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Let Your Money Work As Hard As You Did For It! Read 3 Tips on How to Make Family Budgets



Creating a family budget is not as hard as you think; and as it applies to most things in life, practice does make perfect. But I will give you that ultimate head start, and hopefully, you won’t have to practice hard and long to become perfect.

First, let’s get the foundation right. We’ll weed out all possible assumptions and build the knowledge block that will hold everything else.

What is a family budget? A family budget is a quantified financial plan to manage the income and expenses of a family over a defined period. Let’s consider the elements of this definition individually.

Quantified financial plan
You have to detail your expenses and income in numbers. If you don’t have a regular paycheck and you don’t keep records of your income, then you’ll have to fix that first before making a family budget. You need to have at least an estimate, a fair financial value of your expenses and income over your preferred budgeting period. Towards the end of this post, I’ll show you how to get a workable estimate of your income and expenses.

Defined period
It’s been said, the difference between a goal and a wish is a defined time period. A budget is always made over a time period. For a young family whose major income source is the salaries of the couples, a month is great. For a family with children in schools and universities, and considerable income from business ventures; 3 months is better.

In more practical terms, a family budget is a family’s plan of meeting their living expenses, planned savings and investments. It helps the family members in fixing leaking pockets, understanding their finances, knowing the income they need to live comfortably, and to make near perfect money decisions. It fixes numerous family problems (present and future), especially the money problems. Both parents can give each other goals – expense limit and income growing goals.

So how do you make a family budget?

I’ll start with the wrong ways of making family budgets –

1.” My wife and I earn a combined salary of N850,000 per month. We should be able to save N200,000 per month.


You don’t set a goal before understanding your finances – income and expenses. You need to have a good estimate (better if it’s exact) of not just your income but your expenses to decide on your investment or savings goal. If you have a goal you must meet, this will help you to know if you need to grow your income to meet it as not all goals can be met by cutting expenses. You can’t make N100,000 per month and expect to save N80,000 per month if you have a family. You’ll have to get a pay raise or do a part-time biz.

2. “Before I married I was spending only N30,000 per month on feeding, and it was because I was eating out most of the time. Now I have been married for 8 months and have been spending N70,000 per month on food. This doesn’t make any sense. I must peg our feeding to N50,000 per month.

Wrong again!

Data is king. Start keeping track of your expenses on paper or spreadsheet. Only then can you set expense limit.

3. “With this new project I got for the company, my next month’s bonus is going to be huge. I must budget N300,000 for my GT Homes savings next month.


Budget is not about building castles in the air. You don’t budget the money that’s not in your hands. Even if it’s more certain that the Sun showing up tomorrow, you only consider it in the budget of the period after you get the money.

4. “I don’t earn a salary; my expenses are irregular just like my business income. I can never be able to make a sensible budget.


Budgeting is like a journey, starting is what matters most. All companies’ finances are irregular. Let’s use banks as an example. They make loans to people who might die and not pay up or simply be too bankrupt to pay. They have to make money from deposits of Nigerians who do not hesitate to withdraw everything at a split- second notice. And it’s like that for most companies, big or small. You already have an edge – you run your own biz. The extra stress in perfecting a family budget will rub off on your biz; you’ll develop money skills that will make your biz run more cost efficient.

Never feel like you don’t need a budget or can’t make a useful one. It’s not true and you’ll be worse off for thinking so.

So, back to the original question – how do you make a family budget?

It’s as simple as 1, 2, 3

1. Start tracking your expenses and income. Get a good estimate of how much you spend per month (or 3 months) and how much you earn per month (or 3 months). Spread your house rent and other less recurrent expenses over a month’s ( or 3 months’) period.

2. Analyze the records. Note where you can cut down on expenses. Set an expense limit.

3. Make a plan. Include your savings goal, investment goals and long term goals. Get a family budget worksheet. (send me an email at [email protected] and I will make one for you, free).

What next?

Stick to the plan.

Review the plan at the start of every budgeting period. Don’t adjust it in the middle of the period, better to end the month with a budget surplus or deficit. Fix the errors at the beginning of the next period. The discipline you’ll develop will help you in the long run.

Finally, learn personal finance the art of making your money work just as hard as you did for it. You need the knowledge of personal finance to cater for financial emergencies, to build a viable road map to your long-term financial goal, and to make the most of each Kobo you have left at the end of the month.

Photo Credit:

Michael Olafusi is a MS Excel Consultant, a Personal Finance expert and a Tech geek. He blogs at

Michael Olafusi is a Data Analysis and Business Intelligence consultant and founder of UrBizEdge Limited, a leading data analysis company. He writes his inside out daily at


  1. nikita

    September 18, 2013 at 1:39 pm


  2. someoneinneed

    September 18, 2013 at 1:57 pm

    Thanks a lot just what i needed at this time.

    • Michael Olafusi

      October 4, 2013 at 2:51 pm

      Thank you too for reading and commenting. Glad you found it
      relevant and useful!

  3. mwels

    September 18, 2013 at 2:05 pm

    Insightful indeed.

  4. Joan85

    September 18, 2013 at 2:31 pm

    Very insightful. Money is one subject most people tend to shy away from.
    My personal tip: Ever heard of Dave Ramsey’s Financial Peace University? If you have access to it, please try it. It will change the way you look at money…thank me later. 🙂

    • Michael Olafusi

      October 4, 2013 at 2:56 pm

      Checked out the Dave Ramsey’s Financial Peace University. Too bad they don’t take candidates in Nigeria. But looking at the curriculum it’s pretty much same with the stuffs I learnt on my own via online courses and lots and lots of finance books.

      Thanks for sharing!

  5. darkchildlovethyhair

    September 18, 2013 at 2:33 pm

    Very sound advice. It puts things into perspective.

  6. Blossom

    September 18, 2013 at 2:52 pm

    Michael, I’ve been stalking you for a while. Marry me naa?

  7. Gorgeous

    September 18, 2013 at 2:55 pm

    Excel spreadsheet for house expenses? Phew. Sounds like a lot of work. I just budget a cetain percentage of my salary every month and it goes into my savings and out of my reach. So i have to manage what is in my checking. LOL. i think that is simple enough please.

    • Michael Olafusi

      October 4, 2013 at 3:02 pm

      Lol! I have already done the hard work in preparing the Spreadsheet.

      Your method isn’t bad too. Nothing really beats simple. It’s just that simple isn’t always simple to work with and most of us need something to guide our every financial step.

      Thanks for your comment!

  8. Pretty

    September 19, 2013 at 10:07 am

    Nice write up Michael Olafusi but that your site dey somehow.

    • Michael Olafusi

      October 4, 2013 at 3:10 pm

      Thanks for the tip. I would also appreciate some suggestions, I’m more of a programmer than a graphics guy.

      And also thanks for the commendation!

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