Take Control Of Your Family’s Finances With A Family Budget

Whether you’re starting a family, growing your family or navigating the next stages of life with your family, budget planning is an important step to stay in control of family finances. Managing money as an individual requires smart planning, too, but once a spouse, children or other family members are in the mix, a multitude of factors make it even more critical to keep up with costs. Ideally, tracking your family’s expenses and identifying savings goals will help cover costs and then some so you can contribute to your future and build a solid nest egg. As your partner on the journey, our team at Rivers Edge Bank is here to help you learn how to plan a family budget that balances the day-to-day unpredictability of life with long-term financial security.

What Are The Benefits Of A Family Budget?

Having a family budget provides peace of mind and empowers you to set and achieve your financial goals, big or small, whether it’s a new car, a fun vacation or retirement. A realistic budget also helps you plan for unexpected expenses and keep your family finances in line in the meantime.

Ultimately, budgeting isn’t just about tracking numbers; it’s about taking charge of your financial future. Here’s a closer look at why budget planning is vital for all households, no matter your stage of life or income level:

• Achieve Financial Security: A budget ensures you earn, spend and save with purpose, reducing the likelihood of living paycheck to paycheck.
• Develop Peace of Mind: Tracking family expenses to know exactly where money is going reduces financial stress and eliminates unpleasant surprises.
• Set Realistic Goals: Whether it’s saving for a house, paying off debt or planning for retirement, a household budget brings clarity to your goals and the steps required to achieve them.
• Prevent Debt And Overspending: Without a budget, it’s easy to overspend. A budget keeps unwanted debt at bay by setting boundaries.

What Is A Good Budget For A Family?

There’s no single piece of budget advice that works for all families, but one common approach to follow is the 50/30/20 method: 50% of your family’s monthly income goes to essential living expenses, 30% toward treats like dining out or traveling and 20% into savings.

The bottom line is how to make the most of your current income. The first priority is daily living expenses, like food, shelter, clothes for you and your kids and paying bills. This is where a family budget can help. List your income and known expenses and balance those to see where you stand. If having enough to cover all your expenses is tough, you might need to cut back somewhere, find a new job or start a part-time job.

If you have extra money at the end of the month, concentrate on savings. A top savings priority should be an emergency fund that you can fall back on if something unexpected happens, such as a job loss, medical expense or broken refrigerator. Experts recommend tucking away three to six months of typical living expenses. Another top priority should be saving for your retirement. Contribute as much as you can to a retirement account, such as a 401(k) at work or a Roth IRA with a trusted financial institution, and if your employer offers matching funds make sure you’re taking advantage of what is essentially free money.

How To Plan A Family Budget

Managing your family’s finances can feel overwhelming, especially when unexpected expenses seem to pop up every month. Creating a household budget ensures you have control over your finances, reduces stress and helps you achieve your financial goals. So how to plan a family budget that works for you? As your local bank, we’re here to help you save and grow your money to make your budget more flexible. We’ll walk you through a step-by-step process for planning a realistic budget that takes into account all of your family’s immediate needs and long-term dreams.

1. Track Your Income

First things first: you need to know how much money you're bringing in. This includes your paycheck, any side hustle income or any other regular sources of money or paychecks coming in from family members. Be sure to calculate the net income, which is the money you receive after taxes and other deductions. This is the actual amount you have available to spend. Spending only what you can afford is one of the most important pieces of budget advice for families that are developing a household budget. Once you know how much money you have, you’ll know how much you can afford to spend and what you can save.

Pro Tip: For irregular income, estimate your monthly take-home by using an average from the last six to 12 months.

2. Track Family Expenses

Now, let's look at where your money is going. It's important to track all your expenses, even the small ones. A complete understanding of your expenses is key. Start by making a list of the money you spend—and what you spend it on—keeping in mind that the number is likely to vary from month to month. If possible, review all your bills from the past year or at least the past few months. The more information you can include, the more likely you are to have a realistic picture of your actual expenses. If you can find your expenses for a full year, get those totals and divide by 12. That will give you average monthly totals to use for your budget.

Pro Tip: Choose a budget planning method. Whether it’s using a spreadsheet, a mobile app or a simple notebook, pick a tracking system you'll commit to.

Common Family Finances To Consider

Here are some important family expenses and considerations to track:

• Fixed payments, like rent or mortgage payments, car payments, student loans and your internet bill, which remain the same each month
• Variable costs, like gas, electric and water bills you pay monthly but for varying amounts
• Ongoing expenses, such as fuel for your car and groceries, as well as dining and entertainment costs
• Irregular expenses and cash, including miscellaneous items like clothes, gifts, medical co-pays or prescriptions, donations to charities and small purchases
• Long-term savings, like contributions to a retirement 401(k) or a college fund for children

Set up the expenses category of your household budget so you can track family expenses individually. This helps you monitor potential areas to cut back on and can serve as a reminder to ensure you’ve paid a bill. It also prevents long-term savings goals from getting lost if you account for these contributions in your monthly expenses. Remember, contributing to a retirement account or long-term savings fund is money growing for your future, even though you can’t necessarily spend it right now.

