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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. 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, travel, 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 with their children. Likewise, if parents do not manage their money properly, their children may not learn those habits either.


If you don’t feel like an expert money manager, you are not alone. In fact, many 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. 

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

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. Not only that, but this can be a good time to teach your middle schooler about how to make and manage money. 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.

  • Have 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 a home, vacations, 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 and charges for things your family needs to pay for such as: 

  • Rent/mortgage
  • Car payments
  • Childcare 
  • 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 the items your family needs, and that you pay for regularly, but the amount may change from month to month, for example:

  • Groceries
  • Childcare 
  • 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.

Setting and Reaching Savings Goals

Once you’ve used your budget to figure out how much you are earning and spending, the aim is to have money left over to spend on things you want.

Many families go deeper into debt because they suddenly need to fix a water heater or buy a new car and must use a high-interest credit card or loan. If possible (and if you don’t already have one) it’s also a good idea to set aside a fund for the unexpected. Put this money aside in a separate account, only to be used in case of emergency.

There is one basic guideline for saving money: Spend less than you earn. Depending on your circumstances, sometimes this may be possible, while other times it can be a challenge.

Sit down as a family and plan: Set a goal together– like taking a family vacation. Set a deadline and estimate how much you need to save to achieve your goal. 

Review your spending. Are there items you could spend less on? Can you prioritize paying off high-interest credit cards or loans, or transferring them to lower-interest options? Ask your teen for their suggestions on where and how they think their family could save money, and what non-essential expenses they might be able to do without. 

Open a fee-free savings account dedicated to saving toward your goal.

Decide how much you’ll contribute every month, and how you’ll do it (for example, set up a direct debit from your main account).

Start saving. Review progress toward your goal regularly.

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 middle schooler about money. 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 your started.

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.

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.

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.

Money Podcasts for Kids:  This is a list of podcasts that your children can listen to learn more about money.  Listen with 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: – DEAD LINK

Grades 7-8: – DEAD LINK

Contact & Collaborate:

There are many kinds of financial assistance opportunities available to help families get through periods of economic challenges, like a job loss or unexpected medical bills, etc. Being aware of these resources and understand 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, or child care assistance or resources for other basic needs, such as clothing and personal items.
  • Many states have Community Action Agencies (CAAs) that can aid 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 decide for late mortgage or credit card payments. They may be willing to waive late fees for certain circumstances. 
  • Most organizations that offer childcare 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):  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

Saving and Budgeting

Teaching Kids About  Money (article):  A list of ways to teach kids financial responsibility age-by-age:

Articles, Activities + Apps for Teaching Kids about Money:

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