Family Living Expenses to Include in Your Budget

According to Forbes, 65% of Americans (77% of Republicans and 52% of Democrats) conclude that inflation is a major problem. As a result, most of them long for the good old days when a single earner could comfortably take care of a family in middle-class suburban neighborhoods. But it’s not all gloom and doom; understanding your expenses will allow you to budget better. This article has made things easy by breaking your family living expenses into three categories, including fixed and variable monthly expenses and saving and sinking funds expenses. Keep reading to understand why you should include these expenses in your budget.


1. Fixed Monthly Expenses


Generally, fixed monthly expenses are the bills that don’t change. You know exactly how much you must pay for specific monthly bills. Budgeting for expected bills is straightforward, for they never fluctuate.


Rent, Homeowners/Renters Insurance & HOA Dues

The percentage of your monthly income that you must use to pay for rent depends on many factors. However, according to CNN, about 30% of your monthly payment should cater to your housing needs. It would be best if you made it a golden rule to never spend above 30% of your earnings on rent. The lesser the figure, the better to reach a healthy balance of comfort and affordability.


If you have a mortgage, you must pay homeowners/renters insurance. Typically, the figure will get lumped up in your mortgage dues. When renting, you will have this as an agreed monthly fee.


Some neighborhoods need you to pay a homeowners association stipend, typically every month. However, sometimes, the payments must be honored annually. In such a situation, including the figure in your sinking fund category will be prudent.




Insurances are part of your essential family living expenses that protect you and your family from the covered risks. As a result, you must include your monthly insurance payments in your budget.


Most times, you’re required to pay for insurance personally. However, some are paid by your employer and deducted directly from your payslip. Failure to include insurance in your family expenses budget list puts you at the risk of skipping an insurance premium payment, leading to serious repercussions. Examples of common insurances are life, health, long-term disability, short-term disability, and supplemental (like Afflac).


Did you know your contract is null and void if you have unpaid premiums? In such a case, your insurance isn’t mandated to rewrite your policy. As a result, you’ll have no coverage, and the lapse forces you to have a higher rate and hence be labeled as ‘high risk.’


Auto insurance coverage premium makes the list of your must-pay budget items. Typically, the premiums are payable monthly or twice a year. If you pay monthly, depending on your insurance company, you may be eligible for a discount. However, if your premiums are payable twice yearly, consider adding the expense to your sinking fund list to avoid defaulting. If you skip premium payments, your insurance company won’t be liable to pay for your auto repair in case of an accident.


Cable, Internet, Phone Bills & Subscription Payments

To keep your family comfortable, you must budget for utility bills and subscription services such as internet or cable television. Some bills, like phone bills, are necessary for any family setup to ease communication. As mentioned, inflation has pushed the prices of goods and services high. Since some expenses are necessary to keep your family comfortable, you must find ways to keep them low. For instance, if you have a cable bill, consider ways to downsize it. For instance, you can save significantly by switching to streaming services such as Netflix or Hulu.


Did you know your internet can save or make you money? In this case, your internet bill becomes your investment. According to Forbes, by 2025, about 32.6 million Americans will be working remotely – that’s huge! For this reason, the internet is a necessity in your home. Also, streaming services instead of cable will help keep money in your pocket.


Although most people forget to budget for subscription services, they take a big chunk of your budget. Double-check your bank statements for subscriptions. You may be surprised how expenses such as gym subscriptions, pet boxes, beauty boxes, razors, and kids boxes add up to a huge bill.


2. Variable Monthly Expenses


When budgeting for variable monthly expenses, you must be extra careful as figures change often. For example, water and electricity bill figures change depending on monthly usage. If not managed properly, you might be underbudgeting for bills that may have increased significantly.


Groceries and Clothing

According to the US Department of Agriculture, in 2022 alone, American consumers spent 11.3% of their disposable personal earnings on food. The percentage comprises 5.62% of food at home and 5.64% away from home. The statistics indicate that food takes a significant portion of your earnings. For this reason, when considering the family living expenses to put in your budget, always mark food as a heavy candidate.


As a rule of thumb, groceries must not exceed 10- 11% of your earnings. However, you must consider your family size, preferences, and diet restrictions. If your spending culture on food needs control, one of the easiest measures is to create a daily meal plan and grocery list. When at the store, stick to your list and avoid any budget-breaking surprises.


Typically, clothing is an important monthly expense. However, according to the Washington Post, your clothes purchase spending shouldn’t exceed 8% of your income to keep your expenditure manageable. Remember that clothing is a basic need. Therefore, with a pressing need, breaking your budget walls and digging your pockets a little deeper isn’t a transgression. Your family always comes first.


Utility Bills


According to Forbes, Americans spend about $429.33 monthly on utilities. That’s nearly $5,151.96 annually, translating to about 10% of Americans income. While working on a tight budget, proper budgeting equals saving money, and in an economy suffering the wrath of inflation, any penny saved is a huge gain. For this reason, keeping your utilities below 10% of your income is a bonus.


