How to Create a Family Budget: Important Tips

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When you have a family and children, the issues related to finances are seriously exacerbated. To avoid this, you just need to be able to spend money wisely. How can this be learned? What will help save and manage a family budget? The best advice and recommendations will be presented in this article. Planning family budget for a month is the first step on the way to fulfilling your material desires.

How to Create a Family Budget: Important Tips

How to create a family budget

A family budget refers to all financial gains and expenditures of a family per month. Many don’t know how to spend money correctly. Hence, when distributing the income, certain problems arise. What can help not fall into the financial hole, get bogged down in debt, live within your limits, and also save some money for a rainy day? There are many different tips and recommendations. The following tips are the best and most effective.

Analysis of purchases

The first stage is an analysis of all the purchases made last month. Some are not able to allocate funds correctly. And so they find themselves in a financial pit. To understand what was wrong, you need to look at all the purchases. It is likely that a lot of money goes on not the most important things. Quite often, people, after receiving a salary, spend most of their finances on entertainment and then they don’t have enough for the necessary. Of course, it is wrong. For this reason, it is required to analyze all purchased. Each person certainly has a whole list of things without which he or she can live. Only the most thoughtful will not have a similar graph. But such people perfectly plan a family budget even without analysis.


How to manage money correctly? This is a difficult question. After all, each person has their own income, as well as own requests for life. And priorities are also different for everyone. After the analysis of purchases, it is necessary to break them into several components. Namely: high priority – desired – unnecessary. Accordingly, everything that is not included in the first column can be excluded from the spending list in the future. And first of all, spend money only on the most necessary and important things for life. The rest of the funds should either be saved or spent on what you want. At first, it will be difficult to determine priorities, but over time, this problem will disappear.


How to spend money on products? How to make a family budget in a right way? Many people ask this question. Practice shows that huge expenses are associated with food. That is why it is important to remember several rules that contribute to savings. There is nothing difficult about this. It’s even enough to distinguish among the products that are the necessary ones and those without which you can live. It is recommended to cook at home and not to go to restaurants every day. Good housewife can cook most of the expensive delicacies at home. For example, it can be a delicious pizza – inexpensive and tasty!

Save checks

The next advice is to save checks. All purchases that have just been made need to be fixed. And checks help in this matter very well. They also contribute to a correct analysis of everything purchased. The main thing is not to forget anything. This is the key to successful budget planning. With checks, you can understand what is more expensive, what items can be excluded. Actually, this is very good advice. But it will be extremely difficult to follow it. Even travel on the bus will have to be fixed. However, the presence of checks significantly simplifies the accounting of purchases, especially when they are recorded in the appropriate spending table.

Balance at the end of the month

Accordingly, all this will help answer how to spend money correctly. Most likely, some amount at the end of the month will remain “free”. It can be spent on additional desires, for example, on a family dinner in a cafe or on a gift for a child or a loved one. The main thing is that the “free” amount of money can be spent at your own discretion or saved. It is recommended to distribute funds from time to time so that the balance at the end of the month increases. Not necessarily, but it is desirable to do so. When all necessary purchases are made and mandatory payments are closed, you can give some freedom in spending. This is how to create a family budget easily.

Best family budget apps

So, it’s decided! You start a family budget. Many people try to be economical so they carefully monitor their incomes and expenses. How? Most often, income is written in a notebook, but this is not entirely convenient since a sheet can be lost and a notebook can’t provide a variety of reminders. And we advise you to download a convenient free app for your smartphone. Surprisingly, there are also people who have never used such applications. However, these applications can contain all the necessary information and developers have filled them with useful functions. These functions can’t be implemented with an ordinary sheet of paper. That is why apps only win in such situations.

1. Home Budget Manager Lite

This is the best family budget software 2018. This is a very simple, but at the same time, useful family budget software. Its main function is to keep track of your spending and income. An intuitive interface helps enter all the data and divide it into categories. Circular infographics visually demonstrate the main groups of expenditures by sector. The built-in family budget calculator helps not to make mistakes in calculations.

