How to Budget for a Family of Six

Step 1

Add up your monthly bills. For this part of the budget, you simply want to add the bills that are the same or about the same every month. This might include your utilities, phone bill, cable bill, mortgage payments, car notes and other bills that repeat from month to month. Total this up so you can determine the amount of money that will steadily go out each month.

Step 2

Create an average budget for fluctuating costs–such as groceries, clothing, shoes, field trip costs, gasoline for vehicles and any other cost that fluctuates from month to month. Go back at least four months to find your family’s average expenditures. You may want to give yourself an extra amount of money to work with in this part of the budget in case one month’s costs are higher than average.

Step 3

Budget for emergency costs. It’s very important to create a savings account for emergency costs and treat this account like a bill. With a family of six, there may be emergency costs that pop up at inconvenient times and it’s important to be prepared. This might include doctor’s visits, emergency room bills or a cushion in case someone loses a job or gets hours cut one week. You should budget for as much as you can afford–whether it’s 10 percent of your paycheck or 25 percent.

Step 4

Total the costs from Steps 1 through 3. This are the living expenses associated with your family. It’s a great idea to try and reduce these as much as possible. You might cut out cable and opt for video rentals twice a month instead. Or, rather than purchasing school or work lunches, pack your own. Anything you can do to lower your monthly costs is a great idea.

Step 5

Total your incoming money. The next step is to tally up the amount of money coming into the household every month. Be sure to include money from paychecks, child support, alimony, social security or any other amount of money that goes into the household. This is what you have to work with when paying your monthly bills. Ideally, once the monthly bills are paid, you should have about 40 percent of the money left over. This isn’t so for everyone, but if you can shave down your expenses so that this amount of money is left over, you can save for other things that need attention–such as retirement and college.
By using the steps above, you can budget for a family of six and still keep your head above water.