A Frugal Guide to Family Budgeting for the New Year

A Frugal Guide to Family Budgeting for the New Year

While healthy living is at the top of most people’s minds as we enter a new year, so is creating a healthy budget for your family’s bank account!

Family budgeting requires planning and making a conscious effort to pull back on our spending. It’s not always fun to be frugal, but by keeping the long-term goals in mind, it will help you get to your financial finish line with success.

A Frugal Guide to Family Budgeting for the New Year
Preparing a proper family budget requires hard work and a commitment to saving for the future.

Whether you are saving for a vacation, continuing education, that special something for that special someone, or just to have the security and padding of stable finances, this guide can help you get there.

1) Start with a Budget on Paper

It seems too simple, but it’s the best first step. Determining how much money is flowing into your home and how much you are spending should never be mere guesswork. Put it down on paper! Figures don’t lie, and when you see those numbers laid out in front of you, it will make the whole process much clearer.

2) Identify Your Fixed Spending

A Frugal Guide to Family Budgeting for the New Year
Yes, those numbers can be scary and large, but it’s important to examine every aspect of your budget so you know where and how to improve in the new year.

Create a list of what your fixed expenses are each month. I don’t mean basics food, clothing, and the occasional entertainment.  For the most part, these items include:

  • Mortgage / Rent
  • Car payment
  • Car insurance
  • Health insurance
  • Utility bills (Since some months are higher than others, take an average of this cost.)
  • Student loan payments
  • Credit card payments
  • Telecommunications bill (This includes your landline, cellular phone, and Internet.)
  • Your children’s extracurricular activities (This is different from entertainment, as these activities are typically related to education or development.)
  • Retirement funds
  • College savings funds

Some of our spending can change, some of it never will. A good rule of thumb is that these fixed items should be roughly 50% of your monthly income.

3) Define the Variable Spending

Once you’ve totaled up your fixed financial commitments each month, then you can take a look at what remains for spending on food, clothing, and entertainment.


A Frugal Guide to Family Budgeting for the New Year
Make grocery shopping a fun family excursion, instead of a stressful chore.

Sure, it’s a necessity, but since the amount of money you spend on food can vary wildly depending upon your needs and schedule (especially if you don’t you include eating out in the “entertainment” category), it falls into the variable column.

And yes, there are still places you can save, if you know where to look. For example, many of us often throw away items from your refrigerator that don’t get eaten in time, or before their expiration date. Make sure you only buy what you’re going to eat, and ensure you don’t waste food.

Then again, if you’re already spending $400 a week on food, then going down to $175 a week in the short term is unlikely. Be realistic, and remember that small changes add up to big savings down the line.

Decide what is a reasonable amount to spend on eating out each week, and stick to it. Other options include “meal planning” – making dishes that allow us to eat it 2-3 times (things like beans, soups, pasta salads and recipes from the slow cooker). This helps my family curtail our spending on eating out since we already have prepared food in the refrigerator.


Children grow quickly, and there’s no denying they need clothes that actually fit them well, especially as the seasons change.  Commit to what you will spend each year on each child, and don’t let the current trends talk you into spending more than you planned. Consider that shoes and jackets are always going to be more costly than pants and shirts, and be sure to take the climate of your region into account.


Life is no fun without a bit of spending for entertainment. Decide what your allowance is on things like sporting events, museum fees, movie tickets (skip the popcorn!), carnivals, and festivals. If your family is restless and needs to have something to do every single weekend, check the local newspaper for free events, and don’t forget your local parks!

5) Commit to Saving

The old idiom tells us to save for a rainy day. And that rainy forecast always comes in the form of a broken refrigerator, a car needing repairs, or an out-of-town vacation you didn’t see coming to watch your close friend get married. Things crop up that are out of our control, and it’s far better to have money set aside than to have to borrow or take out another credit line to do it.

If all you can afford is $75 a month for your rainy day savings account, that’s a good start, since it adds up to be an extra $900 a year. Have it automatically transferred each month from your checking into your savings account, and you won’t miss it.

6) Trimming the Fat

A Frugal Guide to Family Budgeting for the New Year
Preparing a family budget can require difficult choices, but they are necessary ones if you want to live within your means and prepare for the future.

Entertaining, eating out, and shopping for pleasure is where a lot of us go overboard. Too often, our emotions get the best of us, and we escape by spending money on stuff we don’t need. You also need to consider places in your fixed expenses where you can save! For example:

  • Do you really (really?) need that extra pair of shoes?
  • You’ve seen the movie twice. Do you really need to buy that DVD?
  • If you’re used to buying your lunch at work, start by bringing it instead. Not buying lunch for $10 just twice a week can add up to over $1,000 a year saved!
  • Are you paying too much for your cell phone usage? Shop around and see if there are more competitive rates to keep you connected for less money.
  • Is it time to shop for a lower rate for your electricity or natural gas?
  • Are you actively using the gym membership enough to warrant spending $30 a month on it? Would jogging at the local park and purchasing a few affordable hand weights give you more exercise than your current membership is giving you?
  • Do those magazines you subscribe to get read each month or land in the recycling bin?
  • Do you need regular cable, premium cable, AND every single streaming service? Can you really watch all that programming?

Take a good hard look at what you can and cannot live without, and spend a little time to get the best price on things like electricity and phone usage. You can end up saving hundreds by finding better prices or eliminating some of your entertainment subscriptions.

Stay focused, take a deep breathe, and start your family budgeting with little steps. Be realistic about what is flowing into your home and what is flowing out. Remember – every dollar counts! Best of luck.


Born in Australia, Ebony has been in Texas long enough to consider herself a Texan-Aussie. Ebony has been writing for magazines, newspapers, and blogs, for more than 10 years. When she's not writing she's building quilts, growing her own food, or camping with her family somewhere far from the sounds of the city.

Leave a Reply