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Family Finances And Household Budgeting

How can I . . . ?

  • manage family finances responsibly?
  • create a household budget?
  • set and reach savings goals?
  • learn what economic assistance resources are available to my family.
  • help my child begin learning about finances

Talking about Family Finances

Money and finances can often be a source of stress for couples and families. Family members have different needs and priorities at different times. Unforeseen expenses like medical bills and home or car repairs can put strain on a family’s bank account and drain savings. Parents and caregivers may also have differing ideas about how to manage finances and what to spend money on.

For all those reasons and more, it’s a good idea for parents and caregivers to spend some time reviewing family finances and creating a simple household budget. Budgeting can help families spend and save wisely and plan for the future. Communicating openly about money management and planning a budget together can also help relieve money-related stress. 

Why It Matters

These days, it can be especially hard to keep track of spending. Automatic bank withdrawals for utility bills, credit card payments, video streaming, and other subscriptions may be convenient and help avoid late fees. But it often means that people don’t have a clear idea of how much money is going out every month.

Establishing a family budget can help you keep track of spending and ensure that you can pay for necessities, as well as save money for “extras” that family members can enjoy together, like dining out or taking a vacation. It can also help to ensure that long-term goals like sending the kids to college, traveling, and being financially secure after retirement can be fulfilled. 

In addition, the habits that parents and caregivers have around money can also influence their children’s attitudes and behaviors around it.  Being financially responsible means that parents will be able to model and instill good habits in their children.  Likewise, if parents do not manage their money properly, their children may not learn those habits either.  In the following sections, you will gain more insight and ideas about how to do this with your family.


If you don’t feel like an expert money manager, you are not alone. The majority of people don’t follow a strict budget or track spending carefully. But most of us can make improvements in our spending habits, and even start saving, just by being more aware and following some basic guidelines for household budgeting.

Check the habits that describe you (and your spouse/partner, if applicable) related to household budgeting and family finances. 

  • have a budget or a system for keeping track of monthly income, spending, and savings
  • make a conscious effort to spend less than I earn
  • contribute monthly to a personal savings account
  • use cash whenever possible and avoid using credit cards 
  • (if applicable) keep aware of and utilize economic assistance opportunities available through government and community organizations to help with food, utilities, rent, etc.) 
  • have a college savings account for each child
  • take advantage of employer-offered retirement savings plans
  • regularly review and update family finances and progress toward savings goals
  • have both a personal and savings account
  • have an emergency fund with some money set aside for unforeseen expenses
  • communicate openly and regularly with spouse/partner (if applicable) about family finances and money management
  • discuss future savings goals with my spouse/partner and children
  • teach my children how to manage their own money
  • involve my children in financial planning and budgeting conversations

Review and reflect on your responses. Which habits do you already have? Which ones could you start doing?  Read the next sections to learn more suggestions and tips for family finances and household budgeting.

Connect & Communicate:

The responsibility for handling family finances often falls primarily on one adult or the other (when there are more than one), or it may be a shared effort. Whatever the arrangement is in your family, communication is an important part of managing money well. Open discussion between parents/caregivers and including children in budgeting and financial planning conversations can help all family members understand financial needs, spend responsibly, work through financial challenges, and save money for the future. Below are some guidelines that can help you communicate with your spouse as well as some ideas for teaching children some financial literacy.

Creating a Family Budget

A family budget is a useful tool to help you and your family 

  • get a clear idea of total monthly income and expenses
  • identify and separate financial “needs” vs. “wants” 
  • keep track of how much you spend on essentials, like rent, food, utility bills, etc., as well as non-essentials
  • pay off debt, like credit cards and student loans
  • save for your children’s future education
  • save money for the things family members want, such as a down payment on their own home, taking a vacation, dining out, etc.
  • set aside money for emergencies and unforeseen expenses, for example, car repairs
  • avoid late fees, overspending, and debt

The basic process of creating a budget involves the following steps:

1) Write down your net household income.–This is the total amount of money each working adult takes home after deductions (health insurance, social security, etc.)

2) List your monthly essential “fixed” expenses. This includes set monthly fees for things your family needs to pay for like 

  • Rent/mortgage
  • Car payments
  • Child care 
  • Utility bills (electricity, water, heating fuel)
  • Phone/Internet
  • Cable
  • Health insurance
  • School fees/tuition
  • Credit card bills/Loan payments/Alimony 

3) Figure out* average monthly spending on “flexible” expenses: These are items your family needs, and that you pay for regularly, but the amount may change from month to month, for example:

  • Groceries
  • Child care 
  • Clothing/shoes
  • Transportation/Gasoline/Parking  
  • School supplies 
  • Gifts

* Use bank and credit card statements and receipts from the past 6 or 7 months to come up with an average total spent each month.

