Your Six-Step Guide On How To Create A Family Budget


A growing family means an ever-increasing financial responsibility. It’s not simple, though. If only we were born with money management skills, but no, we’re not. It is something that we should learn. However, you won’t know this “money management” thing in schools. Knowing it starts within your home. 

Lucky you if you have parents teaching you the basics of handling money. But not all are lucky enough to have parents like that. What usually happens is we end up discovering things along the way. 

Family budgeting is quite challenging, and it takes discipline, courage, and consistency to achieve goals. Once you slowly make budgeting your habit, you’d be able to pay your living expenses without any pressure. Debts will become manageable. You may be able to set aside enough money for emergencies and even for extras.

Do you know what’s more rewarding than these? You’ll get peace of mind. It’s one way to prevent money anxiety.

Here, we curated six easy steps on how to create a family budget. Discuss this together with your partner. Remember these words: “two is better than one.” 

Read up and begin your Family Budgeting Journey.

Why is family budgeting crucial?

“Come what may.” These three words usually happen when it comes to finances—thinking that we can easily find money to sustain our daily needs. This kind of mentality would not help at all. 

Family budgeting is crucial since it’s the only way to make ends meet without being burdened. It teaches you and your partner (even your child) to take control of money. Not money taking control over you. 

Communication is the key to make your family budgeting effective. Having a proper and honest conversation will result in excellent brainstorming where the family can develop a solution. 

Who will lead the budgeting? 

One who is a natural saver should lead the family’s budgeting. But it doesn’t mean that he or she alone will do the thing. It should be both of you. 

What I meant about “lead the family’s budgeting” is someone who’s in charge of preparing things. What to be discussed, tools to be used, everything you need to talk about the matter. 

After preparing things up, you can start brainstorming for solutions. If no one’s a natural-saver-type of person, find someone who has more free time to do it.  

Six Easy Steps To Create A Family Budget

We cited six steps to help you start your family budgeting. You can take notes as you discuss this matter with your family. 

Step 1: What tool would you use for budgeting? 

There are ways on how you do your family budgeting. Would you prefer to do it in a traditional way by jotting down everything on your notes? Or do it digitally?

For some, writing down your budget in a notebook is way effective. It is where you take note of every movement of your cash-the in and out of your money. You have complex files where you store all your receipts, deposit slips, and other documents relating to finances. 

However, busy moms and dads don’t have enough time to record every single transaction. Thanks to the advancement of technology and information, things have become more accessible and simpler. 

Many budgeting software and mobile apps make the job effortless! It’s fun and easy to use. All you need to do is type in all the information. Calculations are adequately programmed. You can also easily track your expenses through it. 

Step 2: Setting Family’s Short-Term and Long-Term Goals

Set goals specifically and categorize them if it’s for a short-term goal or for long-term. Short-term are those you pay good for 12 months or lesser. 

Let’s say your home needs some fixing and you want to include that in your budget. A renovation loan is different from a home loan which falls under long-term. You can get loan home improvements from moneylenders who offer lower interest rates.

Before you can begin to manage your money, you need to identify what is important to you. Then you have a foundation to decide what you want to do with your money. Write down what is important to you and use your list to help you determine goals for your money. 

Step 3: Evaluate Your Finances (Income VS Expenses)

Before we proceed with tracking expenses, let’s take a look first at your income sources. Where do you earn money? Are you employed or self-employed? Do you have any side hustle other than your primary source of income?

List down all your family’s household income sources. Indicate how much you earn monthly. Be specific in listing down your sources. Be sure to include everything such as your monthly wage after taxes, commissions (if any), child tax benefits, pensions, and other regular income. 

After income, identify all your family’s expenses – the fixed and variable expenses. For easy tracking, categorize them. That includes utilities, secured debts, unsecured debts, discretionary spendings, and seasonal expenditures. Again, be specific in listing down your expenses. 

By looking at these lists, you’ll know where you get the money and where all your money goes.

Step 4: Focus on Needs, Lessen your wants.

Observe your list and compare income versus expense. Which weighs more? The money you spend or the money you earned?

If your answer is the latter one, then it’s time to get rid of non-essential spendings. Take a look at the spendings list you made. Identify which are the things you need at home and work. Everyone should focus on things that are essential and learn to lessen up the person’s wants.

Your choices play a significant role in this. One simple example of that is buying car accessories. Yes, your car may have additional functions and will look nicer. But do you think without car accessories, your vehicle becomes useless? If no, then that’s not important.

Step 5: Make a Blueprint of your budget plan.

Map out everything by creating a budget blueprint. This way, you’ll know where money should go. This map will lead you to the right path—a path where you should be planting more sources of funds than expenses.

You can use the standard rule of thumb: 10%-10%-80%. It is about dividing your income. Set aside 10% for savings, 10% for emergencies, and 80% for your expenses.

Families with existing debt prioritize it first before dividing their income. They settle it first before jumping to other payments—schedule and never miss any repayments. If you got a loan from the legal licensed moneylender or cash mart in Singapore like toa payoh money lender, you can choose a flexible payment term to fit your budget plan.

Utilize every money left. Commit yourself to set aside money regardless of how much you can. The important thing is you have something to back you up in times of unanticipated life events.

Step 6: Take Action!

Everything we share will become useless if we don’t take any action. Remember, action speaks louder than words.

Monitor your progress by setting a meeting. You can do it weekly and eventually become monthly reporting. If the result is not that positive, keep pushing and learning. Make sure that everybody’s doing each part. Ask questions and do brainstorming with the family.

Bear in mind that family budgeting isn’t just about tracking. Remember this saying, “it doesn’t matter how much you earn. It’s about how much you keep.”

Everything’s about the process. You can never find any shortcuts or magic formula to get more money. The goal is to get the most from the money you have.

About Author

LaDonna Dennis

LaDonna Dennis is the founder and creator of Mom Blog Society. She wears many hats. She is a Homemaker*Blogger*Crafter*Reader*Pinner*Friend*Animal Lover* Former writer of Frost Illustrated and, Cancer...SURVIVOR! LaDonna is happily married to the love of her life, the mother of 3 grown children and "Grams" to 3 grandchildren. She adores animals and has four furbabies: Makia ( a German Shepherd, whose mission in life is to be her attached to her hip) and Hachie, (an OCD Alaskan Malamute, and Akia (An Alaskan Malamute) who is just sweet as can be. And Sassy, a four-month-old German Shepherd who has quickly stolen her heart and become the most precious fur baby of all times. Aside from the humans in her life, LaDonna's fur babies are her world.

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black sheep
2 years ago

thanks for sharing such infomartive artilce