Creating a Family Budget

As adults we learn all about budgeting and spending, often the hard way. Sometimes the process begins with marriage, when suddenly your financial decisions and spending become about what the two of you want, rather than what you alone want. The biggest gift we can give our children is teaching them about money when they’re young and before they are in a position to make costly mistakes. The easiest way to start? A family budget.

Get everyone involved

While you may have already established a household budget as a couple, for food, car and house related expenses, perhaps even including vacation or long-term wish list items, expanding that budget to include the kids, and having them be part of the process, will not only give them insight into what’s involved, but will also give you insight into their priorities.

Set guidelines

Before your family can start to create a budget, everyone needs to be on the same page as to how detailed that budget will be. Will you track every bit of spending and every bit of income or will each person have their own slush fund to give them free spending up to a certain amount monthly and that perhaps is funded by allowance or extra chore money. In order for everyone to come to agreement on what a family budget looks like, this basic understanding must be set.

Get it all down

Whether you start with lists everyone comes up with on their own, or work through it together as a family, you need to put down on paper what the expected income is for every month and what fixed expenses such as a mortgage, car payments and utilities are. Obviously you won’t forget food in your essentials listing but don’t forget to build in a category for fun foods. This is where you can talk about things like take-out nights and those regular requests for chips or sweets or things they saw a commercial for and are desperate to try.

Look beyond the basics

Once you have those everyday essentials down, don’t forget about all the extras that come up each month. Depending on your family and their interests, these may include fees for hockey or dance, or perhaps the many, many friend birthday parties your kids seem to get invited to. You should budget a little for just in case car or home repairs, or have a slush fund that you can build gradually that will be used for such purposes. Don’t forget family fun nights, extra gas to go visit grandma, or whatever other little extras your family tends to get involved with on a regular basis.

Make choices

Once you have the basics – income, required spending and wish list spending – have the kids be part of making decisions. Teaching them now that they can’t necessarily have everything they want when they want it is a life lesson you can’t put a price on. Besides teaching them the value of money, they will also have a better understanding of what things cost. This is also the stage where you’ll find out what is really important to them – what they feel they can pass on and what they can’t live without.

Budgeting can be a chore but it can also be a valuable learning experience and a tool that sets kids on the right path to financial success early on.


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