To reduce the budget on your electricity bills, aim to cut energy consumption. Makes sense? To do this, you must start using energy-efficient light bulbs in your home. Also, encourage your family to turn off lights and electricity appliances when not in use. Old-model appliances like HVAC tend to be less efficient and consume more energy. You must go for a new HVAC installation to save energy.


According to the Department of Energy, water heating boasts 18% of your home’s energy usage. To reduce this consumption, use an energy-efficient water heater. Your budget for utilities will decrease drastically.


Did you know that according to the United States Environmental Protection Agency, household water leaks account for more than 10,000 gallons of water wasted annually? That’s your money going down the drain! To save it, ensure your water plumbing is in good condition.


Personal Spending, Personal Care, Entertainment, Sports and Recreation

Budgeting the right amount to cater to family entertainment is confusing. However, according to CNBC, experts suggest the figure must be 10% of your monthly net income or after what’s left after taxes and other deductions. So that figure should cater for entertainment bills such as hanging out in the movies or having a good time in restaurants or bars.


Although not many consider this a direct family living expense to capture in your budget, the under 10% figure must also cater to your personal and spouse’s care expenses. The costs that fall under this category include the occasional massage, a visit to a cosmetic dentist, a road trip, or a boutique fitness class. Personal care is necessary to cater to your physical and mental well-being. For this reason, never skip it while creating a family living expense budget.


As a parent, by now, you must have discovered just how kids’ sports and recreating activities are a pricey affair. The equipment cost can stretch your budget from baseball bats, skates, golf clubs, and basketball shoes to high-end uniforms. Even so, consider buying used equipment, passing down the gear, asking for discounts, or carpooling with parents to save a few bucks.


Savings & Sinking Funds Expenses


Do you have a large purchase you’re saving for? Or perhaps you’re saving for a vacation in Phuket, Thailand. Your reasons for saving are typically known as savings and sinking funds. Sinking funds helps you save money for significant purchases to be made in the future. Breaking down your expected cost into manageable monthly savings is a smart way to budget for significant family living expenses expected in the future.


Savings, Retirement, College Funds


Saving is an essential element that you must include in your family living expenses budgetary items. It’s more than a balancing figure allowing you to set money aside outside the emergency fund. It helps avoid unnecessary debt and unforeseen appointments with a bankruptcy agency.


Many people don’t plan for their future; they live for the present. Their mantra is you only live once. However, things won’t be rosy if old age catches up with you without a retirement plan. Remember, you won’t have the energy and opportunity to work effectively. For this reason, you should prioritize savings for a rainy day and avoid eking out for a living from menial work when old.


There are a couple of savings formulas to get you started with savings. For instance, you may adopt the 50 30 20 savings rule. This rule suggests that when budgeting, 50% of your income caters to family needs, 30% for wants, and 20% must be towards a savings plan.


According to Forbes, experts suggest saving at least 15% of your pre-tax income for retirement. However, if you do it for the first time and the plan seems to overstretch your budget, you may try increasing your savings by 1% annually. It would be best to do this until you reach your target savings plan of 15%.


When saving for your kids’ college, you may get overwhelmed with many options for consideration. For this reason, consider talking to a financial advisor expert for the best recommendation, depending on your financial status. You can also start by going for a 529 plan.


Emergency Funds and Legal fees


It’s astonishing that according to CNN, only a handful of Americans (39%) can afford $1,000 in emergency expenses! With the rising costs of goods and services, $1,000 might not cover all your expenses in an emergency such as a job loss. For this reason, if you can save more in your emergency fund, please do. However, don’t let the figure be the reason to forego essential family living budgetary allocations.


You never know when you’ll need legal representation in court. As a result, how about setting aside a budget for unforeseen legal battles in court? Legal expenses can be emergencies. You may be involved in an accident and need an accident attorney to help you with the case. However, you may be in trouble if you have a zero budget for such legal expenses.


Home Repair & Maintenance Sinking Funds


Are you in need of residential roofing services? Or perhaps you’re wondering if you can afford a bathroom remodeling contractor. If you have such home repairs or remodeling-related worries, how about opting for home repair & maintenance sinking funds?


Home repairs and maintenance can be very costly. As a result, it will be prudent to save in advance for projected home remodeling projects, such as asphalt driveway paving or custom doors installation, little by little. Doing so allows you not to overstretch your budget, and you can afford expensive home remodeling projects over time.


Listing family living budgetary expenses may be a daunting task. However, it’s vital to help you take control of your finances and avoid bankruptcy at all times. A budget isn’t restrictive, but it also has to be realistic. For this reason, when creating a budget, you must be keen not to miss key details. A simple mistake can ruin your whole budgeting process. If you have no idea how to start budgeting, this article is a start.

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