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How Parents Can Create Household Budgets
5-16 family budget pix

Raising a family is no small feat. Along with the love and joy, there are some obstacles that must be surpassed, including the financial investment required.

A 2015 report from the Department of Agriculture found that middle-income married couples would spend an estimated $233,610 to raise a child born in 2015. Parents who find that figure high should know that it does not include costs incurred after children turn 18. So parents could be responsible for nearly a quarter million dollars before they ever write a college tuition check.

The high cost of raising a child only emphasizes the importance parents must place on creating household budgets. A few dollars put away here and there can add up to substantial savings over the years.



Housing is many families’ most substantial monthly expense. When determining how much they can afford to pay for housing, families may come up with a figure they’re comfortable paying for their monthly mortgage. But it’s important that parents, particularly those who have never owned their own home before, also take utility costs into consideration before signing their mortgage agreements. Utility costs for single-family homes can dwarf the cost of utilities in apartments.

The U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey recommends people making housing budgets commit 58 percent of total housing costs to mortgage payments, 21 percent to utilities, just over 9 percent to furnishings and equipment, and roughly 7 percent to household operations. Utilizing this formula before taking out a mortgage can help families ensure they are not scraping pennies together each month to meet their housing costs.



Food is another significant expense, especially for growing families. The BLS notes that the average U.S. household spends just about 13 percent of its monthly budget on food. Parents who examine their spending habits over the previous year can look at how much they’re devoting to food and find ways to reduce that figure if it’s well over 13 percent. Reducing food spending may require more savvy spending at the grocery store, including shopping sales or buying certain items in bulk when it’s advantageous to do so.



Parents may find this odd, but the BLS reports that the average U.S. household spends more of its monthly budget (roughly 17 percent) on transportation than it does food. Parents who want to trim their monthly budgets can opt for more affordable cars and trucks, reserving their splurging on luxury vehicles for later in life when their kids have moved out of the house.


Miscellaneous expenses

When creating their household budgets, parents should leave room for unexpected miscellaneous expenses, such as healthcare costs if the children get sick and clothing and entertainment. Without accounting for such expenses, parents may find themselves taking on potentially crippling debt in times of emergency.