How to Create a Family Budget that Works

How to Create a Family Budget


Do you have a family budget? A plan to pay for the new driver’s car AND a family vacation, while also socking away money for retirement?

For singles, creating a budget is pretty straightforward. You usually know how much money is coming in and you only account for your own expenses. Plus you’re the only one who has to actually agree to a budget.

But a family budget is a whole different scenario! Families can have multiple sources of income or they can be one-income families with many spenders. You need to track EVERYONE’S expenses and income and it has to work for everyone, which can be tough.

A lot of families will resist the “B” word. “Budget” can sound like a punishment to some and if you go about it wrong, you’ll end up with a lot of pushback and a family budget that doesn’t work.

I’m going to show you how to get everyone involved and excited and walk you through a step-by-step method to successfully create a household budget that helps you meet your goals.


How to get family members excited about the family budget!

This might sound crazy, but it’s actually possible to get excited about a family budget. So how do you do it? Here are two ways you can churn up some excitement.

Create a Family Goal

Has the family been wanting to go on vacation? Is there a new driver in the family that needs a car? Brainstorm some ideas before presenting them to the family. You’ll want to choose something that everyone can be excited about.

For example, You can start off by setting up a family meeting and asking the family where they would like to go on vacation this year or next. Get everyone involved and excited. Then you can let them know that you all will need to save money in order for it to happen (this is where the budget will come in).

Create a Challenge

You may think a challenge would be something people don’t want to do BUT in fact, most often it’s what drives people to get things done. Many of us are competitive and don’t want to lose a challenge.

For example, the challenge could be whoever saves the most money in a month or whoever can spend the least. Whichever works for your particular family. You can even create fun printables to track everyone’s progress or set up a board in the kitchen to keep track of who is winning.

Create a prize or reward but nothing that will break your budget. Something like no chores for a week/month or even a longer curfew for a couple weeks etc. Think out of the box!

A challenge will allow you to create a family budget with everyone on board so that later everyone will know how to budget even when there is no challenge involved in the future.

Now that you have your family excited about budgeting, we now need to budget correctly. Creating your budget while everyone is motivated is the best time!


Create a Family Budget

1. Take inventory of ALL family income.

Have teenagers that work? Get them involved in the budget! Do they hand over their checks to you or do you let them budget it themselves? Decide how you want to handle their money and expenses.

For example, if they make $200 a week and give you their check you can count it as income and have them track their own expenses. You can either give them a set amount of cash, set up a debit card or have them ask you for money each time they need to make a purchase.

Having them participate in tracking expenses and learning the budget on their own is a great way for them to learn.

If a certain source of income fluctuates from month to month, use the lowest amount or average it out. Any extra money can go into a savings account. You would rather underestimate than overestimate when it comes to income.

2. Track everyone’s expenses for a month.

Keep all of your receipts, and ask all family members to turn theirs into you each day (if you’re in charge of this part or just let them save them until its time to go over the budget again).

You can also use an expense tracking worksheet, budgeting software or a budgeting app to make it easier for everyone to track their own expenses.

Make expense tracking as easy as it can be and let everyone track their expenses how they want to but make sure it’s accurate. You want each family member to have some control so they stay motivated.

3. Add up the household monthly expenses.

You want to start with all fixed expenses and other bills. Separate debt payments into their own category so you can get those paid off. You will get a better picture of the households other expenses after a month of tracking them.

Believe me, you think you know how much you’re spending but you don’t and this is why budgeting is important. Plus the power of actually writing down and seeing the numbers on paper is amazing!

4. Get the family together monthly and discuss ways you can trim the budget.

Most likely things aren’t going to be perfect the first time around. Getting input from other family members will help you determine which expenses are necessary and which ones could be cut down or eliminated. Maybe you or your spouse could start taking lunch to work instead of eating out, or maybe the kids can drop an extracurricular activity.

In addition to individual expenses, discuss how you can cut down on the electric and gas bill, groceries and other necessary family expenses. Get the kids use to turning off lights and other electronics.

Consider such things as carpooling or taking public transportation, buying more generic foods and adjusting the thermostat. Wear a sweater or robe to keep warm.

Estimate how much you can save on regular expenses, and cut the completely unnecessary items out of the budget. Then see where you stand.

Remind the family of the goal or challenge and take note of how everyone is doing. Keeping everyone accountable is what will keep the family budget working.

The key here is to eventually end up with a surplus for savings. That savings, however, has to have a place to go. It cannot just be “extra money”. The best place for it is a savings account!

If a family vacation was the goal put it there but make sure you also have money going into retirement and into an emergency fund as well.

How to create a family budget that works for your family!

Being Realistic about the Family Budget

One reason that family budgets often fail is that they’re not always realistic. It’s great to cut down on expenses, but sometimes we tend to go too far right away and that’s when they fail!

For example, cutting cable out of the budget completely might look good on paper, but we all need a little diversion every now and then and it could cause some friction in the home.

Try getting rid of smaller features first like movie channels. Or come up with a “cool alternative” to cable TV, like Amazon Fire TV and an HD Antenna (which is a great alternative by the way) since most movies can be streamed inexpensively.

Cutting things slowly out of your budget will make it far less painful.

If you or another family member go to the coffee shop every morning, try skipping a few mornings before you go cold turkey.

Budgets are meant to change.

Each month go over how you did and if the changes you made helped. How much did you save? Did you miss what you cut out? If you start cutting right away before you track then you really don’t get the full picture of what you’re saving.

Are there items you cut but are causing friction? See if you can go another month without them or try coming to an agreement on whether to add it back in or eliminate another item in its place.

Monthly budget meetings can be much more friendly when everyone works together and feels like their voice is heard.

Creating a family budget can help keep spending under control, leaving more money to pay down debts and save for future goals (like that family vacation!). But in order to succeed, monthly family budget meetings are essential and keeping everyone accountable is key!

Your efforts will be rewarded, however, with less financial stress and more money in the long run!

Create that family budget today! Already have a family budget? Feel free to share your own tips as well so we can all learn.


Hi, I’m Kari and I am a personal finance blogger over at Personal finance is often stressful and I like to make it as easy as possible for everyone. I created Free Budget Printables and an E-Course to help make managing money simple, fun and stress-free for your family! Get your freebies here.

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