Household Budget Template: How To Create A Budget That Works

Using a budget in your everyday routine can help you organize your monthly living expenses and meet your financial goals – like paying down debt or building up a savings fund. 

A “household budget” is helpful if you live with other people, whether they be a spouse, family or friends. With a household budget, you can all collectively contribute to paying bills and other expenses.

Let’s dive into the specifics of a household budget template and how to create one that works for all the members of your household.

What Is A Household Budget Template?

A household budget is a type of budget that takes into account the earnings, bill payments and savings goals of every person in a household. Let’s consider, for example, a hypothetical budget for the fictitious “Addams” family. This household has two parents and two children. The household budget, then, would include the total net income of both parents, as well as the financial responsibilities of everyone in the home.

The Addams’ budget might include the mortgage or rent payment, groceries, car payments and cell phone bills. The family might also be budgeting to save money for an emergency fund, a family vacation or future college tuition.

When budgeting, it can be easier to start off with a budget template. A household budget template is any format that you use to organize your household budget. It can take the form of a mobile app, budget spreadsheet or paper planner. A budgeting template outlines your monthly income, bills, expenses and savings goals, and you can adjust it to fit the changing needs of you and your household.

How Is A Household Budget Different From A Personal Budget?

A personal budget allows you to track your spending habits, bills and financial goals. The primary goal of a personal budget is to stay on top of the funds that one person spends and saves. Household budgets, on the other hand, can incorporate the earnings and expenses of more than one person. 

With a household budget, you might be budgeting with your spouse, partner or roommates, or with kids, family members and friends in mind. A household budget can be especially helpful if you’re splitting household costs with someone or you’re financially responsible for one or more other people.

5 Tips For Making An Effective Household Budget 

If you’re thinking about creating a budget for your entire household, check out the tips below.

1. Choose A Household Budgeting Technique

Budgeting is a way to plan out exactly how much money you have to spend and save every month, within the means of your income. With a household budget, you might have more funds to work with or more expenses than your own to cover.

Starting off with a specific budgeting strategy can help you keep your funds organized and ensure you have enough money to cover bills and other costs.

The 50/30/20 Rule

One of the most common budgeting techniques is the 50/30/20 rule, which states that 50% of your monthly income goes toward the necessary expenses in your household, or your “needs.” Your needs may include the mortgage or rent payment, utilities, car and other transportation expenses, insurance payments and money for groceries.

Another 30% of your monthly income would be dedicated to the “wants” in your household. The wants may include takeout orders, shopping, recreational activities, hobbies and other forms of entertainment.

The final 20% of your earnings would then go to savings. Keep in mind that you might be allocating savings funds in more than just your immediate savings account. You may want to set aside money in a child’s savings account or college fund or in a retirement savings account.

Using the 50/30/20 budget method can be a great jumping-off point for creating your household budget. Of course, it’s not a strict policy, and you can customize it to meet the changing needs within your household. What’s important is that all of your monthly bills are covered and your immediate needs are met.

Cash-Based Budgeting

The cash-based budgeting strategy works exactly as it sounds – you use cash to cover most, if not all, of your variable expenses. Similar to the budget envelope system, the cash-based technique brings a tangible element to personal and household budgeting.

Essentially, you’re budgeting for some or all of your variable costs – like groceries, personal and household items, takeout orders and shopping trips – in cash. This can be a helpful way to see and keep track of the funds you’ve allocated to specific areas of your monthly budget.

Zero-Based Budgeting

The zero-based budgeting strategy is about budgeting your money with purpose. This means that every dollar earned within your household is allocated to an area of your budget. Just like the 50/30/20 technique, zero-based budgeting is a way to ensure every dollar is spent or saved until you have zero dollars left to distribute.

This technique doesn’t mean you have zero dollars to spend – it simply means every dollar has a place to go. So, you’ll budget for your fixed and variable costs, and you’ll put money aside for debt payments and savings. Once all your money is accounted for, you should be left with zero dollars.

2. Use A Free Budget Template

Once you’ve decided how you’re allocating the household income, it’s time to find a budget template that can help you stay organized. The Rocket Money℠ mobile app, formerly known as Truebill, allows users to input all of their monthly expenses and set up a manageable budget.

You’re also able to connect the app to your bank or credit union so it has access to your income and spending habits.

The Rocket Money app automatically breaks down your spending into the following categories:

• Bills and utilities
• Groceries
• Dining and drinks
• Auto and transport
• Shopping and more

It even keeps track of the amount you’ve earned that month. After considering your monthly bills, the app shows how much you have left over for spending.

The budgeting feature also shows how much money you’re projected to save, which can be especially helpful if you’re trying to hit a savings goal.

Of course, you can also create a budget worksheet with a spreadsheet on the computer or with a paper and pen. These methods will just require that you fill out your income and expenses manually. You might need to do some calculations to make sure you’re within budget.

3. List All Areas Of Income

For a household budget, you might be considering more than one area of income. For example, a partner, family member or roommate might also play a role in covering household expenses.

Keep in mind that dividing the earnings of two or more people across different bills in a budget doesn’t have to be an even split. If one person has a higher income than another, there’s definitely room for a nuanced discussion about how the funds are allocated.

For instance, two parents in a household where one makes more money than the other might choose to split the costs 60/40 instead of 50/50. 

The total household income might also include areas beyond a traditional salary. Other potential income streams you’ll likely want to add to your household budget include:

• Child support
• Alimony
• Side hustles 
• Investments

4. Add Up Monthly Bills And Expenses

Now that you understand how much money you have to work with, be sure that all of your monthly bills are in the budget template. It’s easiest to start with your fixed expenses, or bills that are the same every month.

Your household’s fixed expenses might include the mortgage or rent payment, the internet and cell phone bill, the car insurance payment and debt repayments. You might also make a monthly payment for a gym membership or streaming service, which you can include in your fixed costs.

Next, you’ll allocate a certain amount of your household income toward variable costs, or costs that can change month over month. Your variable expenses can include groceries, transportation costs and utilities like electric and gas.

You might also want to designate some funds for shopping, eating out and forms of entertainment like going to a concert or a baseball game.

Add up your fixed and variable costs and subtract from your monthly income. You can then allocate the money you have left over to an emergency fund, savings account or various investment opportunities.

5. Consider Your Household Savings Goals 

Household budgeting doesn’t only involve managing your incoming and outgoing funds – it also assists in managing your savings. Building up a household savings account can help you prepare for unexpected circumstances like a job loss, car repairs or a healthcare emergency. A robust household savings can also help set you and your household up for the future.

When creating your budget, consider the overall savings goals of the household. Examples of short- and long-term savings goals include:

• Making a down payment on a new house or vehicle 
• Paying a child’s college tuition
• Taking a family vacation
• Planning for retirement
• Paying off an auto loan, home loan or student loan
• Paying off credit card debt

If you’re budgeting with the Rocket Money app, a feature of the app helps automate your savings. All you have to do is establish your savings goal and the frequency with which you’d like to contribute to your savings.

The app then automatically transfers money from your checking account into your savings, and it projects how much you’ll save within a certain timeframe. This can be incredibly useful if you’re saving for a specific goal like buying a house.

The Bottom Line

Compared to a personal budget, a household budget has a few more components. You might have more sources of income to factor in, and you might have to consider the financial needs of more people. Even with all of the moving parts, you can still streamline your household budget – starting with your choice of a household budgeting template.

If you’re ready to create a personal or household budget that works for you, create an account on the Rocket Money app today.