Typical Family Budget Categories
This is to be expected because there are more people and more needs to meet when you are caring for and raising a family. Kids cost money, and your budget needs to reflect that fact.
By the time we started actually budgeting, we already had 2 children. So creating a family budget, with all the necessary categories, is the only way I have ever budgeted.
With now several years behind me in creating and working our family budget, I have been able to come up with a good working list of some typical family budget categories.
This list is very detailed. Not all of the categories and expenses will apply to you. But I have created this list with the hope that it will help you as you work to create your own family budget.
Parts of a Family Budget
As in a budget for a single person, or a couple, the main parts of a family budget are generally the same. The biggest difference is that you will have more expenses within each part, to account for the extra family members you have.
The parts of a family budget include:
- Expenses (Fixed and Variable)
See? Same parts of a budget as any other. Now we just need to fill in the details of the expenses under each part.
Household Budget Categories List
Get ready for a big list of household budget categories. Again, the point is not to overwhelm you, but to help you come up with your own list as you make your own budget.
Income. The amount of money that actually comes into your bank account is always the to first item in a family budget. When figuring out your monthly income, remember ALL income sources. Such as:
- Salary/Hourly Pay
- Part time jobs
- Side hustles
- Child Support
- Credit Card Rewards
- Investment Income
- Interest Income
Housing. The expenses associated with housing will take a big chunk of your income/be a large part of your budget. When planning for housing, don’t forget:
- Property Taxes
- HOA Fees
- Home Repairs/Home Improvement
- Home Warranty
- Security System
- Lawn care
- Homeowners/Renters Insurance
Food. Another big part of your family budget will be food. Kids eat a lot!
- Eating Out/Restaurants
- Extra Snacks/Treats on the go
- Take Out
- Meal Planning Programs
Utilities. Utilities are an important part of your budget. I like to keep them separate from the housing section so that they are easier to track. This way you can explore if there ar ways to lower how much you are paying in utilities each month.
- Natural Gas or Propane
Transportation. You have to have a means of transportation, and so it has to be included in the budget. And in this case we are talking about all aspects of transportation.
- Oil Changes
- Car Insurance
- Car Payment (could also go in Debt payments)
- DMV Fees and Registration
- Tires (replacing tires and changing tires seasonally)
- Parking Fees
- Public Transportation fees/passes
Retirement. Planning for your future now will give you peace of mind. When we were paying off debt, we paid very little into retirement (much to my husband’s dismay). Now it is almost like we are making up for lost time. We are throwing everything we can into retirement.
- 401k or 403b
- Roth IRA
- Traditional Retirement Account
- Extra Mutual Funds
- Other retirement/investment accounts
- Financial Advisor Fees
College Saving. Once your family starts growing, you may realize the need to start saving for college. After all, the more you can do to help your kids from taking our student loans, the better off they will be.
- ESA (Education Savings Accounts) or Education IRA
- 529 Account
- UTMA or UTGA Account (Uniform Transfer/Gift to Minors Act)
To learn more about these college saving options, check out this article by Dave Ramsey.
Medical Expenses. Going to the doctor is pretty much unavoidable—especially if you have kids. They always need wellness visits, vaccinations, sports physicals, trips to the ER…. Plan for medical expenses in your budget
- Medical Insurance
- Dental Care
- Specialists visits and copays
- Doctors Visits
Insurance. Life happens. We don’t live in a bubble. Having insurance will help save you from extra stress in the future, should something happen.
- Car Insurance (also listed in the transportation section. Don’t double count it)
- Medical Insurance (don’t double count it if you put this in medical)
- Disability Insurance
- Life Insurance (If you have a family, include life insurance in your budget!)
- Home Owners Insurance (could also be in housing)
- Personal Property
- Flood Insurance (usually an add on to home owners)
Debt. Ugh, the dreaded D-word. I like to give this bugger its own separate category so that I can delete it when it is gone! But no matter how you spin it, debt payments have to be accounted for in your budget!
