How to Plan a Family Budget

You are not alone if you have checked your account balance and wondered where your paycheck disappeared to. Many of us don’t keep track of our spending or even give much thought to the things we buy. If you were to keep track of everything you buy in a week, you could opt to make your morning coffee at home instead of going out every day. Alternately, you may decide that hiring a sleep consultant to get your baby to sleep through the night will be a better use of your money than paying for channels you won’t watch. Making a spending plan gives you the freedom to direct your financial resources as you see fit. Here you’ll find helpful information regarding why and how to create a family budget.


Review Your Revenues

Identify your monthly income and that of your partner, if relevant. This could be easy if you receive two consistent payments each month. However, this is a step that will require more deliberation for certain households.

Be careful to include any additional money you receive from sources such as a side hustle, a business you own, or contract work. If possible, try to take an average of your revenue rather than reporting each individual payment. If your monthly income fluctuates, you could benefit from making conservative projections and putting any surplus toward savings or paying down debt.

Describe Your Costs

Once you have an estimate of your income, you can turn your attention to your expenditures. Expenses like mortgage/rent, utilities, groceries, diapers, formula, and other necessities should all be factored in.

Subtract your necessary expenses from your revenue first. The leftover funds should then be put toward debt repayment, retirement, education savings, and emergency funds. The leftovers can be spent on family activities like going to the movies, eating at restaurants, taking trips, etc.

Budget Your Money

You must have a method to ensure that you do not go over your budget. This is especially important when you have a family budget, where two or more people are sharing and spending the money. Martin suggests using spreadsheets, bank statements, receipts, and budget apps to assess your family’s actual spending.

“I use an app called You Need a Budget to track exactly how much we spend each month,” says Andersen. “If I’m not using everything I allow myself for a certain category, I can reassess and allocate the excess toward savings or another category that I wish I could have more to spend in.”