A family budget helps achieve financial goals and can help you enjoy more of life with loved ones. Without a plan, I couldn’t imagine being able to give and save each month. It would be challenging to meet all of our family expenses as well as plan fun things to do with our family.
Consider these 30 family budget tips that are certain to improve your finances:
Family Budget Tips and Ideas
- Create a family budget with a spreadsheet. We use Dave Ramsey’s Cash Flow Plan template to create our baseline monthly budget and simply plan everything out using a spreadsheet.
- Involve your spouse in creating the family budget. Make sure the budget is something both can support, is realistic and can hold you accountable to spending decisions each month.
- Review and update your family budget each month and plan for irregular expenses. Does the car oil need to be changed this month? It’s best to keep a running list for such expenses and the month’s they typically occur.
- Set aside savings in a sinking fund for irregular expenses that can’t be funded within one month’s income. Christmas is a good example. Vacation is another one. Separate savings accounts work great for saving in advance for these expenses.
- Automate budgeting and expense tracking using money management software. Money management software saves time and helps improve accuracy.
- Spend a couple of minutes each day tracking and reviewing expenses, categorizing them as well as keeping you check account in balance. It only takes 5 – 10 minutes if done regularly and money management software that links to your checking account makes this super easy.
- Set aside 15-20 minutes each week for a money date or family budget meeting and talk about budgeting and spending decisions. Save all financial matters for this discussion unless it’s an emergency. This keeps you and your spouse from talking about money at the dinner table or worse, on a date night!
- A family budget will never be perfect. Over time, spending history can be reviewed using your personal finance software to learn about spending habits and how much has been spent for different areas. This is great information in helping making adjustments to your budget and spending habits.
- Include age appropriate kids in budgeting decisions. Show them how much money is available for certain categories. Let them help in making a spending decision and show them how the budget is effected after money is spent in a particular category.
- Consistent overspending means something is wrong. Either the budget is inaccurate, or it’s not being followed. Don’t cheat the budget. Overspending roles from month to month and the hole gets deeper, especially if you’re drawing off of savings or worse, using credit cards to fund your lifestyle.
- Spend with cash or a debit card prevents overspending. Use credit cards only for categories in which spending can be controlled. Gas is a good example but there are few, in my opinion, this works.
- Don’t budget too many categories. Pick the major ones needed to track closely: entertainment, food, clothes, etc. Make sure there are budget categories for the most important priorities too. And always plan for saving and giving first, otherwise, you’ll never find enough money for these areas.
- For a super easy budget try using a bucket budget. Create one account for savings and giving, one account for bills and another account for everything else. Have paychecks divided between these accounts. In doing so, there is always money allocated for the most important priorities.
- Use family budget software that also provides a mobile app (most do). Enter each transaction and categorize it right after spending. Doing so removes the need to enter spending and reconciling with your checking account at the end of a long day.
- For irregular paychecks, create a budget and determine how much is needed each month for living expenses, savings and giving. When paid more than needed to cover monthly expenses, save the excess so it so it will be there when a paycheck isn’t received one month, or it’s too small to cover monthly expenses.
- Stick to a budget by always going into stores with a plan or purpose and avoid impulsive purchases. Always go shopping with a plan!
- Run reports in personal finance software every few months and definitely yearly to see how your money is being spent. It’s eye opening to see how much is spent at the grocery store, eating out and in other areas. Ask yourself if it’s possible to trim these expenses down and save more money.
- Cut out bad habits that can result in spending too much money. Drinking excessively, smoking, coffee are among several things can waste money.
- Budget a buffer so there is room in case overspending occurs. It’s a good idea to leave an extra $50 or $100 in the checking account in case it’s ever needed. Forget that the buffer exists and try to increase it each month.
- Use spending guidelines to help you plan your budget and also check to see if your spending is out of line.
- It’s okay to budget using paper, a spreadsheet or software. There’s no right or wrong answer. It’s a personal decision based on what works best for you. Just budget.
- Budget fun money to have some freedom to spend. Fun money is a no questions asked category and it can be spent any way you like.
- Make a list of all regular bills and their due dates. If paid more than once per month know what paycheck will be used for each bill and plan accordingly.
- Create an idea list to make spending adjustments. List things in order of priority for decreasing spending, increasing income and even selling things. Married couples can work together to incorporate them into their budget each month.
- Remember that a good budget balances to zero. Income minus expenses must always equal zero. Every dollar must have a job to be in control of your money. Dave Ramsey even named his new money management software “EveryDollar.”
- Don’t hesitate to meet with a budget coach. There are free coaching services from Compass – Finances God’s Way that will help you analyze spending and create a plan. They also provide assistance with paying down debt.
- Don’t forget to consider a spending plan, or sinking fund, for common children expenses: summer camps, swimming lessons, sports activities, kids clothes, school supplies, snacks and fun. It may be necessary to prioritize or reduce spending in other areas if these expenses are important for your family.
- Don’t panic if more is needed than planned. Reduce spending in the current month in another category if possible, or know that spending will need to be reduced next month to make up for it. However, overspending month to month will eventually make it difficult to live. Try to get control of it as soon as possible!
- Create a plan to get out of debt. Fewer debt payments provide more money to allocate towards expenses and financial goals in a family budget. The more flexibility, the better. It’s called financial freedom!
- Automate savings. Make sure there is a category for savings in the family budget, but set up automatic deposits to savings accounts so there isn’t any temptation to spend that money.
What do you think about these family budget tips? Do you have any to add?