How To Make A Budget Plan For Your Family


create a budgetDo you have a budget already? Is it actually working for you?

Having debt is one of the main reasons for stress and anxiety in America. Most people have debts that need to be paid (student loans, mortgages, credit card loans, etc). In order to pay them on time and at a good pace, a budget plan is required. The sooner you pay your debt, the better!

According to Bls, the average American saves a 4.7% of income per year and a 76% admit to living paycheck to paycheck. (source:  CNN Money)

I think budgets are really important and every family should have one. Even if you are living by yourself, having a budget will help you cutting unnecessary expenses and saving more money every month.

If you think that budgets are for poor people, you are wrong! I say it again, everyone should have a budget.

I’ve found out that most of my friends who earn high salaries, save less money than other friends with less monthly income. This is another reason proving that budgets are for everyone.

Every time you hear the word “budget” you may think it’s boring, but in fact, it can be fun. In my personal case, what motivates me the most is checking that month after month we’re able to stick to our budget and achieve our financial goals.

Related post to budgeting and saving money:


Steps To Create A Budget Plan For Your Family

1. Why you should create a budget.

A budget is the best way to track your income, expenses and how much money you are saving every month. Also, it helps you managing your cash flow and knowing where the money is going every month.

Creating a budget will help you to:

  • Take control of your financial life.
  • Spend less and save more.
  • Reduce stress and anxiety.
  • Pay off your debt sooner.
  • Save more for retirement.

You really need a budget if you are spending more than you make each month or you have debt. You will not make much progress if you don’t know where your money is going every month.

A budget can help you pay down your debt quicker and turn your monthly balance from red negative to green positive.

Recommended post: 16 Ways To Make Your Life Easier In 2017

2. Create a monthly budget worksheet.

You can create an electronic budget spreadsheet in Excel or use Personal Capital. For some people, doing the monthly budget on a piece of paper works too. It’s up to you.

But if I were you, I would download my free monthly budget worksheet.

Tip! I strongly recommend that you check out Personal Capital if you are interested in taking control of your finances. Personal Capital allows you to manage all your financial accounts from one dashboard. You can connect all your accounts together (mortgage, retirement account, credit card account, investment account, etc). The best thing is that is completely FREE!

3. What to track in your family budget plan.

If you want to create a budget that works you need to track all your income and expenses. Tracking the income is easy but keeping a record of your expenses is another story. You need to gather all your receipts and bank transactions.

Tip! Try to pay as many things as you can using your debit card so you don’t need to gather many tickets. Everything will be electronically recorded in your online banking.

After the first month, you’ll be shocked by your results. You’ll be able to figure out where your money is going and how you should start controlling some of your expenses categories. This will help you to create a realistic budget and start taking control over your family financial life.

4. How to keep track of your income.

If you use the Monthly Budget Worksheet you’ll be able to keep track of your income every month.

Things that you can include as part of your income:

  • Work salary.
  • Part time jobs.
  • Rental properties.
  • Dividends.
  • Passive income streams.
  • Investments.

There are two ways of keeping track of your income, one is using the fixed income (minimum income you always receive each month) and the variable income (this one includes things that vary from month to month).

I always recommend using the fixed income to create your budget, otherwise, in months with a low variable income, you’ll not be able to achieve your budget. However, if your variable income is on average very high, you can use an average variable income for your budget.

5. How to keep track of your expenses.

When you make a budget, you should keep track of all your expenses, the obvious ones and the not as obvious. You’ll be surprised of how much you spend once you finish all your expenses and add them up.

These are some of the most common expenses you should include in your budget.

  • House expenses – This is your mortgage/rent, taxes, utilities and home insurance (if you have one).
  • Car – This is all your car expenses such as your monthly car payment, petrol, insurance, tax road and maintenance.
  • Transport – If you go to work by public transport or you use it very often, you should include this category in your expenses.
  • Food – Include all the groceries. This is one of the expenses which takes most of the time because generally, you’ll have quite a few receipts by the end of the month.
  • Clothes – Include all the clothing purchased for your family. Include shoes and accessories too.
  • Home essentials – Include house cleaning products, shower products, etc. Anything you can think you use in your daily life.
  • Television, Sky, Netflix, etc.
  • Internet and cell phone contracts.
  • Entertainment – Include dinners, cinema, going out for drinks, parties, gifts, etc.
  • Travelling – I like to save some money every month in a separate account so I can then use it for travelling whenever we want. (If you set a fixed amount it will help with your budget).
  • Other expenses – Any other fees and subscriptions (like gym or charities you support), pet expenses, unexpected expenses, etc.

You can add as many categories as required. Some of the above will not apply to you, so feel free to modify the list according to your needs.

Tip! You can create as many saving accounts or categories for different purposes. Some examples are: wedding, retirement, debt payoff, a new car, collegue savings, etc.

If you have your own business, you should make another different budget, you don’t want to mix things up.

6. Communication is the key when creating your budget plan.

If you are living with your couple, even if only one person manages the finances at home, the other person should know about the family’s budgeting plan too.

My wife and I meet once a month to check out how we did during the past month and plan for the next one. This helps us to be aware of where we are in terms of savings and to meet our financial goals.

A budget is a compromise between you and your couple and it will never work if the other person is not aware of it.


7. Readjust your budget.

Based on my own experience, you’ll find that the first time you create a budget it’s difficult to stick to it. I recommend checking your budget on a regular basis (at least during the first few months) until you feel comfortable with it.

It doesn’t have any sense to make a budget that is far from the reality. If you set an amount of $150 for entertainment and then you spend $500, you need to think where the problem is. Is your budget very low? Or is it that you are spending more than what you should?

Updating your budget is some of the homework you need to do every month. Changes in your salary, bills, transportation, etc will lead to changes in your budget.

8. Print your budget and stick it to the fridge.

You don’t need to do it but this is what we do at home. It works wonders, it reminds us that we have a budget and it motivates us to follow it.

If you download my Monthly Budget Worksheet you can do it too.


This is all for today. I really hope this may help you as it does for my family. Believe in a budget and stick to it!

Do you have a budget already? What budget categories would you include?

About Francisco Anes 89 Articles
Francisco Anes is a personal finance blogger who loves blogging and spending time with his family. He works from 9 to 5, Monday to Friday but his dream is to reach financial freedom. On his blog, he writes about saving money, budgeting, pay off debt and making money blogging. Francisco lives with his family in Cambridge, UK.


  1. Thanks for sharing! You shared a lot of great points – including readjusting your budget which is so important. (And something I often forget to do.) We have a detailed family budget in place, but it’s always good to look over everything again.

    • Great Jane, it’s always good to review the budget once in a while, in particular when the family circumstances change.

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