It's Sunday night. The kids are asleep. I'm staring at a spreadsheet and a $4,600 monthly nut that used to be $4,100. That's the reality of budgeting for a family of four in Denver right now. Our expenses have gone up across the board — groceries, utilities, gas, insurance, you name it. And like most families, our income hasn't kept pace.
I'm Marcus Thompson, a Certified Financial Counselor. I teach people how to budget for a living. And honestly? Even I'm struggling to keep up. So if you're feeling behind, you're not alone. Let me show you exactly how my family budgets in a 3.9% inflation environment, with real numbers. No fluff. No judgment. Just math.
Our Monthly Expenses: The Hard Numbers
Before I share the numbers, a quick disclaimer: every family is different. We have two kids — Olivia, 7, and Ethan, 5. We own our bungalow in the Berkeley neighborhood, bought in 2018 before prices went completely insane. We have one car payment. We have Cooper, a Labrador who eats roughly 15% of the household budget. I'm not joking about that last part.
Here's our actual average monthly budget for the first half of 2026:
| Category | Monthly Cost | Notes |
|---|---|---|
| Mortgage (PITI) | $2,100 | Bought before the 2020-2022 surge |
| Groceries | $1,180 | Up from $850 in 2023 |
| Utilities | $395 | Electric, gas, water, internet |
| Car payment | $340 | One car paid off, one remaining |
| Car insurance | $185 | Up from $150 in 2024 |
| Gas | $260 | Rachel commutes to Aurora |
| Health insurance | $640 | Family plan through Rachel's employer |
| Childcare | $520 | After-school care for both kids |
| Phones, streaming | $165 | Cut from four services to two |
| Kids' activities | $210 | Dance, soccer, swim lessons |
| Dining out | $110 | Down from $280 in 2023 |
| Home maintenance | $160 | Sinking fund for repairs |
| Medical copays | $95 | Prescriptions, dental, vision |
| Clothing | $145 | Up from $100 — kids grow fast |
| Miscellaneous | $155 | School supplies, pet, gifts |
Total monthly expenses: around $7,260. Our after-tax household income is about $7,800 a month. So we're saving about $540 a month. That's not a lot. One emergency — a furnace, a transmission, a dental crown — could wipe that out in a day.
I'm sharing this because I want you to see that even a financial counselor isn't flush with cash. We're comfortable, but we're not rich. And every month, we have to make trade-offs.
Where We've Cut Back (And Where We Haven't)
Over the past two years, we've had to make some painful cuts:
Dining out: We used to eat out twice a week at places like Root Down or Work & Class. Now it's once every two weeks, usually something cheap like Chipotle or a local pizza joint. That saves about $170 a month.
Streaming services: We had Netflix, Hulu, Max, and Disney+. Now we rotate — two at a time, switching every few months. That saves about $32 a month.
Vacation: We used to take a week-long trip to the mountains every summer. Last year, we did three long weekends. This year, one long weekend to Steamboat. That saves about $1,800 a year.
Groceries: We switched to store brands at King Soopers, started meal planning around sales, and cut back on expensive cuts of meat. We're still spending $1,180, but without those changes, it would be $1,450.
Where haven't we cut? Healthcare. Childcare. The mortgage. Those are fixed. We can't reduce them without major life changes.
The Emotional Side of Budgeting Under Inflation
Honestly? The hardest part isn't the math. It's the feeling that you're losing ground no matter how hard you try.
I remember looking at our grocery bill in January 2025 and seeing $1,050 for the first time. I literally said, "What the hell did we buy?" Rachel just looked at me. We'd bought the same stuff we always bought. It just cost more.
That feeling of helplessness — that's what eats at you. You start questioning every purchase. You feel guilty for buying organic milk for the kids. You skip a haircut for yourself so you can afford a birthday gift for a friend. I've had clients break down in tears in my office over this. They're not bad with money. They're just getting crushed by forces outside their control.
If that's you, I want you to hear this: it's not your fault. Inflation isn't your fault. High rent isn't your fault. You're not lazy or irresponsible. You're surviving in an economy that's stacked against you.
Three Strategies That Are Actually Working
Strategy 1: The zero-based budget. Every dollar has a job. We don't track every penny, but we do assign every dollar of income to a category before the month starts. If we overspend in one category, we have to underspend in another. There's no "extra" money floating around. This has cut our impulse spending by at least $120 a month.
Strategy 2: The 30-day rule for non-essentials. If we want something that's not a necessity — new clothes for us, a gadget, a fancy dinner out — we wait 30 days. Most of the time, we forget about it. The things we still want after 30 days, we budget for intentionally.
Strategy 3: The sinking fund system. We save small amounts each month for irregular but predictable expenses: car repairs ($80/month), home maintenance ($160/month), holiday gifts ($60/month), back-to-school clothes ($45/month). When those expenses hit, we don't panic. The money is already there.
Frequently Asked Questions
How much should a family of four in Denver spend on groceries?
In 2026, a realistic grocery budget for a family of four in Denver is $1,100 to $1,400 per month if you're cooking most meals at home. We're at $1,180 and that's with careful shopping at King Soopers and Sprouts, buying store brands, and meal planning. If you're spending over $1,500 and still ordering delivery, you have room to cut.
What percentage of income should go to housing in Denver?
The old 30% rule is a fantasy in Denver. Most families I counsel spend 35-45% of gross income on housing, and some hit 50%. If you're over 50%, you're in crisis territory. Between 35-45% is uncomfortable but manageable if the rest of your budget is tight. Under 30% in Denver usually means you bought your home before 2020 or you have a roommate.
How do I budget when my expenses keep rising but my paycheck doesn't?
You have two levers: increase income or decrease expenses. Most people focus on cutting because it feels more controllable. But at a certain point, you can't cut anymore. If that's you, focus on income: ask for a raise, switch jobs, pick up a side hustle, or rent out a spare room. Rachel started tutoring nursing students online last year. It brings in an extra $350 a month. That's not nothing.
What is a sinking fund and how do I start one?
A sinking fund is a savings account for expenses you know are coming but don't happen monthly — car repairs, holiday gifts, back-to-school clothes, home maintenance. You divide the annual estimated cost by 12 and save that amount monthly. When the expense hits, you pay cash instead of using credit. Start with one category. Even $50 a month into a "car repair" fund gives you $600 after a year.
Is it possible to follow the 50/30/20 rule in Denver?
For most Denver families, the classic 50/30/20 framework doesn't work because needs alone consume 60-70% of income. I recommend a modified 60/20/20: 60% needs, 20% wants, 20% savings and debt payoff. If your needs are over 70%, you need either more income or a structural change like moving, getting a roommate, or refinancing. The rule is a guideline, not a prison.
Budgeting isn't about being perfect. It's about being consistent over time. We still get coffee. We still order pizza on Friday nights. We still take the kids to the Denver Zoo sometimes. We just do it less often and more intentionally. What would your budget look like if you stopped trying to be perfect and just tried to be honest?
