How to build a family budget

In a nutshell

A budget means deciding in advance where the month's money goes. You start from the family's net income, take out fixed costs, set aside what you will save and split the rest among variable costs. Then you check once a week that you are on track. You can build your first one in about 15 minutes.

The four pieces

• Net income: the money that actually lands in your account after payroll deductions. Do not use the gross figure on your payslip.
• Fixed costs: those that repeat every month at a similar amount, such as rent, building fees, electricity, water, internet and school.
• Variable costs: those that change with the month's choices, such as groceries, transport, pharmacy, leisure and gifts.
• Save first: an amount set aside as soon as money comes in, before you start spending. If you wait to save "whatever is left", there is almost never anything left.

A reference split

A well-known split is 50/30/20: 50% of income for needs, 30% for personal choices and 20% for saving or paying off debt. Use it only as a starting point, not as a rule. A family paying high rent, for example, will not fit in 50%. That is fine. What matters is knowing where you stand and adjusting little by little.

Example

Ana and Carlos live in Brazil. Ana earns R$ 3,000 net and Carlos R$ 2,000 (R$ is the Brazilian real). The household net income is R$ 3,000 + R$ 2,000 = R$ 5,000.

Under the 50/30/20 reference, that would be R$ 2,500 for needs, R$ 1,500 for choices and R$ 1,000 for saving. The couple used these numbers only to compare.

Their real budget looked like this:

• Save first: R$ 500, set aside on payday. That is 10% of income, half the reference. It is a possible start.
• Fixed: rent R$ 1,300 + electricity R$ 150 + water R$ 100 + internet R$ 100 + school R$ 350 = R$ 2,000.
• Variable: groceries R$ 1,200 + transport R$ 400 + pharmacy R$ 200 + leisure R$ 300 + other R$ 400 = R$ 2,500.

Checking: R$ 500 + R$ 2,000 + R$ 2,500 = R$ 5,000. Every real has a destination.

For the weekly check-in, they split variable costs over 4 weeks: R$ 2,500 ÷ 4 = R$ 625 per week. Groceries alone: R$ 1,200 ÷ 4 = R$ 300 per week.

Step by step

1. Add up the net income of everyone who contributes to the household.
2. List fixed costs and the amount of each.
3. Decide how much to save first. If 20% feels like too much, start with 5% or 10%.
4. Split what is left among variable costs, using the last few months as a base.
5. In Meu Gasto, open Budget and, under Limits by category, enter how much you plan to spend in each one. The screen shows planned next to spent, and Reports help you compare.
6. Once a week, look at how much has gone out in each category and compare it with the weekly amount.
7. At the end of the month, adjust next month's budget with what you learned.

Common mistakes

• Using gross income. Gross salary includes deductions that never reach your account. Plan with net income.
• Treating the reference as law. 50/30/20 is a starting point. If your reality is different, adjust and move on.
• Saving at the end of the month. By then the money is gone. Save on the day it comes in.
• Reviewing only at month's end. By then it is too late to fix anything. A quick weekly look lets you change course in time.
• Forgetting seasonal costs. School supplies, vehicle tax and holiday gifts also need a place in the budget.