Money·3 min read

3 Tips for Creating (and Sticking to) a Family Budget

accessibility, family budget tips
Design: theSkimm | Photo: iStock
April 15, 2022

Without a clear picture of what enters and exits your bank accounts, it’s really hard to stop overspending.Which is why families need a budget. It’s the best way to make sure you don’t go overboard.But many households don’t have one. And it’s common for those who do have one to use it incorrectly. Hint: Your budget should help you track and plan your spending.

#Goals. How do I get my family budget right?

Before you list your expenses, sit down as a family and create a goal together. Drawing a blank? Have a convo about your values and priorities.Think: Are you all ready to get away together again? Does one parent want to stay home with the kids? Is early retirement top of mind for you and your partner? (Psst…here’s help figuring out how much you’d need to retire.) Don’t rush the discussion. Goals can make or break your family budget.

Next, let’s talk numbers. Here are three tips for creating (and sticking to) a family budget:

1. Determine your monthly income.

Once your goals are set, figure out how much your family brings in on a monthly basis. That includes salaries, child support payments, alimony. Don’t skip over any reliable sources of income.

If your income changes (a lot) month to month, no worries. Calculate your lowest earning months and use that number as your income when creating your budget. And keep in mind, you’ll likely need to make adjustments (more on that in a minute).

2. Tally your costs.

List your fixed expenses. In other words, the bill amounts that never change. Like rent or mortgage payments, car payments, and any other bills that are consistent.

Have expenses that aren’t the same every month? Go with the max you’d spend on each. What’s the most you would spend at the grocery store in one month? What about gas? (Hi, inflation.) Keep more irregular bills like back-to-school clothes and babysitting in mind, too.

And don't forget about debt. Your repayment plan should be part of your budget. Need help coming up with a strategy? Pick one of these ways to pay off debt. If you go with the snowball method, start by paying off the smallest balance and work your way up. Or go with the avalanche method and start with the debt with the highest interest rate. Most important: whichever method you choose, stick to it.

3. Time to do the math.

Subtract the total amount of your expenses from your total income. This is your discretionary income. And you always want it to be a positive number.

Wait. My discretionary income is negative.

That means you’re overspending. To get back to a positive number, adjust your expenses. Your variable costs are likely the easiest to tweak.(Do you really need that cable package?) And remember, there are plenty of ways to make more room in your budget for the things you actually want and need.

How do I stay on track with my new budget?

You can use a pen and paper to track your spending throughout the month. Or download a budgeting app to make it easier.The key: Don’t stop tracking. And evaluate your spending at the end of each month to spot anything you can do differently next month.

Oh, and include the kids in the conversation. Because kids need to be good with money, too.


Remember, family budgets aren't just for tracking your spending. They're a great tool for planning your spending, too.And don’t forget to let the kids in on the budget convos. 

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