The family budget can quite easily drift off course over a month. One week it’s the usual food shop and nursery bill, the next, someone needs new shoes and the car starts making an expensive-sounding noise. A useful budget needs to cope with real family life, including the bits you didn’t plan. Here are a few family budgeting tips to get you started.
Find out where the money really goes
Start with evidence, not an idealised version of a normal month. Take two or three recent bank statements and go through what came in and what went out.
Put your regular income alongside unavoidable costs such as rent or mortgage payments, council tax, food, travel and childcare. Then add everything else you spend money on, whether that’s swimming lessons, takeaways or Saturday trips into town.
Children also have a habit of generating costs that don’t fit neatly into monthly boxes. School shoes and holiday clubs are easy to overlook because you don’t buy them every week. If you spent £600 on these sorts of expenses last year, allowing £50 a month for them now gives you a far more useful picture of what your family can afford.
Give old bills a fresh look
A payment leaving your account every month can become almost invisible. But that doesn’t mean it still makes sense.
Energy is an obvious place to look right now. Check what you’re paying, how much energy you generally use and whether your current tariff still suits your household before weighing up other deals.
Do the same with insurance when renewal dates approach. A family with several cars, for example, could compare separate policies and consider switching to multi-car insurance. Look beyond the headline premium: excesses, the level of cover and optional extras can turn an apparently cheaper deal into poor value for your particular household.
Don’t assume your childcare bill is fixed
If you have young children, the figure on your latest nursery invoice isn’t necessarily the figure you need to plan around indefinitely.
Check what government childcare support your family can currently claim. In England, eligible working parents can receive 30 hours of funded childcare each week for 38 weeks of the year, starting from the term after their child turns nine months old and continuing until school age.
There may still be extras to pay, and 38 weeks doesn’t cover a full working year. Ask your childcare provider what your bill would look like after funded hours and any additional charges, then use that figure in your calculations. That avoids setting aside money for costs you won’t actually face.
Pay your future household too
Saving tends to get whatever survives until the end of the month. In a busy household, that can mean it gets nothing at all.
Instead, decide what you’re saving for and choose a monthly amount that leaves enough for your realistic living costs. An emergency pot could cover the washing machine that gives up on a Tuesday morning or a car repair you need before Monday’s school run.
You don’t need a dramatic starting figure. Moving £40 into savings just after payday adds up to £480 over a year. More importantly, it gives that money somewhere to go before everyday spending gradually finds another use for it.
