How to Start a Budget for a Large Family?

Family Vacation
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If you’re just starting a budget, you need to know two basic things.  One, what is your income?  And, two, what are your expenses?

Starting with income is the fun part, and this is different from everybody but I’ll start with a general approach.  First, you’ll need to know the exact amount you’re netting per month.  Basically, your take home pay (after taxes, social security and health care expenses have been deducted) – that’s your net income.  It’s what you can spend.  Then you’ll need to figure out what you actually spend on per month, your expenses.

If you haven’t checked it out already, we have several resources on budgeting here.  We also have a budget template for download, too.

For me, my net income per month changes drastically because I run businesses that may or may not earn net income consistently.  What I do instead is average it out on a quarterly basis.  You can do this too if you produce inconsistent income like a Realtor, or Subcontractors.  Luckily, my expenses remain fairly consistent month-to-month.  When I started my budget I had two versions, one for the family and the other for the businesses.

My family budget includes my wife’s income in addition to my side hustle income.  So we’re a dual-income household in some months.  For this example, I will show you what goes in a the budget for a family of six.

  • Housing: This is usually the largest monthly expense for most people, it is for us too.
  • Utilities:  Electric bill usually goes here. Trash collection, if you have it can also fit here.
  • Food/Groceries/Dining:  We have this line item broken down in separate categories to keep track of what money went to what. This is one of the largest expenses for a family of six.
  • Shopping:  If we broke this down to the exact actual category, it would be too long and tedious.  This would include, clothing, supplies, house items, etc.  The wife is addicted to shopping at Target and Amazon and anything bought from there usually goes in this large pool of expenses.
  • Cars/Transportation:  We have car payments and insurance that is required for each cars.
  • Fuel:  This is fuel for the cars.
  • Travel:  This is for tolls, parking fees, and speeding tickets.
  • Communication:  Internet service, Cellphone service.  We no longer have Cable/TV service as explained in a previous post, but we would put that in this category if we did.
  • Gymnastics:  We have 3 kids in gymnastics, and that takes up pretty much the lion’s share in the “Leisure” category.
  • Tennis:  We’ve kept the activities to two basic sports, tennis is one of them.  This allows us to minimize the purchasing of equipment required for the different sports the kids play.
  • Entertainment:  Here’s where we keep expenses from Netflix and Hulu.
  • Student Loan:  Lucky for me, I paid off all of my student loans roughly 10 years go.  My wife, still has a few years left on hers but most of that debt came from Law School.
  • Vacation:  We usually put money aside for vacations so we use this category to do that.
  • Miscellaneous:  This is the junk drawer of all categories.  Whenever we pay for something that we can’t figure out where it belongs, it goes here.  It’s lazy, but it’s better than not accounting for the money.

Simple example of what goes in a budget above.  That’s how it should be: simple.  If it’s too complicated, you won’t stick with it because it takes too much work to input everything.  If after you subtract all of your expenses against your net income and you begin to feel poor, take a look at this article for a change of perspective.

Also if you have teens or pre-teens who are just starting to learn about money, we have written an instructional on the 50/20/30 Rule.  

Let us know in the comments if you have a unique approach to budgeting or shout to us on Facebook.



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About Brandon Foster 19 Articles
Brandon Foster writes about stock and options trading for He also writes product reviews for a prominent online publisher. Previously he managed an equity fund and daytraded full-time in Seattle. He currently lives in Portland, Oregon, and spends his free time thinking of new ventures to start.