How to create a family budget

1. Total your net income

• Paychecks and tips
• Freelance or side business income
• Social Security benefits
• Child support or alimony
• Other income sources

2. List your monthly expenses

• Fixed expenses: These expenses occur every month for the same amount, such as rent or mortgage, insurance premiums, daycare, and child support or alimony. If you have any expenses that occur quarterly, annually, or on a schedule other than monthly, simply divide the total by the number of months in each billing cycle. For example, say you pay your car insurance bill of $500 every six months. The monthly average would be $500 divided by 6, which is $83 each month.
• Variable expenses: These are expenses that fluctuate month to month, such as your electricity bill or groceries. Look at what you’ve spent for each over the past 12 months, then average each total to give you a benchmark for your budget each month.
• Healthcare: While your insurance premium is a fixed expense, your out-of-pocket costs will vary over time. One way to account for this is to take the annual out-of-pocket maximum on your health insurance plan and divide it by 12. For example, if your annual out-of-pocket maximum is $6,000 a year, a good idea is to set aside $500 per month ($6,000 divided by 12) for potential out-of-pocket costs. If you don't end up using it all over the course of the year, then you'll have some money left over for next year.
• Debt payments: Focus on paying down debts quickly — maybe even applying extra payments when your budget allows — so you can contribute more to your other goals, such as savings.
• Discretionary spending:
  • Concert tickets
  • Meals out
  • Happy hours
  • Whatever else you like to spend your "fun" money on.
  Generally, discretionary spending should account for no more than 30% of your total income.1

3. Set aside money for savings

20% of your total income should be dedicated to savings, with the recommended savings split being:

10-15% Retirement fund

5-10% Other savings, such as:

• Emergency fund
• Vacation fund
• College savings for your fund

Tip: What is the 50/30/20 Rule? 50% of paycheck goes toward needs. 30% of paycheck goes toward wants. 20& of paycheck goes toward savings.

See how the 50/30/20 rule can help you budget.

Learn more about budgeting and download our customizable worksheet at www.synovus.com/familybudget.