Create A Family Budget That Works


It’s important in today’s economy to ensure you’re staying on top of your money.  A family budget is the first step in doing this.   Too often, people spend without really knowing where their money is going each month.  This leads to stressful situations at the end of the month when your family is left pinching pennies.  Even if you are making enough money to cover your spending habits, knowing where it’s going is still important.   Would you rather be saving money towards retirement or a big expenditure each month or blow it all on Starbucks?

family budget


So you need to create a family budget.  The advantages of a family budget are huge.  First, you ensure that you have enough money to take care of all of your needs.  Secondly, you can identify areas where you are wasting money.  This leads to the next benefit, saving more money.   Lets face it, most of us probably don’t save nearly enough.  Here are the steps my family took to live on a family budget successfully.

  1. Track Your Spending – This is where you need to track every dollar you spend and categorize it.  You can use any method you like.   There are web based checkbook apps, mobile apps, and of course desktop based apps such as Quicken.   Many of these even include mobile apps that let you record transactions on the go.
  2. Analyze Your Spending – After the first month, take a look at where your money went.  You may be surprised at how much you’re spending on specific categories.  For my family, we were shocked to see how much we spend eating out each month.  Look for areas you want to cut back on.
  3. Define Your Family Budget – Now take the results of your analysis and write down your budget for the next month.    Realize that you may have to make adjustments later but you have to start somewhere.  Also, there should be no money left over.  You want a zero based budget, meaning that any “extra” should be going into savings.
  4. Get Some Envelopes – We use the envelope budget system.  Basically, you take an envelope and write “Groceries” on it.  Then get cash out of the ATM and put the amount budgeted for groceries in the envelope.  Do the same with other categories such as “Eating Out” or “Gas”.  We found that it wasn’t practical to use envelopes for every category, but we use them for groceries and eating out.  The benefit here is that you can see in your envelopes how much you have left to spend for the month on that category.  It’s nice to not have to touch your bank account during the month also.
  5. Make Adjustments – As time goes on, you’ll see areas where you need to adjust your budget.  That’s no problem, just make the adjustments and keep going.  A family budget will always be changing slightly so don’t think you are locked into it.

It will be hard at times to stick to the family budget.  Why not just order that pizza even though you have used all of the eating out money for the month?  Because that’s the point of a budget…to get your spending in check.  Some people say that if you have money left over in a category each month then that’s “free money”.  I disagree, put that into savings and then adjust your budget to reflect the amount.  Remember, you want every dollar accounted for every month.

Once you get in the groove you will see that having a family budget reduces a lot of stress by ensuring that you have all of your expenses accounted for.  Give it a try and you won’t be sorry.  Leave us a comment below with what methods you use in your family budget.

Here are some resources to help you:

Clear Checkbook


Dave Ramsey Budget Forms

EEBA (Envelope Budgeting)

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3 thoughts on “Create A Family Budget That Works”

  1. Great tips on budgeting! I know when you have a child it is easy to overspend and not realize it. I especially like the idea about envelopes. It is something I had never considered before.

    Aaron Brinker aka DadBlunders

    1. When you use the envelopes it really is foolproof if you don’t cheat. You have what you have, and that is it! It helps to keep the checking account clean too because you don’t have 19 thousand debit for starbucks, snacks, and lunch.

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