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Managing money as a family can feel overwhelming. Between housing, child care, groceries and debt payments, it’s easy to lose track of where your paycheck goes. A family budget helps you see the full picture — how much money is coming in, how much is going out and how to plan for the future.
What is a family budget?
A family budget is a plan for how your household will manage money over a set period of time, such as a month or year. It tracks how much money comes in and how much goes out.
For example, you might decide to spend a certain amount or a percentage of your monthly income on things like housing, utilities, child care and groceries. You can also set goals for saving, investing and paying off debt.
» MORE: Why is budgeting important?
How to make a family budget
Step 1: Calculate your family’s take-home pay
Start by getting clear on how much money your household is bringing in each month.
Review your most recent pay stubs. There, you will find your net pay, or the amount deposited into your bank account after any taxes, insurance and retirement contributions are taken out. This is also called your “take-home pay.”
For a family with two working, contributing adults, simply add the net pay from both pay stubs to get your monthly income. If one person’s net pay is $4,000 a month and the other’s is $3,000, the household’s monthly take-home pay is $7,000. That’s the number you’ll use to build your budget.
💡Quick tip: As you review your pay stubs, look at how much you’re contributing to retirement accounts, such as a 401(k). You might realize you have room to increase your contributions.
Step 2: Find out how much your family actually spends
Now it’s time to open up your banking apps, pull up your monthly statements and take a full account of your family’s spending.
Start by writing down how much you have in savings, including personal and joint accounts. Then list your debts, including each loan’s total balance, monthly payment and interest rate. Review your monthly bills, such as housing, utilities and insurance premiums.
Next, estimate your other spending, which will probably fall into two major categories: fixed and variable expenses. Fixed expenses are bills that usually stay the same each month, such as your housing, child care and car payment. Variable expenses change from month to month — think of things like gas, groceries and entertainment. As you take note of your expenses, separate your needs from wants.
Tracking your expenses can feel overwhelming and can even be a wake-up call to unnecessary spending. Take a break if you need to, but don’t shy away from getting the real picture of your household’s finances.
💡 Quick tip: Use this time to identify ways to save room in your budget. Maybe you didn’t realize just how much interest you were paying on a loan, so you schedule a time to call and negotiate. Or you’re still paying for a subscription you don’t use anymore and call to cancel. You may notice you're spending twice as much as you thought on groceries, so you plan ways to cut costs, like using coupons, or shopping at discount grocery stores.
Step 3: Make a spending plan
Now that you have your household take-home pay and a detailed list of expenses, it’s time to make a spending plan that also includes your family’s financial goals.
One popular option is the 50/30/20 budget. It splits your income three ways:
- 50% of your income goes toward needs, such as groceries, housing, basic utilities, transportation, insurance, child care and minimum loan payments.
- 30% goes toward wants, such as travel, gifts and meals out.
- 20% goes toward savings, for an emergency fund or for retirement, and debt paydown beyond minimums.
Use the 50/30/20 budget calculator to learn how your family’s income would be divided into these categories.
But the 50/30/20 method is just one way to plan for your money, and may be tough to achieve if you’re just learning how to budget, live in a high-cost area, or have high monthly student loan or child care payments.
💡 Quick tip: There’s no one “right” way to budget. Some methods require you to track every dollar, while others are more flexible. Some focus on paying off debt, while others prioritize saving. Choosing a style that fits your family’s goals and habits can make it easier to stick with your budget long term.
Step 4: Incorporate tools like a worksheet or app
A budgeting tool can make sticking to a family budget easier. NerdWallet's free budget template prompts you to enter every household expense, then shows how your spending aligns with the 50/30/20 breakdown.
Microsoft 365, Google Drive and other websites also offer free budget spreadsheets that you can share within your household.
Some budget apps, such as Monarch, let you and your partner see each other’s spending and saving information. Other apps, such as Goodbudget and YNAB, can also work for family finance goals.
» NEXT: Best budget apps of 2026
Step 5: Keep budgeting and keep talking
Your family budget doesn’t have to be perfect. You’ll likely adjust over time, especially if you have kids or dependents whose expenses change.
What matters most is checking in regularly — every three months might be a good starting point. Look at how your spending has changed, decide what to adjust and plan for upcoming costs. For example, you might set up a sinking fund for an upcoming family vacation or cut back in one area to pay down a debt faster.
Continue to communicate your individual and family goals. When you’re on the same page about the life you want to build, that becomes motivation to stick to your plan.
💡 Quick tip: Set aside time on the calendar when you and the other adults in your household can start your budget. Scheduling holds each family member accountable and helps ensure everyone is feeling up to the task.
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