4) Figure out average monthly spending on “non-essential” expenses:  

  • Gym memberships 
  • Hobbies/subscriptions
  • Haircuts/cosmetics/shopping 
  • Entertainment (Movies/Concerts/Online Streaming) 
  • Trips/Travel
  • Dining out  
  • Camps/Lessons/Classes

5) Add up the total of all monthly expenses (fixed, flexible, and non-essential), and compare it to your monthly net income. The goal is for your net income to be higher than your expenses.

6) If possible, subtract your average monthly expenses from your income. The remaining amount is your “disposable income”– money you can save for the things your family members want, or put away for the future. 

If your expenses are higher than your income, it’s probably time to review your spending and see where you could cut back, starting with your “non-essential” expenses.

Check out the following apps and online resources to help with family budget planning

Activities to Help Teach Your Kids About Money

The way you model financial responsibility with your spouse will go a long way in teaching your children about money.  Researchers David Whitebread and Sue Bingham of the University of Cambridge have found that many of their habits around money are set by age 7. 

There are also a lot of ideas and resources for how to bring financial literacy into your household. Below are just a few ideas to get you started.

Earn Allowance:  You can make children earn allowance through household chores that are additional to the ones that they are required to do.  For example, they may be expected to clean their rooms and help with dishes, but they may get paid for walking the dog or mopping the floor.  Here is a great resource for chores and allowance.

Start Money Jars:  You can have different jars for different purposes.  For example, start with Save, Spend, and Share jars.  The Save jar is for something special they want.  The Spend jar is for whenever they are at a store and want to buy something and the Share jar is for donating or buying a gift for someone else.  Encourage them to always have at least a little in each jar.

Decorate a Piggy Bank:  Find a ceramic container that your child can put their money into and decorate it.  While doing this art project, you can talk about money and some of the things you want them to know about this topic. 

Give them a Budget for Outings:  If you go to a baseball game, the pool, a movie, or other places where they may want to buy something, give them a certain amount and let them be in charge of budgeting. It is important to remember not to give extra cash after their money runs out or else they won’t understand this concept. 

Start a Bank Account:  Many banks offer debit cards for kids that help them build good money habits.  Check out this one from Chase and see if your bank has a similar system in place for kids your child’s age. 

Outschool:  These are short online classes geared towards kids that help teach them about money, saving, and business. Watch one of them with your child and talk about what they learned and how they can apply it to their lives.  Click here for classes. 

Money Podcasts for Kids:  This is a list of podcasts that your children can listen to learn more about money. Listen to them and discuss what they have learned and how they can apply it to their own lives.

Lessons to Teach Financial Literacy (designed for teachers but  can be adapted for parents): 

Grades 3-6: BAD LINK

Contact & Collaborate:

There are many kinds of financial assistance opportunities available to help families get through periods of economic challenges, like job loss or unexpected medical bills, etc. Being aware of these resources, and knowing how to access them can help families prevent major financial stress and avoid going deep into debt.

  • Check with your town, city, or state Department of Public Service website to find resources for food, fuel, housing assistance, or resources for other basic needs, such as clothing and personal items.
  • Many states have Community Action Agencies (CAAs) that can assist such as financial help with residential utility bills, if the utility has issued a disconnection notice. If you have received a disconnection notice and need help, contact the CAA nearest to where you live.
  • As early as you can, speak to your bank about college savings plan options.
  • Call your credit card institution if you need to make arrangements for late mortgage or credit card payments. They may be willing to waive late fees for certain circumstances. 
  • Most organizations that offer child care or youth programs have sliding scales or offer scholarships. It never hurts to ask!

Continue Learning:

Check out these resources to learn more about Family Finances and Household Budgeting.


David Ramsey (podcast): A financial expert discusses various topics related to eliminating debt and saving money.

Investopedia (article) How to create a budget with your spouse

The Golden Rules of Managing a Family Budget

Managing Family Finances in Seven Steps

Setting Goals to Save Money

Teaching Kids about Money

Consumer Financial Protection Bureau (website)  Money As You Grow  Age-appropriate activities that parents can do with their children to help with financial literacy

Articles, Activities + Apps for Teaching Kids about Money:

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