5 Categories You Didn’t Know Were Missing From Your Family Budget
People with a budget spend less money — it’s true. But budgeting doesn’t mean you won’t have any fun. In fact, I feel like budgeting helps us to have more fun!
As a family of ten living on a single income, we wouldn’t be able to afford international travel or trips to Disneyland if we didn’t carefully budget our money. Budgeting also allows us to pay cash for our vehicles and other large purchases so that we have peace of mind.
In its simplest form a budget is a way to deliberately choose where your money goes. You get to prioritize your spending so that your money works for you rather than the other way around.
You’ll be able to hold yourself accountable for poor spending habits and debt, and you’ll be able to stop wasting money. You’ll finally be able to find a way out of the vicious debt cycle and be able to save money and make progress toward your financial goals!
If you’re a beginner at budgeting and you need more simple, specific advice for creating a budget, try this:
>>> A Beginner’s Guide to Budgeting <<<
A family budget should take all of the expenses of your entire family into account, from necessities like groceries and utilities to fun things like birthday gifts and summer camp. Regardless of where you choose to spend your money, there are a few often forgotten things that every family budget should include.
5 Expenses Every Family Budget Should Allow For
Years ago, back when the hubs and I were both in college, living on less than 10k a year with two kids, our budget had zero allowances. First, we set aside what we needed to buy books (we had scholarships for tuition) each semester, then we paid rent, we bought cheap groceries (meat was a real treat, as were sweets!) and we put gas in the car. That was the end of our money each month.
During those few years, we didn’t buy a stitch of clothing (people gave us hand-me-downs) or a single birthday gift or go to the movies or anything. But we rarely felt deprived because we knew better times were coming. We were pretty happy on our bare bones budget.
During that time, my sister told us about their family budget, which seemed ridiculously extravagant to me. She is pretty frugal but they budgeted $100 a week allowance for her husband, which he usually spent on his hobbies.
He’s not a selfish guy, either. He’s actually a really great guy! He just has different ideas about how money should be spent than my sister, who might be even more frugal than me, if that’s possible.
My sister didn’t give herself an allowance, but she recognized that her husband needed one. She prioritized the happiness of her marriage over her savings goals, which is really smart.
And that’s the beauty of budgets. Whatever your financial situation and priorities, you make your own family budget work for you. Numbers 1, 3 and 4 below are often just included in the discretionary expenses (discretionary expenses are the unnecessary extras you spend money on, like going to the movies or out to eat) category, but I prefer to separate them out into their own categories for the reasons I outline below.
The expenses and allowances outlined below are how we make our family budget work. You’ll have to modify things to work to you. But I hope it helps to read what we do to give you ideas for our own family budget.
1. Peaceful marriage and a happy family should be a priority.
I told you above how I was flabbergasted that my sister and her husband budgeted $100 each week for his hobbies. The reason I was flabbergasted was that we had zero wiggle room in our budget, so hobbies felt altogether extravagant.
Since that time, thankfully, our income has increased and we do have wiggle room. I’m a saver and I’m as frugal as they come, so I wouldn’t have minded keeping our budget pretty sparse and stashing away all the extra pennies.
The hubs, however, likes his treats. He always buys himself candy bars and sodas at the store checkout lanes, he likes to eat at restaurants, go to movies and keep his desk drawers in his office full of all his favorite treats. If I neglect to budget for his spending, he’ll do it anyway, and since I keep track of the budget and pay the bills, that would frustrate me to no end.
So I have to make room in our budget for his treats.
I’m too cheap to spend money on treats (plus I figure it would be healthier for me to tear up my money and flush it down the toilet), but I do like to travel. And I think traveling is a critical part of a good education, so I am sure to include savings for travel in our family budget.
With eight kiddos, travel really adds up. Last year, we took a road trip around the Pacific Northwest and we took the family to China. I spent a whole stinking lot more on travel than the hubs spent on his treats, so I just have to keep that in mind when I feel irritated about the hubs’ spending habits.
Even though travel savings for me and pocket money for the hubs are discretionary expenses, I include them in our family budget as separate and distinct line items. That way, they’re easier for me to keep track of and they don’t accidentally get spent on entertainment.
If you’re in a financial position where you can’t make ends meet, then all family members should sacrifice personal desires for the common good. But if there is wiggle room in your family budget, consider the wants and needs of your spouse and family as you work up your family budget. Everyone will be much happier in the end!
I just want to add, quickly, that we don’t give our children any pocket money at all. No allowance. Nada. We keep a roof over their heads, food in their bellies, and we provide them medical and dental care, schooling (we homeschool) and pay a holy ton for music lessons and sports teams and such. We provide for their needs, and feel that providing for their own wants motivates them to earn.
Our method has been really good for our children, because it encourages them to work for the extras they want. My kids are known in our city for their excellent work ethics, and they are always being offered jobs, which they perform diligently. They are also very entrepreneurially minded, which I attribute to us making them pay for things themselves.
2. Home repairs should be accounted for in your family budget.
Let’s face it. Home repairs are a necessary evil.
Especially when you have children. I don’t know how, because my kids are actually very well behaved, but somehow, they can break anything and everything. And those things will need to be repaired. Probably multiple times, at very high cost.
