Money-saving and budgeting strategies for families

Getting started with family budgeting

Creating a family budget — and sticking to it — may sound tedious with everchanging costs that come with the varying needs of children and parents.

But family budget planning isn’t all that different from creating a personal budget. In fact, many of the steps are similar, such as:

Step #1: Gather financial information

Collect various financial data, including income sources, household expenses, outstanding debts, and discretionary spending.

Step #2: Identify a budgeting method

Find a family budgeting and tracking method that matches one’s needs. Choose between financial apps, spreadsheets, the 50/30/20 budgeting method, or an envelope system — all of which can help guide in how to budget effectively.

Step #3: Set family financial goals

Envision the ideal family lifestyle in the future, such as going on a vacation or saving up for college. Creating financial goals can help motivate the family to achieve them together.

Finding a budgeting method that works for the entire family is important. While open communication between family members can be essential to family budget planning, different strategies work for different people. Remember, every family’s needs differ — there is no one-size-fits-all approach.

Budgeting for different family sizes

Here are some budgeting considerations for families of different sizes and makeups.

Budgeting with small children

Families with small children may want to prioritize ongoing expenses, including daycare, diapers, baby food, and formula. The earlier childcare budgeting begins, the easier it may be to manage.

A smart way to save money on clothes and toys is to purchase gently used items or accept hand-me-downs from family and friends (since children outgrow them quickly).

Budgeting with teenagers

Having teenagers can mean growing appetites and focusing on food budgeting – and lots of visits to the grocery store. Anticipate increased food costs, extracurricular activities, and potential clothing allowances.

There's also an opportunity to teach teens about money by involving them in the budgeting process. When they see how their parents manage the household budget, they can ask questions and learn about financial responsibility.

Budgeting for small families

Those with small families may emphasize building an emergency fund to cover unexpected events. Typically, it is good practice to save three-to-six months of expenses in a family emergency fund.

Family debt management may become a top priority if sizeable loans need to be paid off. Tackling debt may help relieve the financial burden. Moreover, small families may wish to identify future expenses for their children, such as saving for college. Working toward this goal can help them pay for tuition, textbooks, and daily living expenses when the time comes.

Budgeting for large families

Large families may discover family discounts. One way to maximize savings is to purchase sale items in bulk and store them in the pantry or freezer. Instead of making several trips to the grocery store in a given week, consider creating a grocery list and go on one trip to save time and money.

There may be other discounts for families, such as getting a season pass for a tourist attraction. Plus, sharing the same credit card reward program with family members could be a good way to optimize cash back offers under one household.

Keep in mind that these are general scenarios. Each family is different and will have unique needs, so explore various options to find what fits best.

Ways to potentially save money as a family

Below are some practical ideas to save money as a family on everyday expenses:

• Meal planning and grocery shopping hacks: Save money on groceries by budgeting meals, creating grocery lists, and utilizing coupons and store loyalty programs.
• Affordable family fun: Explore free family activities or low-cost entertainment options. For example, visit parks, libraries, and museums on free admission days. Other budget-friendly family options include family game nights or movie nights at home or outfitting the backyard for group gatherings.
• Review insurance and utility costs: Review insurance plans regularly and shop around for better utility rates to negotiate lower bills.
• Utilize secondhand goods: Buy or sell used clothing, furniture, and toys to save money.

Building a secure financial future

Setting long-term savings goals, such as retirement or a college education, is important. It can provide a clear path to achieving a family's financial needs. Parents and caregivers can start discussing their financial goals with their children and involving them in age-appropriate budgeting activities.

There are a variety of tools that may be useful for families as they grow, from high-yield savings accounts to bill management apps. PayPal may be a helpful tool for budgeting and managing family finances – whether sending and receiving money, earning rewards, or growing money in PayPal Savings.¹

Learn about the various ways to start managing money with PayPal.