2. HomeBudget with Sync

The aim of this application is the same as the previous one – to keep track of your finances. But this application is a little more difficult to use due to more functions. For example, here you can get statistics of salary and expenses in the form of a schedule for selected categories and a given period. You can also program regular incomes or expenses, which the application will enter independently.

3. Best Budget

This is considered the best family budget app. This is the assistant in accounting for personal finances. In this application, you can divide a budget into different categories and monitor the balance or overruns for a particular expense group. For example, by determining the budget for food, the application will show how much more you can spend on products and how many days remain before the end of the selected period. This will help not to spend extra money thus wait for the next salary without debts.

4. PocketGuard

Many users choose this application thanks to a beautiful and user-friendly interface. You can break your expenses into categories and track expenses separately. There are several kinds of diagrams that will visually show you the statistics of expenses. Information in the application can be synchronized with other devices. Also, PocketGuard will give you advice on your financial account and show the dynamics of its state.

5. Mint

The application will allow you to more closely monitor and plan your personal budget. A convenient family budget planner will not allow you to spend too much. The application allows you to connect and manage several wallets at once. The analytics in the form of graphs and diagrams will clearly show where your money goes.

Family budget example

There are different methods and ways how to properly plan a family budget for a month so that you have enough money for all planned spending and also for the desired purchases or travel.

1. Method “10-20%”

One way to intelligently organize the expenditure of a family budget is called “10 percent”. It saves at least 10% of the total income each month. Experts on personal finance advice to immediately determine the purpose for which the expenditure of these funds is planned: a large purchase, a trip, a vacation. This will serve as an additional motivation not to spend the deferred funds, but to multiply them and achieve the desired. In addition, this money will be a “financial pillow” in case of unforeseen circumstances. It is recommended to get an additional bank card and arrange automatic transfer to it 10 or 20% of the received salary amount. It is better to leave an additional card at home to avoid the temptation to spend money from it. A typical family budget is most often based on it.

2. The rule of “seven envelopes”

On the forums on personal finance problems, many experts respond positively to the method of the “rule of 7 envelopes” and give advice on how to properly use this method of planning a family budget.

The rule of “7 envelopes” is to immediately distribute salary in 7 envelopes for the main things:

Obligatory payments. The first envelope is for “compulsory payments”, there is the amount of money necessary to pay utility bills, mobile communications, the Internet, and repayment of debts.

The cost of children. In the second envelope, the money provided for the maintenance of children: kindergarten, school fees, sports activities, tutors.

Funds for food. The third envelope is money for food. Understand how much your family needs for a month, using the methodology for calculating the costs for 1-3 months.

Household and personal needs. The fourth envelope is for clothes, shoes for adult members of a family, household appliances, furniture, interior items, etc.

Money for entertainments. In the fifth envelope, you save money for family entertainment, rest, and vacation.

Savings. It should include a certain percentage of the amount of income, but not less than 10%. This money is an untouchable stock, if you suddenly need to take some money out of this envelope, you should refill it at the first opportunity.

Joy. This money is left after the mandatory spending from the previous month. They can be spent on pleasant gifts for relatives and friends.

The “7 envelopes” system works only if you strictly adhere to the limits of the allocated amounts for certain needs and never take money for the allocated category of expenses from other envelopes.

3. Method “4 Envelopes”

This method is similar to the previous one and helps manage a simple family budget. It also consists of the creation of spending tables and the organization of their management. After receiving a salary, it is recommended to immediately divide money for payment of mandatory payments and bills. After that, the remaining amount should be divided into 4 envelopes by the number of weeks in a month (in the last envelope you need to put the amount one third higher than in the 3 previous to live on this money for 9-10 days, not 7). The main rule of “4 envelopes” is to spend only that money that is allocated for a week, try not to take funds from other envelopes. If there are unspent funds at the end of the week, they can be spent on family entertainment, recreation or gifts.

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