Creating a budget for a family of six is certainly a necessity to prevent overspending and to allow for proper savings to cover emergencies, vacations, college tuitions, and retirement. Depending on your income abilities and your individual family needs, a budget will have to be developed to accommodate the specifics of your family. However, there are some guidelines to get you started on creating a budget for a family of 6.
Here are some tips to creating a budget for your family of 6 as well as ideas for saving money in each major budget category:
If you are already in your home, you should be familiar with what it takes to pay your mortgage, property taxes, and insurance. Experts recommend these combined expenses are no more than 28%-30% of your gross annual income. Families should also create subcategories for living expenses related to housing such as utilities, maintenance, and heating/cooling costs.
Food for a family of six will likely take the biggest chunk out of your budget. Many experts recommend a budgeting percentage of approximately 15%-20% of your available cash towards the grocery bill. There are many ways family can save on grocery costs including coupons, bulk purchases, and creative recipes. The fastest way to cut down on food costs is to eliminate dining out and eat most all meals at home.
Clothing for a family of six should be budgeted around 10% of a family’s budget. However, most families can save a considerable amount of money on hand-me-downs and used clothing. There are so many more resources available for high quality clothing including online stores and consignment shops where fashionable clothing can be purchased at a cheap price.
Transporting six family members around to various activities and work commitments costs a lot. You’ll need to figure out your families needs specifically, especially if the kids of the family are within legal driving age. Depending on where you live and how you travel, your transportation costs may average out to 10%-20% of your monthly income.
There are some recommendations for savings goals. First, families should adapt the good habit of paying itself first and allocate 10% of the monthly income towards their general savings account. Life insurance and retirement funding typically costs about 8%-10%; medical care/health insurance 6%, and cash contributions 4%.
These are just some guidelines for larger families to use when considering a budget based on their income and personal needs. There are many other categories that can be added to a budget to account for accurate spending and savings.
The only way to truly get a grasp on your family’s spending is to get everyone to track their every penny spent for a period of one month. This expense tracking will help you get a more accurate picture of where you are spending, how much you are spending, and what expenses can be cut out entirely to reach more savings goals.