3 Types of Family Budgets to Consider

There are plenty of different ways to budget and the method that your family chooses shouldn’t be set in stone.

Getting on a budget is one of the single most important things you can do to make sure your family is reaching financial goals. If you have no idea how to get started here are three types of family budgets to consider.

The Zero Based Budget

The zero based budget is a concept where you “spend” your money at the beginning of each month before even getting paid.

To do this you’ll start by calculating your take home income. Once you have the total you will map out a plan to spend and save all of your money until you’re back to zero.

For instance, first you can plan on paying your bills, next you can take a look at your variable expenses, and lastly you can divvy the remainder over your saving and investing goals.

The Cash Budget

The cash budget was made popular by Dave Ramsey and is very effective for those who are too spend-happy with a debit or credit card.

To use a cash budget you’ll start by creating a zero based budget. Then you’ll create cash envelopes for all your budget categories. Once you’ve spent the amount of cash in one of your envelopes – it’s gone. You won’t get to refill the money until the next month.

Utilizing a cash budget forces you to spend your money responsibly.

The Pay Yourself First Budget

This is my personal favorite budget. At first it requires a lot of discipline but after that you can simply put everything on auto-pilot.

The “pay yourself first” budget is centered on your family goals. At the beginning of each month you’re going to meet your saving and investing goals. After that you’ll pay your bills and cover all other expenses.

With this type of budget you’re guaranteed to hit your financial goals each and every month.

Sit Down with Your Spouse and Decide

There’s no right or wrong way to budget. What works for me might not work for you and vice versa.

Sit down with your spouse and decide on a family budget and then stick to it. If after a few months you find the particular type of budget you chose isn’t working then try something else.

What’s your favorite type of family budget?