How to Create a Family Budget

For singles, creating a budget is relatively easy. They tend to have a good handle on how much money they have coming in, and when tracking expenses, they only have their own to think about. But creating a family budget is a whole new ball game.

Most families have multiple sources of income. And when there are multiple spenders, that makes things much more confusing. This is one of the main reasons that families lack a formal budget. But having a budget and sticking to it can greatly improve a family's financial outlook.

Making a family budget may be tricky, but it can be done. Here's how.

1. Take inventory of all income. If a certain source of income fluctuates from month to month, use the lowest amount or average it out.
2. Keep track of all expenses for a month or so. Keep all of your receipts, and ask all family members to turn theirs in to you each day.
3. Add up your monthly expenses. Be sure to include bills, debt payments, groceries, and everyday expenses such as lunch money and transportation costs.
4. Get the family together and discuss ways you can trim the budget. 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.
5. In addition to individual expenses, discuss how you can cut down on the electric bill, groceries and other necessary family expenses. Consider such things as carpooling or taking public transportation, buying more generic foods and adjusting the thermostat.
6. Estimate how much you can save on regular expenses, and cut the completely unnecessary items out of the budget. Then refigure it and see where you stand.
7. If you end up with a surplus, allocate a portion of it to savings. If you're in the red, go back and rework the budget until you have more income than expenses.

Being Realistic

One reason that family budgets often fail is because they're just not realistic. It's great to cut down on expenses, but sometimes we tend to go too far. For example, cutting entertainment out of the budget completely might look good on paper, but we all need a little diversion every now and then.

Instead of cutting such things out of the budget completely, consider finding ways to lower the cost. Going back to the entertainment example, maybe you've been going to dinner and a movie as a family twice a month. But eating in and renting a new release would be much cheaper, and you would still get to spend quality time together.

Individual expenses can also be tricky. This can be resolved by allocating a certain amount for each family member to spend each week. If someone spends his entire amount before the week is up, reevaluate his expenses and adjust if necessary.

Creating a family budget can help keep spending under control, leaving more money to pay down debts and save for future goals. But in order to succeed, close monitoring is essential. Your efforts will be rewarded, however, with less financial stress and more money in the long run.


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Typically I try to avoid politics in my blog. I want this to be a place that is fun and informative. However, in the crisis which Illinois is currently in, I can not stand by and not say my say...

If the budget proceeds, the way it stands now, 20-50% of human services will be cut. This is unacceptable, and unfair. The population that I work with and I have served for the past 15 years is the developmentally disabled children and adults of Illinois. These individuals are ENTITLED to these services. How dare the state attempt to balance a mess they got us into at the cost of those who are not responsible.

Over the past 20 years their has been a collective effort to get individuals with disabilities out of overcrowded warehouses (i.e. the state operated facilities). Most of the current state op's are in decertification, have multiple allegations of abuse and neglect, are understaffed, and fall short of the minimal expectations set forth by the Illinois Dept. Of Public Health. The effort has been successful in getting most individuals into smaller community integrated facilities. These individuals are thriving in these smaller settings. They have become part of the communities, they vote, they work (if able), they attend day training, they participate in community events, and more. Not to mention the jobs and the money these small homes bring into communities.

Currently the cuts to social and human services in the Illinois budget will cause these small group homes to go under. They can not function with a 20-50 % cut. Most of these homes are already borrowing payroll because the state is 6-8 months behind in their reimbursements of these homes. Thus, facilities are forced to borrow the money from banks, resulting in outrageous interest charges. How can they further bear a 50% cut. Anything over a 5-8% cut will result in these facilities closing down. There are hundreds of these facilities in Illinois.

The employees will lose their jobs. The money funneled into small communities from these homes will be lost (gas purchased at the local gas station, groceries from the local the store, 16 indiviudals getting hair cuts at the local salon, 16 people eating lunch every Saturday at the local McDonalds, etc. etc.) This is a detrimental chain effect.

When these homes close, where will these people go? Onto the streets? Or back to these state operated facilities (that unions are already attempting to keep open!). I have been informed that many of the legislatures were willing to vote for a tax increase to keep this budget cut from happening, however, the pork tied to the tax increase is what is holding this up. Some representatives have tied a new highway to the tax increase, or a new museum, etc. Are you kidding? We are talking about people's lives here. How dare they attach this pork to the value of a human life!

I urge everyone, whether you are a resident of Illinois or not, to drop an email to the Illinois Government. Tell them that their tactics are absurd! Tell them that you value all human life, and you will not visit a State that engages in this manipulation. Please, speak for those who can not advocate for themselves. Please do it today!

For more information see http://taxpayersforillinois.blogspot.com/2009/06/balanced-budget-you-be-judge.html#comment-form

Thank you!


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