So you’re just doing yourself a favor by writing the expense of maintenance and repairs into your monthly family budget. We have multiple savings accounts, each earmarked for different expenses, and I actually disperse the hubs’ paycheck into them so that it never goes into our checking account, which is what we use for general expenses.
That keeps me from accidentally spending our home maintenance budget elsewhere.
One percent, annually, is a rule of thumb that can help guide you when budgeting for unexpected home repairs. According to the one percent rule, you should set aside approximately one percent of your home’s value every year for home maintenance. For example, if your home is worth $500,000, you should set aside $5000 annually, or $417 per month.
I’ve found the one percent rule to be pretty accurate for basic maintenance. But it’s wholly insufficient for upgrades and remodels. So if you want to regularly replace flooring or update your home, you’ll have to figure out the cost and save up separately for that.
Keeping your home in good repair will actually save you money in the long run. If you let your shingles go too long, you could end up replacing damaged roof sheathing, attic insulation, electrical wiring and fixtures, ceiling sheetrock or worse. And you still have to replace the shingles.
So you’re saving money in the long run by performing routine maintenance and timely homely repairs.
Now if you’re toilet overflows all over your 25-year-old hideously pink carpet, get down on your knees and thank your Heavenly Father (don’t tell my insurance company I told you this!), because the insurance company will pay for repairs. And they’ll replace all the flooring to the next doorway.
So if your entire main floor is open — no doorways or thresholds — including up the stairs and throughout the upstairs landing — you get all new flooring for the cost of a raise in premiums! I’m not trying to give you ideas, though. Don’t go and plug up your toilet intentionally.
3. Lessons and other extracurricular activities must be allowed for in the family budget.
Just last week, my youngest had a birthday. She’s been telling my for the last four years that all she wants for her birthday, Christmas and pretty much every gift-giving occasion is to be on ‘The Voice’. I finally looked it up for her, and it turns out the minimum age is 13, so she has seven more years to work on her voice.
So she declared that she wants voice lessons instead. She really does have a fantastic voice! If God has given her this gift, don’t I have the responsibility to help her develop it?
And that’s exactly why my children’s music lessons cost me more than most mortgages. When my son approached me wanting to take bagpipe lessons (what a wonderful desire!) I had to buy him bagpipes and find a teacher. That same son also plays piano, cello and guitar.
And when my daughter approached me with a desire to learn the harp (another wonderful desire!), of course I had to buy a harp and find a teacher. She also plays piano, violin, guitar, flute and organ.
With eight kids taking multiple music lessons, plus all their other lessons and activities, it could be a huge hit to our budget if I didn’t plan ahead and include lessons and extracurriculars as separate, unique line items in our family budget.
Think about all the activities your children participate in and how much they’ve cost in the past. Add up the totals and determine how much you need to set aside each month to cover these things. Add it to your family budget as it’s own expenditure.
4. Gifts and holiday expenses should be included in your family budget.
Christmas is the same date every year, and so are birthdays and other gift giving occasions. And yet, how often do they sneak up on you?
Do you end up purchasing things on credit and stressing over payments long after the holiday is over? That sounds like a recipe for how to hate the holidays to me.
In addition to gifts, people usually spend extra money on food, travel, hosting parties, neighbor, teacher and co-worker gifts, decorations, family photos and wrapping.
Christmas can be tough on a family budget, especially when your income is lacking, but with a little bit of advance planning, you can rock the holidays. Easy instructions and tips for how to add holidays to your family budget as an expenditure are explained at the link below.
5. Emergencies and other unexpected expenses are a given, so plan for them in your family budget.
Having kids guarantees you frequent trips to the emergency room, at the very least. But you can also count on broken furniture, electronics, appliances, vehicles and so much more.
Those little bundles of joy will plug the toilet with the contents of your makeup drawer, after they use it to paint the walls and ruin the carpet. They’ll take turns jumping on the bottle of chocolate syrup, laughing as the syrup explodes out of it’s container, covering every square inch of their bedroom. And they’ll jam as many DVD’s as they can fit into the DVD player. Maybe all in one day. Ask me how I know.
One day, I heard this enormous metal “zinging” sound coming from our basement. I ran down there to find my not-very-old water heater spewing water from a crack. My son had been pulling out the vertical copper pipes that ran into it because he enjoyed the sound of them whang-ing back into the water heater. Oops!
My Final Thoughts on a Family Budget That Works
If you’re worried that a family budget will shackle your or prevent you from having any fun, you need to just try one. A family budget is more about freeing you from financial bondage than limiting your spending.
It’s quite literally a map to get you to your desired financial location. Chances are slim that you’ll ever get where you want to go without a plan and a map.
Big financial goals, like purchasing a home or funding your retirement, are especially unlikely to happen without a family budget. If you want to retire with 5 million invested, now is the time to divide that huge goal up into bite-sized chunks and add them to your budget.
You’ll be able to see at a glance whether your goals are possible, or how much more you need to be making in order to make them possible. I actually find budgeting enjoyable for that very reason! I know what to work toward!
Happy budgeting, friends!
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Do you include any unusual categories in your family budget? We’d love to hear about them in the comments below!