- Car Loan (could be counted in Transportation)
- Credit Cards
- Personal Loan
- Student Loans
- Consumer Debt Payments
Savings. Yay! The fun family budget category! When you can get rid of the debt category, you can start adding more savings goals to your budget. You might consider things like:
- Starter Emergency Fund
- Full 3-6 months of expenses emergency fund
- Upgrading your car
- Upgrading your furniture
- Home Renovations
- Any Sinking Funds you have
- Anything else you can dream up!
Giving. We are big believers that being willing to give to others helps keep you grateful for what you have. Even when we were paying off the dental school loans, we still gave a tithe to our church.
- Foundations you support.
- Random Acts of Kindness
Pets. We do not have any pets (yet), but we hope to one day. I know they can be expensive, so it is important to plan for the costs associated with having pets.
- Pet Insurance
- Vet visits
- Obedience lessons
- Boarding Costs
Household. There are things you need in your home in order for it to function. Don’t forget things like:
- Cleaning supplies
- Personal hygiene
- Toilet Paper….(2020 anyone???)
Entertainment. Having fun is an important part of life. But so is accounting for it in your budget!
- Memberships to museums, zoos, etc
Clothing. We all need clothes. Things wear out. Events come up. We just feel like we need a new shirt…
- Work Clothes
- Seasonal Clothes
Personal Care. In our budget, this category is pretty small. I don’t expect it to be that way forever, but for now we keep these expenses to a minimum.
- Gym Memberships
- Haircuts and color
- Extra Toiletries
Kids Activities. Now we get to more of the expenses that families have–anything related to the kids. If your kids are busy, make sure you plan for their activities in your budget. You might have items like:
- Music Lessons
- Sports Fees
- Pre School
- Swim Lessons
Kids Clothing. Yep! Kids clothing gets its own category. Why? Because children are always growing and ALWAYS need something related to clothing!
- Church Clothes
- Everyday Clothing
- School Uniforms
Baby Items. Are you expecting or have a baby? It is amazing how much such a little person needs (and costs). Don’t forget baby expenses like:
- Baby Food
Other budget categories. These are categories that didn’t fit with the others, but are nevertheless important.
- Miscellaneous (the catch all when you don’t know where an expense should go)
- Personal Spending (SOOO important to help you stick to a budget..give yourself permission to spend this small amount.
- Amazon Prime (could go in subscriptions for entertainment, but…)
- Anything Else not covered in this giant list…
How Many Family Budget Categories Do you need… really?
Okay, I realize the list I just gave you is massive. But remember that not all of the categories I listed will apply to your family and situation.
Pick out the ones that DO apply to you and work from there. The point here is to create an awesome budget that works for your situation and your family. Every family is different, and so your budget will be different from your neighbor’s or your sister’s. That is OKAY.
You need as many budget categories as meets the needs of your own budget for your family. Create a budget that includes ALL of your expenses so that you know where your money is going each and every month.
How much to spend in each category for a family budget?
Now that you have your income and expenses set for your budget, it is time to assign a dollar amount.
If you have never done this before, it will take some trial and error. And you won’t get it right the first time. That is okay! To get started, look at your bank statements and credit card statements for at least the last month to find out what you have spent in each category previously. This will give you a number to work from.
Then, as you set your new budget, track your expenses and you will see if you need to increase or decrease any given amount for a category.
Again, this will take trial and error but eventually you will have a budget that represents your family’s financial situation and goals!
Final Thoughts on Family Budget Categories
Creating a budget that works for your family is critical to helping your family’s financial situation. Please do not be scared to take the leap and jump in.
I hope this big list of budget categories for a family budget has helped you see some things you need to add to your budget to make it more complete. I really don’t want to scare you off.
You got this! Once you get the hang of budgeting, it DOES get easier. Let me know if I can help at all!
P.S. Are there any categories you saw that I forgot? Let me know!