spend on (fill in the blank)? We are all curious about what other people spend on things. We like to be able to benchmark ourselves. Over the next few months I thought I would share with you some real life budgets, along with my thoughts as a financial coach.

To start things off, this  budget is a brand new client I saw. To protect their privacy we will call them William and Kate.

List of Expenses

Background Summary

  • William (46) is a Fire Officer and Kate (38) a Paramedic
  • 3 children (aged 10, 8 and 5)
  • $200,000 before tax (combined income)



  • They are falling behind each month because of:
    • their mortgage
    • a bad investment property
    • personal debts
    • commitment to elderly parents
  • They are living paycheque to paycheque and their debts are steadily growing. William and Kate are highly embarrassed about their situation. They know they should be doing better on their incomes but cannot see a way forward. They want to get out of the pay cheque to pay cheque cycle, build some savings and get rid of the credit card debt.
  • They were referred to me by work colleagues who had been in a similar situation 6 months earlier but through hard work and the right structure, knocked off step 1, 2 and 3 of our roadmap to financial peace program. Now, we’re making significant headway on eliminating their personal debt.



  1. To get out of the Pay Cheque to Pay Cheque cycle
  2. To have some savings in the bank
  3. To get rid of the credit card
  4. To have the funds to get out of their Investment Property


Their Budget

Here is the budget they initially presented me with, the comments I made and what their budget look like after some initial changes.



Source of Income Income ($) Income per Calendar month
William Station Manager Salary $2,995 / fortnight $6,489
Kate Paramedic $2,100 / fortnight $4,500
Rent $1489 / month $1489
TOTAL   $12,478

List of Expenses



Expenses Monthly




My Comments / Feed back
Everyday ($)  ($)
Groceries 2,100 1,600 Kate and Will have 3 young boys. However, $2,100 is on the higher end of average. A typical young family would spend approx. $900 – $1100/month assuming no special dietary requirements. Kate and Will’s budget blow out. Here reflects lack of routine due to them both working shift work. Grocery shopping on the way home for tonight’s dinner is a budget killer. With little meal planning and structure Kate and Will could easily save $500/month here
Petrol 260 260 This is average given their distance from work
Take Away 65 300 On their own, none of these expenses are necessarily extravagant. However, when you add them all together there is just over $600 / month in lifestyle expenses.

Like most people, they did not set out to spend this much. they just did. All those small amounts add up.

I recommended that Kate and Will halve this amount available for Lifestyle spending and be more deliberate about how and when they spend it.

To help them do this, their Everyday spending money was to be isolated in an separate bank account. This bank account structure will help them monitor and track their spending throughout the month.

