HOW TO BUDGET FOR A FAMILY OF 4
I feel like I need to preface this by saying…
I am an Excel // Sheets nerd. I seriously LOVE Excel. When I was in college, I was an assistant to the President of Human Resources during the summer. He just so happened to be a former CPA and used Excel for EVERYTHING (including typing letters, which I DO NOT recommend). But, I learned SO much about Excel from him that I ended up becoming obsessed with all of the things it could do.
That being said, this will NOT be a love affair with Excel. I’m not going to teach you Pivot Tables or Conditional Formatting (but I do feel like those are fun things to learn if you have the time to learn them).
What this will be is how we (really, I should say * I * because my husband really doesn’t care what happens, as long as we don’t lose our house) budget as a family of 4.
Look, I am definitely a numbers person, but when it comes to finances, I know NOTHING about it. Sure, I do our taxes, but that’s all thanks to TurboTax - I really don’t understand finances or taxes at all. (And I am thankful that my kiddos will learn that in high school now because I do feel like it’s a life skill a lot of us millennials were NOT taught until much later on in life, most of us thrown into the adult world having to learn it on our own). But, having and keeping a budget does NOT have to be hard. And if you keep up with it consistently and regularly, it doesn’t have to take hours on end.
Here’s how we budget weekly + monthly as a family of 4…
1. Create categories that works for your family
I feel like this is the first step to creating a budget that works for you. And is an easy way for you to divide your income up to know where you can - and can’t - spend money. Plus, you’ll see exactly how much is going to certain areas of your life. Should you need to cut back on expenses for some reason, you’ll be able to see areas where you can pull from easily.
Ours is setup in to 8 categories…
Automobile (gas, car payments, insurance, etc.)
Bills + Utilities (utility bills, any recurring charges or bills, etc.)
Entertainment (eating out, Target or Amazon purchases, etc.)
Groceries (pretty straight forward, but we include our “beer” budget in here as well)
Home (mortgage payment, updates, etc.)
Kids (gymnastics, tuition payments, other activities, etc.)
Tithe (our weekly church offering)
Other (anything that doesn’t fall into the above, such as travel, gifts, donations, etc.)
I also keep my business expenses in ours, but if you don’t have a business, you don’t need to worry about that! I have a completely separate document for that as well, but still have some bills + payments that use our non-business credit card.
You can absolutely take out categories if you need to, or even add them too. When I first started, I separated our Entertainment budget into His + Hers, but it was hard to budget when he would spend like $20 one month and then $100 another. So, I just kept them together (and let’s be honest, that’s mostly my Target budget too…).
2. Figure out your average monthly income
I also keep our income separate so I know who is bringing in what, especially when we have multiple income streams. Plus, sometimes we have extra income from gifts or random things that I like to keep separate from each of our own incomes.
This also allows me to keep track of how much I personally am contributing to the family, especially when I don’t have a set salary. It allows me to know if something is working well or not. Typically, I know if I will have a good month or a bad month, but I like to see it so it keeps me on track with my income goals in my business.
3. Determine your budget for each category
Now that you know how much money you’re bringing in, it’s time to figure out where that money is going. Y’all, this is the IMPORTANT part - especially if you’re really trying to get a handle on your money. Yes, it’s SO much easier to just say, “this is what I’m bringing in, so this is how much I get to spend each month.” But, if you’re not intentional with WHERE you’re spending your money, that’s where you’re going to run into trouble.
Let’s say you make a combined total of $5,000 per month. I always start with my BIGGEST recurring expenses - our house and our car. If your house payment is $1500 per month and your car payment is $300, that means you only have $3200 left in your monthly budget.
How much of that needs to go to your Bills + Utilities? How much of that needs to go to your groceries? How much are you going to set aside for a Tithe or savings? What about the kids? Do you need to set aside some for monthly tuition for school or daycare?
I like this “top down” method because it’s going to help you reign in that Entertainment spending. If you’re really struggling with saving money or overspending, this is definitely going to help you. It doesn’t mean that you’ll NEVER go over your budget, but it’ll help you have a bit more control over it.
4. Track your transactions
I used to do all of this entirely by hand, looking at each of our bank accounts and writing down each transaction, how much it was, and putting it into categories. Y’all, don’t make it hard on yourself! There’s an app for that to keep it super simple!
I use Mint to help us track our transactions all in one place. You can have multiple bank accounts (checking, savings, etc.), PayPal, credit cards, etc. All of the transactions from ALL of these accounts will come to one place in Mint, and then you can easily separate them into categories (and “save” it to the categories so those transactions always get set into the correct category) easily.
Each week, I go through all of our transactions - both incoming and outgoing - and make sure they are all separated into the correct category. Yes, I do this weekly because then it takes me a lot less time - like 3 minutes, compared to 30 if I only do it 1x per month.
5. Keep track weekly
Again, I do this as part of my Sunday night planning routine. I already have everything setup in Mint so all I have to do is go through and make sure all my transactions are in the correct place. Once that’s taken care of, I can see where my money is going each month.
Some months are better than others. Sometimes we get over half way through the month, and we’re not even halfway through our Entertainment budget. Other months, we hit the 15th and I really have to talk to myself about my wants + my needs because we’ve blown through 80% of it already.
Is every month perfect? Absolutely not… but it has been SO helpful with being intentional about how we are spending our money - and has actually allowed us to create savings over the past few years.
OK, so you might be thinking, “But, where does the spreadsheet come into play?” Mint is great for the fact that it keeps things easily categorized, but I still love the spreadsheet for 3 reasons…
>> I can keep our income separate, Mint does not
>> It’s easier for me to compare months
>> I can see where I can reset our budget categories if I need to
Plus (and I preach this A LOT to my clients), if Mint would ever just stop offering their service, I wouldn’t be without my budget and could still see past months. (That’s ALWAYS something to consider when you are using any sort of service you don’t own.)
You can grab our Family Budget Spreadsheet so you can start tracking YOUR budget too!