3. Create Your Family Budget

Now for the main event! Put the numbers together and see where your money is going compared to where it needs to go. Ideally, your income will be higher than your expenses, leaving you with money for savings and your financial goals. If your expenses exceed your income, make adjustments to avoid debt. Try categorizing funds using the 50/30/20 framework to see which areas you need to reduce spending in and how much you need to set aside to meet that 20% monthly savings threshold.

For example: are you spending too much on entertainment? Making your own fun at home can keep cash in your wallet. Do you need to drive as much as you do? Reducing time in the car will cut your gasoline and maintenance costs. Ultimately, the goal of budget planning is to spend less than you earn. Use any extra money each month to put in a savings account at your trusted bank.

Pro Tip: While you can use a budgeting app, spreadsheet or even a simple notebook to track your income, you can also use the same tools to keep track of your expenses. Many free and paid budgeting apps or templates are available to help simplify the whole process to best fit your busy lifestyle.

4. Regularly Review & Adjust

Your budget isn't set in stone. Life changes, and so will your financial plan. Essential budget advice for families is to make budget planning an ongoing process. Review your family budget regularly (ideally monthly or even quarterly) to make sure it's still working for you. Are you overspending in certain areas? Have your income or expenses changed? Adjust your budget as needed to reflect your current financial situation.

Pro Tip: Set a recurring reminder on your phone or calendar for a budget check-in every 30 days.

5. Expect Unexpected Expenses

Life throws curveballs. A sudden car repair or an unexpected medical bill can derail your finances if you're not prepared. That's why having an emergency fund is crucial. Aim to save at least three to six months' worth of essential living expenses in your emergency fund. Use a high-yield savings account to keep this cash safe but accessible.

Pro Tip: Start small—saving even $10–$50 a month builds the habit and adds up over time.

6. Set Financial Goals

What do you want to achieve with your money? Paying off debt? Buying a house? Retiring comfortably? Setting financial goals gives your budget purpose. Your budget should align with both short-term and long-term goals. To keep your family finances on track, make sure your goals are SMART: specific, measurable, achievable, relevant and time-bound. For example, instead of "save money," a SMART goal would be "save $5,000 for a down payment in 12 months" or “save $50,000 for a home down payment in five years.” Incorporate these goals into your family budget to monitor how close you're getting.

Pro Tip: Break big goals into smaller milestones to stay motivated. To reach $5,000 for a down payment in a year, a monthly savings goal could be around $420 per month.

Common Mistakes When Budget Planning

Ever feel like your money just disappears? You're not alone. Managing finances can be tricky, but it doesn't have to be overwhelming. There are a few sneaky but common budgeting mistakes to avoid if you’re often feeling burdened by your budget. If you catch yourself falling prey to any of these common budget mistakes, start taking the baby steps necessary to quit them now—don’t let them get worse over time!

• Not Tracking Everything: Not accounting for an expense can throw off your budget. Even small purchases, like a daily coffee, can make a big difference over time.
• Overcomplicating The Process: Choose a system that’s easy to stick to, whether it’s an app or a simple notebook.
• Failing To Adjust: Life changes fast. Your budget needs to be flexible enough to adapt when it does.
• Not Setting Realistic Goals: Unrealistic goals can lead to frustration and discouragement.
• Leaving Out Emergencies: Without an emergency fund, unexpected expenses can derail your financial stability.

Our Team’s Budgeting Advice For Families: Start Saving

Building a family budget can be challenging—and maintaining it over time even more so. Working with a financial professional for budget planning is one way to take the burden off of you. They can help you sort through the best ways to cover expenses as well as recommend how and where to save.

When you’re ready to start saving, our personal banking team at Rivers Edge Bank has a variety of savings solutions for you, including traditional savings accounts, high-yield certificates of deposit (CDs) and individual retirement accounts. Remember, with the right account and team on your side, your savings aren’t just savings: they can act as income to grow your family finances through interest over time. Once your daily needs are covered, think about building other savings, whether it’s for retirement, a down payment or a nest egg for your children in the future. Contact your local Rivers Edge Bank to learn more about savings options for you and your family. We make it easy to track family expenses with online and mobile banking so your budget stays top-of-mind—and your savings do, too!

Discover How REB Can Support Your Budget Planning & Start Saving Today

Learning how to plan a family budget is a good first step to start saving and contributing to your long-term financial goals. As your partner on the journey, we’re here to help put your budget in action with savings accounts and solutions to keep your money safe and growing with you. Contact our local bankers at Rivers Edge Bank to secure your family finances with a savings account today.

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