Top Tips for Family Budgeting

Personal finance is as much an art as it is a science. While there’s no magic formula to budgeting or borrowing money, a couple of easy-to-remember rules can help you cut costs and get better returns on your money. It all comes down to developing spending habits based on the approach that “less is more.”

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In this blog, we will list 10 important tips for effective family budgeting to help families in the UK save money.

1. Pay Off Your Debts

One of the best things about establishing a family budget is that it can help you avoid taking excessive loans to cover day-to-day expenses. And, if you’re currently in debt, getting rid of it should be a top priority, which can also help improve your credit score for the future. To do so, be ready to sacrifice some non-essential purchases, such as new apparel, and direct this money to pay off your debt.


To pay off your outstanding dues easier, you can follow the debt snowball method. This method advises you to start repaying your loans from smallest to largest. The smallest loans can be ones with the lowest overall cost or those with minimal interest. For example, you may have a £200 loan as well as a loan for £500. In such a case, paying off a smaller loan may be that bit more manageable.

2. Track Your Spendings

Tracking all monthly expenses may be time-consuming, but it lies at the core of an effective family budget. To start, divide your spending into categories, such as food, utilities, home, and transportation. Then, dedicate an approximate amount of money to each category at the beginning of each month and try keeping track of all purchases. An easy way to track your spending is to collect receipts from every purchase and count them at the end of the month.

Similarly, you can print out your monthly bank statements to determine how much you spend and in which categories. It is best to print out at least three months’ worth of statements to help you accurately track and budget your spending.

3. Pinpoint Your Main Expenses

Monthly tracking of expenses can help you identify the areas you spend the most money on. Determine where a large chunk of your money goes and see if you can replace these activities with cheaper options or cut them out completely. For example, you can replace cable television and streaming services with a single multi-channel platform, such as DirecTV. Alternatively, consider working out at home with a personal training app if your gym membership costs too much.

4. Create an Emergency Fund

At the beginning of each month, put aside a fixed amount of money to be used only for emergencies. From medical bills to house repairs, unexpected occurrences can happen anytime. Being prepared for them financially can help you avoid taking away money you’ve put away for something else or going into more debt. Try to dedicate approximately 5% to 10% of your monthly income to an emergency fund. Consider opening a separate savings account at a new bank to avoid being tempted to spend it on other things.

5. Eat Out Less

Going out to restaurants every day is probably not the best way of feeding a family on a budget. Instead, cooking at home can be a fun, bonding experience for the whole family that also saves you a lot of money. You can also save by replacing your children’s pocket money with homemade food.

There are many budget meals for families that you can cook with cheap ingredients from more affordable supermarkets like Aldi and Lidl. Also, buying some products in bulk with coupons can help you save more money.

6. Travel as Cheaply as Possible

Family vacations are undoubtedly important as we all deserve a break from work or studies at least once a year. However, you can still relax and have fun on a budget. For example, a fancy holiday in the south of France can be replaced with a couple-day getaway to the local countryside. You can also find last-minute hot vacation deals on different travel websites. Accommodations and plane tickets are also typically cheaper if you book them way in advance, such as a few months or even a year prior.

7. Use Cash Instead of Credit Cards

Credit or debit cards are not a very good way to maintain a frugal lifestyle due to the high monthly interest. It’s easier to recognise the value of our money if we can see it and touch it. Take out about 75% of your overall family income in cash and leave some funds in your account for fixed costs, such as rent or utilities.

For other purchases, such as grocery shopping, paying in cash can help you avoid overspending and quickly running out of money.

8. Use Coupons for Grocery Shopping

Coupons are yet another innovative way to save and do shopping on a budget. Many people cut out $1 coupons from newspapers or magazines and use them at the checkout line. While you may not notice their impact if you use them singularly, you will notice how much you save if you collect these coupons and use them during large purchases.

9. Use an Online Family Budget Planner

Online budget planners and calculators can make tracking your spending and budgeting much easier. Instead of writing everything down by hand, you can keep track of your spending on your phone and have real-time figures on how much you’ve already spent each month. Additionally, these apps can send you alerts when you are reaching your monthly limit or if you have an upcoming bill.

Budget planner.

There are a variety of free tools you can find on AppStore or Google Play. With a simple budget planner app, you won’t have to worry about collecting receipts or writing down every transaction by hand. Many of these apps link to your bank account and automatically track your transactions. Some effective and easy-to-use apps include Mint, Personal Capital, and BudgetPulse.

10. Teach Your Kids to Entertain Themselves

One thing you will find out throughout time is that children can find hobbies to entertain themselves. It doesn’t always have to be expensive amusement parks or video game consoles. Instead, you can teach your kids to pick up less costly habits, such as reading books or playing outdoors, which will also benefit them both intellectually and physically.

Bottom Line on Family Budgeting

If you have not yet started to budget, it is time to begin. Yes, it can be time-consuming and difficult to stick to at the beginning. But with some discipline and planning, you can change this. By taking such simple steps as cutting back on eating out and paying off high-interest debt, you can organize an effective budget for the whole family and stick to it.

Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
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