Family Budget Ideas

A family budget is simply a plan detailing where income is going to be spent. Family budgeting can save money by curbing overspending and ensuring that bills get paid on time, avoiding fees and penalties. A family budget that works includes different categories for all types of spending: rent or mortgage, utilities, discretionary spending and groceries. Other categories that might not come up as often but should still be allotted for include clothing, gifts, medical expenses and car repair.

  1. Emergency Fund

    • Most financial experts agree that establishing an emergency fund is a crucial step in family budgeting. How much to save varies based on each family's situation. When deciding how much to save, consider how long it would take you to find a new job if you became unemployed. Some families may only need three months' worth of expenses saved up, while other families would feel more comfortable with a year's worth of expenses. Once you've established your emergency fund, remember that it is in fact for emergencies only. If you ever have to dip into the fund, replenish it as quickly as you can.

    Zero-Based Budgeting

    • Zero-based budgeting means that every dollar of your income is accounted for. No matter what your income is, when you use zero-based budgeting your income minus your expenses will always equal zero. When developing your budget, if you have any additional funds left after planning for necessary expenses, apply them to savings, paying off debt or discretionary spending. If your expenses are greater than your income, then you will need to either find areas to reduce spending or increase your income.

    Envelope System

    • The envelope system is a cash-only way of budgeting. Although some expenses, such as rent payments and utility bills, do require writing a check or using a debit card, others do not. Groceries, discretionary spending and clothing are all categories that work well with the envelope system. Simply place the allotted amount of cash in each category's envelope and spend accordingly. The system won't work if you move money from one envelope to another throughout the month, so keep that in mind when spending. If there is money left over at the end of the month, you can choose to roll it over to the next month or apply it to savings or debt repayment. If you seem to consistently run out of funds in one area but have extra money in another, consider altering your budget the next month. Alternatively, consider buying gift cards for each category. Many grocery stores sell gift cards, which you can use to allot funds for your food budget. Prepaid debit cards will work, too--just use a permanent marker to indicate the category the card is for.

    Track Spending

    • There are many online tools and computer programs that can help you see where your money goes. If you're overwhelmed by planning your budget, these tools can help immensely. You'll be able to see areas where you can easily cut back in order to have more money available for necessities. You might be surprised by how much you spend on magazines each month, for example.

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