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Family budget

How do you manage your finances with a family budget?

Most people take it for granted that there is only one way to use money. If you look at your habits at the household level, your family budget will show you what results even a relatively small change will lead to in the long run.

Family budget

Why do you need a family budget?

Many people think the budget is the same as listing the money already spent. However, this is only a minor part of the work. Looking back, you only know what the money went for, i.e. if there might be a problem, you know when it happened.
At the family level plan forward. So you plan the future location of the money before you have spent a single penny. This gives you the opportunity to achieve your goals in a more focused, faster way, as well as to avoid serious financial problems later due to overspending.

Budget planning allows for a road to prosperity, and accordingly the financial pyramid of Maslow is built on it.

What do you achieve with a household budget?

The financial framework

Be aware of what your salary or other income goes to. With a family budget, you can set a framework at the household level for how much you can spend. This strikes two birds with one stone:

  • you avoid even accidentally exceeding your own limits and even start a debt spiral
  • you will reach your financial goals much sooner, whatever it is

Planning for larger expenses

Buying a car definitely requires planning, but in many cases, a more valuable technical items also fall into this category. While it may be tempting to use a credit card or merchandise loan, you may suffer a greater financial disadvantage than the purchase will push you forward.

Preparing for non-monthly expenses

You prepare the entire household budget for a full year, and by choosing from the different methods, you break it down to a monthly level. When we talk about expenses that require a larger amount, but are only due every six months, you can also prepare for them in advance so that they do not cause problems there and then. What expenses might be involved in this case? These include:

  • fees for investments with a regular fee but not monthly
  • vehicle-related expenses (technical examination, other repairs due)
  • planned developments on the property

How to make a household budget?

Follow these steps to create your own budget:

Listing your expenditure

Gather your regular expenses. To do this, use your bank account statements, your shopping list, or anything that can help you. The point is to get an authentic picture of everything you spend.

Rate your expenses

During the census, you can make your later work easier by grouping it right away. Create categories such as:

  • housing
  • transport
  • child
  • pet
  • health
  • loans
  • investment
  • etc.

Quantification of revenues

When you work for a fixed salary every month and it’s your only source of income, you can get over it relatively easily at this point. However, if you receive a variable salary (either a performance salary or a mid-year premium) and have other income, take these into account in full. Also pay attention to temporality. Not only its arrive will play an important role in planning, but the arrival time is also important.

Define frame for each category

Divide your earnings between each category. Whatever method you use to use a family budget, you should expect the following when designing the framework:

  • be lifelike, after all, you plan to live that way
  • include not only your existing expenses, but also plan for long-term savings from it
  • if you have not yet built up an emergency reserve, be sure to plan for it as well, an unexpected problem can easily restore the result of your careful work.

Although a few sheets of paper are enough for the design, you can also use this designer to make the calculation easier:

budget planning with excel

Download the planner

Some tips to make it easier to stick to your household budget

Prioritize between categories

By setting the priority, you will get those few goals to more resources so you can achieve them even sooner. Another benefit is that life brings change, so you may easily need to redesign your already completed budget. If you know what the most important parts are for you, you will find a solution to the problem at the expense of something else.

Let everything be automatic

Automate whatever you can. Use a standing order or direct debit. Then the money will leave your account before you forget to pay for the item or simply spend the amount.

Keep track of your expenses

Record and organize all your editions at short intervals. This can be daily, but be sure to do it weekly. This has two advantages

  • you can keep track of which areas you are prone to overspending: this can be a bad habit or even a planning mistake
  • you don’t realize “then once” that you can’t afford of that item

What mistakes can you make with your family budget?

You’re not thorough enough

When you plan, plan everything. If you let control slip out of your hands here and there, you’ll be not far ahead. Think about it, on a daily basis, 5-10 EUR plus expenses can easily come together without actually showing up.
In the morning, have another coffee with your colleagues, at noon you prefer to order lunch from elsewhere, and in the afternoon, eat some hell, if you go to the cinema anyway. If you and your partner spend only 5-10 EUR a day for some entertainment or almost no living expenses, the annual level will exceed a few thousand euros. And an amount like this can affect your life in both positive and negative directions.

With a family budget, you don’t plan for unexpected spending

Without a reserve, you’re going to balance finances in the same way as an artist without any kind of safety net. As wisdom holds: The beautiful thing in life is that anything can happen. And the bad thing is that whatever happens.

The heating will tell you the boring when they say cold, and the kid will also announce that extra money needs to be taken for the trip when the car mechanic tells you that it wasn’t just the oil that had to be changed to keep it from smoking the car.

If you don’t have a reserve for these items, you could easily have to turn everything else, which can be expensive tuition fee for why you have to wait for the unexpected.

You try to keep up with “Smiths”

Your neighbor’s grass is always greener, and one also tends to plan in the way that prefer not to set aside anything for themselves in the long run in order for a car larger than the neighbor’s to stand in front of their house.

Plan the budget only for yourself!

If you want to plan for yourself a higher standard of living than anyone else, you need to start on the revenue side of the family budget. Only by planning your spending in this way will you put an unnecessary burden on your budget.

You don’t stick to your own framework

The family budget will only work if everyone sticks to this agreement. Forgetting about it here and there, only just sometimes paying attention to it, and you don’t get results. This requires discipline from you at first, sometimes a serious replanning, but it pays off in the long run.

What are the methods for making a family budget?

There are several ways to prepare a family budget. Choose the one that suits you best and, more importantly, stick with it.

50/30/20 method

It gives a budget for direction 1-1. 50% of your income goes to needs, 30% to personal wants, and 20% to savings.

Envelope method

Buy envelopes, label them according to the categories of your expenses, and determine how much you want to spend. You can only use the amount you put in that envelope at the beginning of the month for that purpose, but you cannot use more than what you put in it.

Pay yourself first, i.e. backward planning

Define your financial goals, set aside for them first (this is how you pay yourself), what left there, divide it into the necessary places.

Zero based budget

Find a “job” for every penny. Then it will not be idle waiting for you to use it one day or spend it on chips. The point of this method is to use the remaining amount to help with your own financial goals (loan prepayment, investment, etc.) and not leave money at the end of the month that doesn’t work for you.


  1. Which method is most sympathetic to you for planning a family budget?
  2. How would you start to plan your own plans?
  3. How would you bridge the issue of “nothing left for long-term savings”?

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