Entertainment 65
Alcohol 87
Cash/Pocket Money 217
Kids Expenses/Lunches 65
Magazines 15
Coffee Out/Bought Lunches 87
Subtotal $2,961 $2,160
Utilities ($) ($)
Gas 27 27 These numbers are realistic. However, I have encouraged Will and Kate to get quotes from other energy providers. I also suggested to look into setting up their payments as ‘Monthly Even pay’ so their bills are evened out across the year. This will ensure that they don’t get hit with big quarterly bills – each bill is the same amount every month.
Electricity 200 200
Heating 42 42
Water 180 180
Rates 75 75
Subtotal $524 $524
Communication ($)  ($)
Telephone, William’s mobile, internet 164 164 I understand that this is a generational thing but I strongly encourage all my clients to give serious consideration to how much money they are ‘surfing & texting’ away due to habits. The killer here for Kate and Will is that they have plans with handset repayments. When their plan finishes they will keep their old handsets and go onto a much cheaper plan.
Kate’s Mobile 86 86
Subtotal $250 $250
Car ($)  ($)
Registration (two cars) 130 130 These cost are for two cars and seem perfectly reasonable. Note: they don’t have roadside assistance. Tyre replacement every two years is included in Maintenance.
Maintenance (inc tyres) 250 250
Insurance 189 189
Licence 5 5
Subtotal $574 $574
Grooming ($)  ($)  
Clothes 100 100 This is an average grooming budget for a family with 3 growing boys. Fortunately clothes get handed down. $35 for hair and beauty is excellent.
Cosmetics 0 0
Hairdresser/Beauty 35 35
Shoes 100 100
Subtotal $235 $235
Gifts ($)
Christmas 42 42 $112 for gifts is very much on the low side. I suspect they will find they have been unrealistic. $150-$200/month is about average. However, every family is different. I have suggested they redo the gifts list worksheet to double check their numbers.
Birthday 50 50
Others 20 20
Subtotal $112 $112  
Health ($)  ($)
Doctors  – $60 for health appears to me to be a significant under estimate. While Will, Kate and the boys have a very healthy lifestyle, they have made no allowances for the dentist, doctors or allied health services. These are costs the are likely to incur throughout a calendar year so they should be in the budget. The average health budget without health insurance is closer to $200/month.
Optical  –  –
Dentist  –  –
Physio/Chiro/Massage  –
Ambulance cover 10 10
Chemist 50 50
Subtotal $60 $60
Kids ($)  ($)
Parties 20 20 This category is really hurting Will and Kate. Because they work shift work, they pay Kate’s parents to look after the kids throughout the day. This also helps provide Kate’s parents with much need income. Unfortunately, under this arrangement there are no child care rebates. The other allowances for parties and school expenses are reasonable.
Child Care 1,733 1,733
School Stationary 50 50
School Photos 10 10
School Uniforms 33 33
School Trips/Excursions 33 33
Subtotal $1,879 $1,879
Sports/Hobbies ($)  ($)
Mountain Bike Events 60 60 These costs are about average. They live a very healthy lifestyle. Unfortunately, under their current circumstance they do need to consider if they can pull it back temporarily until they get their finances under control.
Books 50 50
Sports 109 109
Subtotal $219 $219
Giving ($)  ($)
Donations 50 50 I am a huge believer in giving. It is a very personal process, so I did not recommend cutting this out.
Subtotal $50 $50
Professional Fees ($)  ($)
Accountants 60 60 This is a necessary expense due to their messy investment property. Without this, I would have recommended doing the tax themselves through E-tax or tax agent like ITP or H&R Block
Credit Card Interest 174 0 We realised later that they had doubled up with this under loans category
Subtotal $234 $60
Holidays ($)  ($)
Annual 167 167 When it comes to holidays, the only right amount is the amount you can afford. Will and Kate simply can’t afford to spend this much on holidays. Unfortunately, the bulk of this money is to cover Will’s interstate travel to visit aging parents.
Weekends & Extras 200 50
Subtotal $367 $217
Pets ($)  ($)
Food 300 100 This is huge! They simply cannot afford to spend this much on feeding their dogs. They need to look at cheaper alternatives.
Vet 17 17
Subtotal $317 $117  
Entertainment ($)  ($)
Family/Kids Entertainment 50 50 $120 month is reasonable for entertainment. However, given their financial circumstances Kate and Will need to look at no cost or low cost entertainment.
Dining Out 70 0
Subtotal $120 $50
Household ($)  ($)
Gardening Items 200 190 These numbers are very high as William and Kate have minor DIY jobs they want to complete. Unfortunately this is again an area where they need to recognise that right now they just cannot afford this sort of money. A typical budget for household is approx. $200 / month.
Computer Supplies 10 10
House Improvements 500 0
Subtotal $710 $200
Insurance ($)  ($)
Personal Insurances 381 381 Personal insurances are seriously important if you have a mortgage and especially if you have children. This is however a high figure. I have encouraged them to look at other quotes and means for getting life insurance.
House & Contents Insurance 121 121
Subtotal $502 $502  
Loan Repayments ($)  ($)
Mortgage 1,778 1,778 Their mortgage repayment is about average in today’s market but what is really hurting them is the lifestyle debts, the car loans and credit card debt. We can see clearly here how these debt obligations are robbing them of cash flow. We need to find some surplus funds, then build a debt repayment program.
Credit Card Payments (Min) 376 376
GE Finance Loans 43 43
Car Loans 656 656
Subtotal $2,853 $2853  
Investments ($)  ($)
Investment Loans 1,450 1,450 This investment property has been a serious mistake for Kate and William. It has cost them a lot of money in repairs and maintenance and needs a lot more done before it could legally be sold. The rental return is low leaving them significantly out of pocket, even with tax deductions.
Property – Rates 167 167
Property – Maintenance 250 250
Property – Insurance 188 188
Subtotal $2,055 $2,055
Total Expenditure $14,002 $12,117
Surplus/Deficit -$1,524 +$361


General Comments

With a few changes still to be made, William and Kate have managed to achieve a surplus of $361/month. With regular overtime on offer they should be able to push this surplus towards $500-$700/month.

William and Kate’s situation is an excellent example of how you can earn a really good income and spend it all (plus some) without having an ‘extravagant lifestyle’.

Most people would look at the income in envy and wonder how they could possibly be struggling financially.

But the reality is William and Kate don’t live it up, they don’t have a big house, flashy cars or take lots of holidays. They have made two simple budgeting mistakes, mistakes just about all of us have made.


Common Budgeting Mistakes They Made

1) No planning or boundaries around their ‘everyday spending’

Like most Australian’s, William and Kate have never really taken time to consider just how much their bought lunches, coffees and daily trips to the super market really costs them. All those seemingly little purchases that fit in around the hustle and bustle of life really do add up. In their case, they were spending at least $1,000 more than they need or intended to. Their situation is complicated by the fact they both work shift work.

A powerful way to solve this problem is to agree on a realistic amount you are willing to spend over the month and isolate this amount in a separate bank account. All your spending on everyday expenses occurs from this bank account and if the money runs or half way through the month – bad luck it’s baked beans and mash potatos! Most of my clients have found that they have been able to save hundreds of dollars each month doing this and not really noticed the impact on their lifestyle.


2) Committed to big expense without understanding the consequences

Too often we make big financial decisions without stopping to figure out if we can really afford it. In William and Kate’s case, committing to car loans, the investment property and to pay Kate’s Mum $400/week to be around for the kids has absorbed significant chunks of their income and left them with far less discretionary money than you would expect.


The Plan From Here

  1. William and Kate will adopt the budget above and look for ongoing savings in terms of their utilities and insurances.
  2. They will isolate their ‘Everyday’ Spending money into a separate account and start to plan out their meals each week.
  3. They will both take on overtime opportunities to enhance their monthly savings capacity.
  4. Savings will be used firstly to set aside funds for future bills and then to build a rainy day fund of $3,000 – $5,000.
  5. Once the rainy day fund is in place, we will turn our attention to paying off the lifestyle debt. Starting with the GE finance loan, followed by the credit cards, then the car loans.

Leave a Comment