Creating a Family Budget

Starting and maintaining a budget early on in our marriage was the best decision for our family. We have diligently gone over our finances at the end of every month since the beginning of our almost 7 years of marriage. We aren’t always perfect at staying under budget and there are always unforeseen expenses that come up. However, it does still help to have a guideline to follow and keep us on track. Every year we tweak our budget to fit the needs of our growing family. Since we’ve been doing it a while, we are getting better at estimating how much our food/grocery, gasoline, utility bills, etc will be each month. It really does hold each of us accountable in our relationship and we rarely argue about how we spend money because this system keeps us on the same page with our finances.

Family Budget Spreadsheet

Below is the budget template we use to track our spendings for the year. At the start of each new year, we sit down and estimate the total of each category based off of the previous year averages. If we add another baby to our family, buy a new home or car, or know of upcoming vacations we may raise our monthly costs to plan for the future. Each category is formulated to sum up all the expenses in columns (for monthly totals) and rows (for the yearly total). Let me break down how we use our budget spreadsheet.

Budget Spreadsheet

Steps to Setting up Your Budget Spreadsheet

• Start by going down the list of each category and estimate how much you think you will spend each month. It will automatically multiply by 12 to give you a yearly total. After you finish each category you can see what your total cost of all spending for the month and year will be approximately.

• Figure out how much money you bring in each month. I’ve included 2 incomes but if you only have 1 household income, you can easily delete the row. Another way we make money is online so we’ve created a row strictly for any “passive” money we accumulate. “Selling” is for our ebay and yard sale items sold and “extra” is for tax returns and any cash we get from birthdays, Christmas or other miscellaneous earnings. We are very rough with our estimates in the last three rows. We mostly just go off what we’ve made previous years for these categories. This is also a way to sit down and make goals for what kind of money we are striving to make in the coming year. Again these are totaled monthly and yearly.

• Compare the total earnings to the total costs month vs year and see if it’s doable. Start with your yearly salary (after tax) and see if you come under that total. You want to make sure you come ahead so some money goes into savings each month. It’s important to always have extra money set aside for your “rainy day” fund. If the difference between your spendings vs earnings doesn’t look right then from there you can make adjustments in the spending categories to get the total number lower.

Calculating Monthly Spendings

• When you sit down at the end of each month to go over all spendings, start with one credit card at a time and go from the first charge of the month. Put each credit card charge in the appropriate category. You can tab over to enter each transaction and can delete these later once you have a total.

• After you’ve entered all of your spending amounts, total them up by selecting the entire row (click the first dollar amount rectangle, hold down the shift key and select the last amount) click the function key above and select sum to find the total for each category. You’ll have to enter in that amount manually under the appropriate month and go back to delete each dollar amount following to clean up the row again.
• Do this for each category to find your total spending cost.
• Add up your total income for the month
• Subtract your total spendings from your total earnings to see how much you can put into savings.
• Make new goals for the next month!

Going through your finances each month may feel too tedious of a task, but we can usually go through it all within an hour. That 1 hour has saved our finances and marriage so I’d say it is well worth the time investment! Below are some other tips that have worked for us to stay on budget and help us with financial goals.

Tips for Sticking to your Financial Goals

Cash Back Credit Cards

• We strictly use credit cards that offer cash back and we always pay off our credit cards each month. We aren’t encouraging credit cards unless you can be sure to pay them off without accumulating interest. They are only worth having if you can do that otherwise you’ll be paying way too much in interest. Since almost everything we purchase goes onto a credit card we get a lot of cash back through the year. It adds up! If you fly frequently it might be worth having a credit card that gives you flight miles too. Shop around and see which credit card makes the most sense then be sure to stay on top of paying it off!

Mad Money

• Allow some “off the chart” cash that you and your spouse can spend that is unaccounted for. We’ve called this “mad money”. You can set any dollar amount that your choose. We’ve found that $50 for each of us a month was a good amount. This can cover anything we’ve had our eye on. My husband usually saves his $50 aside which is the smart thing to do! Whereas I usually spend mine on new clothes, shoes, makeup, home decor etc. It’s nice to have fun money to spend in the form of cash that you don’t have to worry about fitting into the budget. You could also call it “cheat money” 😉

Mint App on your Smartphone

• We recently came across an app that we love and now use all the time. It’s called “Mint.” You sync it to the bank and credit card accounts that you use daily and it keeps an online budget for you to follow. We have inserted the same numbers as our spreadsheet into the app so we can see where we are at with our budget as we go through the month. It’s very user friendly and helpful with sticking to your financial goals. Even though this app does a great job of keeping our budget in check, we still like to go through all spendings and insert into our spreadsheet at the end of each month, that way we can also make sure all of our bills have been paid/accounted for and that there aren’t any charges that shouldn’t be there! We have had that happen in the past. Luckily our credit card company was able to work it out for us.

Hopefully this system and tips I’ve provided will help you and your family achieve your financial goals and even help get you out of debt! This system has worked really well for us, but it doesn’t mean it is perfect for every family. Tweak it according to your family’s needs and come up with a way to budget that makes sense while saving cents!