Question What does a family’s spending plan look like?
Answer Family spending/expenses take priority over individual spending/expenses.
Complete Answer A family spending plan is similar to a spending plan for a single person – simply combine net incomes to get Family Net Income.
|Family Net Income||100%|
|Pay Your Family First (Savings)||10%|
|Health & Medical, Giving, Retirement, Debt Paydown, et cetera||20%|
However, because each member of a family is financially responsible for the financial well-being of the entire family, family spending/expenses take priority over individual spending/expenses. In the above example, the first four categories, Savings, Housing, Transportation, Health & Medical et al, would be considered family expenses and take priority over Lifestyle spending/expenses.
Because we all have different values, interests and priorities, in my family’s spending plan, Lifestyle spending is divided in half; 12.5% for my wife and 12.5% for me. Your family’s Spending Plan will be unique to your family. The above Plan is only provided as a guide. Additionally, your family’s income and expenses vary from month to month. You both get to decide what categories are included and how much is spent for each in your Plan.
Financial Literacy Knowledge/Skill
Develop a Family Spending Plan unique for your family.
Comments or Questions
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Next week’s topic: Should you teach your child(ren) about money?