A Sample Budget for Family of Four

Sample Budget Family of Four

Creating a family budget is not always the easiest thing in the world to do, however if you are going to get out of debt or save for your first home it is necessary.  If you are anything like our family was your expenditures might severely outpace your income and if so, the first thing you must do is stop the bleeding!

This was the area I struggled with the most and the best way I found to do this was to follow a family budget. If you do not know where the money is, going it is hard to set up any real savings or debt reduction plan.

Evaluate Your Spending Habits

Step one in creating a budget is logging everything you spend. For at least two weeks make a physical note of where every dime is going, whether it is for the energy bill or a candy bar, write it down. It was amazing to me how much money was being spent frivolously. Next, you need to write down any other bills you must pay on a regular basis including insurance, rent, mortgage, car payment and utilities. Now that you know, what you are spending and where you will want to compare it to what you should be spending in each area based on your income.

The actual cost of things and what you purchase will vary depending on where you life and your family make up. For the sake of argument, let’s say you are creating a budget for a family of four, which includes mom, dad and two kids. The following is the percentage of your income you should be spending on each vital area.

  • Housing- 24-30%
  • Utilities- 10% (lights, gas, water, trash pick-up and sewer)
  • Groceries- 12-20%
  • Car Expenses- 15% (includes car payment, fuel and repairs)
  • Medical- 5-6%
  • Clothing 4-8%
  • Debt- 10-12% (personal loans, old debt, credit cards)
  • Entertainment- 5%
  • Savings- up to 10% (as much as possible, but a little is better than none)
  • Charity- 2-10% (this is a personal decision)

Now that you see the recommended allowance per category, how does your spending stack up? If you are seriously over in one area or the other, it may be time to rethink your expenditures. No one likes to think about downsizing, but if you want a real workable family budget, you may have no choice. Of course, these are simple guidelines and there are situations where your numbers have to be vastly higher than the recommendation. For example if you are battling an illness your medical could be a lot higher than 5%.

Trim the Fat

When you sit down to create your budget with the above break down in mind and you find you are spending 30% on clothing, it’s time to make some adjustments. I found it easiest to start with, what you might call extras; entertainment, clothing and charity are the first places we looked to make adjustments. Once you have pared down these expenditures, you can look at ways to lower your other bills. Perhaps you could use more coupons for grocery shopping, turn the thermostat up or down depending on the time of year or renegotiate your credit card interest rates.


There are many ways to trim your spending but you need a family budget in place first! Not only did our budget for a family of four show us where we were losing money it also helped keep us focused on the big picture. When you know you should be saving at least 10% of your income you can resist the temptation to purchase a new outfit, boat or gaming system.

More Help

There are a few products that I recommend that will help you form a budget and stick to it.  There’s nothing that brings more clarity to your finances that being able to see the big picture in one place and to be able to see what’s going on in each category of your budget.  Mvelopes is one of them.  It’ll help you set up your budget and give you easy control over it.

Also take a look at our free sample family budget template.  It’s gives you a place to lay out all your income and expenses to be able to see where your money is going.

Other excellent tools include You Need a Budget (YNAB), and Quicken Online (totally free) or Mint.com (another free tool).  Also check out my review of Quicken Online.


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