If you’re ready to get your family’s money managed once and for all, we’ve got good news—we know exactly where to start.
It’s a simple six-letter word, but it doesn’t always seem simple to put into practice—especially when you’ve got kids. You’re busy, your money’s tight, and money talks are sometimes super awkward.
But you can create a family budget, no matter your time, income or emotional reservations. We’ll show you how in just nine steps.
1. Set up your budget.
You need to pick a budgeting method. Spreadsheet, pencil and paper, app . . . pick a way to log your income, expenses and spending. Every. Single. Month.
Whatever method you pick needs to meet a few requirements. It should be:
- Easy for both spouses to access
- Simple to create new monthly budgets
- Convenient to track spending throughout the month
May we suggest our favorite budgeting tool, EveryDollar? No beating around the budgeting bush. It meets all those requirements—and then some.
Start budgeting with a free trial of Ramsey+ today!
With EveryDollar, you can budget on the app or desktop. That means both spouses can log in to the same budget on their separate phones—checking in on how much is left in budget lines and tracking spending on the go. This creates accountability. And making new monthly budgets takes just a couple minutes.
An EveryDollar budget is a time and communication saver.
2. Have the kids work on commission.
Lots of us got an allowance growing up. But having your kids work for a commission instead of handing them money for nothing teaches them how the world of work runs. They do chores—they get paid. They save their money—they pay for things.
Start kids out on commission-based earning so they learn the value of money, hard work, and how those two things are directly connected.
3. Create money goals together.
The word together is the biggest key in family budgeting. You aren’t on your own. This isn’t just your money. These aren’t just your dreams. Now you’ve got others involved in the outcomes of your incomes.
First, discuss the difference between wants and needs—and be sure to explain to children at an early age that needs must be met first. This means you’re budgeting for housing, utilities, food and transportation before family memberships to the international ventriloquist museum.
Then talk about priorities. You can’t do everything. For example, if the kids want to be involved in extracurriculars, talk about how these things cost money. One thing per kid per season is plenty for their time and for your budget. Create budget lines for each kid’s activities like we did below.
When you talk through these things, you create a foundation to start discussions on larger-scale money goals like paying off debt and saving up for emergencies, big purchases, and family vacations. Get everyone involved in those goals.
4. Track your goal progress.
If you’re using EveryDollar, setting up funds for your money goals is easy—and tracking the progress of all those goals is fun! Check in on these funds together and talk about what you all can do to make them grow bigger. It’s a group effort!
Decide to tighten spending in a couple budget lines, go without some extras for a couple months, or take on side jobs. Even the kids can bake cookies to sell or mow some lawns to help the family goals happen sooner.
Including the kids shows them how finances work, and it confirms that what they do impacts the family in multiple ways. Life lessons all around.
5. Have monthly budget meetings.
Meet to think about everything coming that month and create a budget to get ready for those expenses. Brainstorming together can help you remember and be prepared rather than letting things fall through the budget line cracks.
Plan these meetings at the end of one month to prep for the next. You can start off with what went well and where you struggled with spending the previous month. Check in on your goals. Then talk about what’s next.
Make sure the meetings don’t run too long. You don’t want budgets to appear boring—because they aren’t! And it’s always in your best interest to have snacks. Always.
6. Make paying off debt a priority.
$13.67 trillion. That’s the total household debt in America as of the start of 2019.1 No. Joke.
Debt is constantly knocking on our front doors like a sneaky salesman with false promises of “points” and “miles.” These lies can make us believe that risking our financial stability for these “rewards” is worth it.
Well it’s time to slam the door in debt’s stupid face. No more being a part of that $13.67 trillion statistic.
The best way to get out of debt is to get everyone in the house on board—make paying off debt a priority. Talk it up. Get anti-debt hyped. Make a pumped-up playlist of songs and have a dance party every time you hit a win, big and small.
Speaking of big and small, the best way to get debt out of your house, off your front porch, and far from your life forever is to pay each debt in order from smallest to largest. The smallest is the easiest to take down—meaning early success, meaning quick motivation to keep going! The desktop version of EveryDollar will even order your debts for you, making life a little simpler. That’s always a good thing.
7. Track your spending throughout the month.
We already mentioned how tracking your spending throughout the month creates communication and accountability with your spouse. But guess what. It also makes you accountable to yourself. Yup. Sometimes you’re the exact person who needs to look at that restaurant budget line and see it’s just too low to hit up the Want a Pizza Me? food truck for lunch with your coworkers.
But tracking spending shouldn’t get the reputation of being a killjoy. Yes, it’s being responsible. But people who are responsible with their money are people who take control of their money—instead of the other way around.
If you don’t want your money owning your family and holding you back from your goals, then watch your spending. Track your expenses.
Also, look how easy it is to track transactions with Ramsey+, which upgrades you to the premium version of EveryDollar. You can connect your budget to your bank so transactions stream right in. Grabbed a sweet treat at Donut Hut? Drag and drop the purchase to the right budget line. It’s the best life for busy budgeters.
8. Adjust your budget when needed.
Braces, bowties and budgets. What do these three B-words have in common? They all need adjusting.
Yes, you’re supposed to adjust your budget during the month. As you’re tracking those transactions and a budget line is getting close to maxing out, you have two options. One: Just say no. Two: Move things around.
The first option is always your answer for the extras in life. When your personal spending line is gone, it’s gone. When the restaurant budget line is spent, it’s spent.
But let’s say your electricity bill was higher than projected. You can’t call the electric man to explain your budget line and ask him to take back some of the lights you left on last month. Nope. You pay the bill. And you find that money by adjusting a different budget line.
9. Don’t be afraid to talk about money.
If this all seems awkward at first, that’s normal. Turns out 66% of parents are reluctant to talk to their kids about money.2 But push past the awkwardness and any reluctance. Budgeting together and teaching how to make and spend money wisely—these are two of the best financial foundations you can create for your kids to help them win with money later in life.
Whatever’s holding you back, push past it for the best interest of the family. After all, the family that budgets together . . . well, nothing really rhymes with budget. But you get the idea!
Hey, we’ve said it before, and we’ll say it again. We love budgets. We made EveryDollar because we want you to love budgets too—or at least realize they aren’t hard, or bad, or a ton of work.
Get started with EveryDollar today, as a family. And bring snacks.