Tips for setting up the family budget

Six tips for setting up the family budget

Here are tips to help you get started on making your family budget. 

Family budget
Budget/ iStock

According to the Very Well Family website, there are two types of family budgets: the envelope budget and the 50/30/20 budget method. 

As the name says, the Envelope Budget allows you to put money in an envelope and you get to see where the physical money goes towards paying or buying.

Then the 50/30/20 budget method allows you to put 50% of your income for needs and essential bills like insurance and bond/rent, then 30% goes into wants (fun or luxury spending), and 20% into savings or debt.

Setting up the family budget is important because it ensures that you can correctly allocate your finances and save up for rainy days. 

It also allows you to keep track of how much money comes in and how much money goes out. 

Budgeting also allows you to have an honest evaluation of your finances, look at ways in which you can pay off debts, and even save. 

READ: Top tips for making your house feel expensive on a budget

How to draw up a basic household budget - how to budget for all expenses

Determine your monthly income

Write down your income. If you receive any other money besides your salary, also include it. 

Write down your expenses

Whether it is rent/bond, policies, children's school fees, etc., include all your expenses and write them in a separate column from your income. 

Put aside money for savings

Ideally, at least 20% of family income must go into a savings account. 

Be honest with your children 

Teach your children that you can only do things that your family budget allows. 

Allow them to also tell you what they would like you to buy for them, and work around a plan as a family as to how you can attain that whether it be through giving them their own pocket money or making them work so they earn an allowance. 

Budget for family fun activities

Allocate money for things like takeaways and family outings. Failure to do so might see you go beyond your budget. 

Open a savings for your children

A part of your money has to go towards savings. 

Find an easy-to-follow online budget calculator here.

READ: Back To School lunch is on us! Budget-friendly and easy to make

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