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Planning Your Family’s Budget

By Staff
Read Time: 5 Minutes

Dealing with family finances is not always easy, which is why we often put planning a family budget on the back burner. A recent study by the American Psychological Association found that 72% of Americans feel stressed out about money. Juggling the demands of raising a family and dealing with family budgeting can be overwhelming. But even though a family budget can be tough to deal with, creating one and sticking to it can help reduce stress and keep everyone on track.

Some families don’t want to talk about money challenges. Budgeting discussions often lead to budgeting debates. But setting a budget is a great way to agree on how money is spent or saved. Having a family budget helps reduce the conflicts and frustrations that can come with worrying about money.

A family budget affects everyone in the family. So, think about the information you want to share with your children. Their ages will play a role in what you talk about. Teaching kids the importance of handling money is a valuable life skill.

Share some of your family budget planning with your kids.

Four Steps for Making a Family Budget


List your income.

Write down all sources of your family’s monthly income. This could include paychecks, automatic deposits, income from contract work or work done on the side, interest from savings, or investment income like stock dividends.


List your monthly bills.

Write down all the payments you make each month. These could include your mortgage or rent, utility and phone bills, insurance premiums, loan payments, dues, school tuition, church tithes, groceries, and transportation expenses (car maintenance, gas, bus fees, toll fees). Then write down all the extra items that you spend money on such as eating out, entertainment, gym memberships, and TV or streaming subscriptions.


Find ways to save.

Subtract your monthly expenses from your monthly income to know how much you can put into savings. It’s not always easy to save for the unexpected, but financial planners recommend having enough money to cover three months of expenses in case of emergency or job loss.

Below are two ways to plan your budget with some money going to savings.

  • 70/20/10 split. This means 70% for bills and everyday living, 20% for savings; 10% for debt.
  • 80/20 split. This means 80% for bills and everyday living and 20% for savings.

Set the budget.

Start by creating a budget for one month to get a feel for how it’s working for your family. Keep notes about what works and what doesn’t and make any necessary adjustments to the amounts you set. Your budget will be a work in progress, so don’t worry if you don’t get it exactly right at first!

You can make adjustments to your family budget once you see how it’s working.

Set Budgeting Goals

It’s a good idea to set both short-term and long-term budgeting goals. Financial advisors recommend that you pay off debt as soon as possible, especially debt that has a high interest rate. They also recommend that you regularly put money into a savings account. Think about long-term goals, too, such as investing or saving for college, retirement, a family trip, or an expensive item or down payment.

Pick a Budgeting Tool

There are lots of budgeting apps that can help you easily track spending. They’re a great way to quickly see where your money is going, and you can check them as often as you like.

Tips for finding a budgeting app:

  • Check the app’s ratings.
  • Select a free app that helps you plan your spending, not just track money you already spent.
  • If you don’t use a bank, find an app that doesn’t require that you sync with financial accounts.

In addition to budget planner apps there are also savings apps that can help make saving a little easier. If you have a limited budget and are worried about saving, you can choose an app that looks at your spending and finds the right amount that can be saved. If you are not used to saving money, try an app that sets aside an overcharge on all purchases you make so that money automatically goes in savings. There are even apps for couples that can put their savings in a free joint account.

Find a budget planning tool that works for you.
Good to Know

Housing expenses such as rent and mortgage payments should take up no more than 25% of your net income, or income after taxes.

Let Kids Help

When you’re happy with the budgeting plan you’ve drafted, share it with your children so everyone knows where money comes from and where it goes. This will help kids understand why a new toy or game is not something you can always buy for them. Budgeting is also a way to help kids understand the importance of saving and spending responsibly. Below are ways your kids can begin saving.

  • Younger children can save their allowance to buy things they really want and are worth waiting for. Saving money is a great skill for your children to learn at an early age.
  • Working teens can save some of their paycheck to use for going out with friends or buying their own clothes. Teaching teens to be responsible with money will prepare them for being on their own.

Including your kids is a great way to role model the importance of budgeting and not overspending. It’s never too early to teach kids self-control in spending, the benefits of saving, and the sense of accomplishment that come with buying something they’ve saved for.

Let you kids participate in the budget planning to teach them how to manage money.

Save Money Every Day

Small changes to daily routines can make a difference. Try some of these tips:

  • Turn off lights when you’re not in a room.
  • Use energy-efficient light bulbs.
  • Use cold water to wash clothes.
  • Don’t run the washing machine or dishwasher during hours of peak electricity demand, when some electric companies charge more. Check your utility’s rates.
  • Run water only when you need to.
  • Switch from single-use items to reusable ones:
    • Use cloths rather than paper towels.
    • Use plastic containers instead of plastic wrap and bags.
    • Refill your water bottle rather than buying disposable ones.
  • Buy generic medications, foods, and cleaning supplies.
  • Limit eating out and eat all the leftovers from meals at home.
  • Walk or take public transportation when you can to save on gas.
  • Enjoy family time with free activities you can find through neighborhood organizations and community centers.
Get help

Need parenting help now?

The Texas Parent Helpline is available 24/7.

Budgeting is a great way to gain control of your finances.

Stick with It

Getting the hang of budgeting may take a few months, so expect some bumps along the way. If you’re trying to pay off debt, cut spending where possible and use that money for debt payment. Little savings add up! If your finances are in pretty good shape, now is the time to save for the unexpected and build that three-month buffer.

Don’t let money worries get you down or paralyze you. Budgeting is a great way to gain control of your finances and help your children learn an important life skill. And when you meet your goals or stick to your monthly budget, reward yourself and your family! There’s nothing wrong with an occasional treat for a job well done. It doesn’t have to be big. It could be ordering pizza or going out for ice cream—but celebrate your success and keep up the good work!

Have a question about planning your family's budget?

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This article was written by staff.

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