How to create a family budget: 5 steps
Written by
Emily Tye
Reviewed by
Amy LancashireTo create a family budget:
Add up your household's take-home income, including Child Benefit
If there are 2 of you, agree how you'll share the bills
Add your children's regular costs, including childcare
Plan for the costs that come with the school year
Update your budget when your family changes
If you've not made a budget before, start with our guide on how to budget. This page covers what's different when you're budgeting for a family.
Step 1: Add up your household income
Start with the take-home pay of every adult in your home, then add any money you get because you have children, such as:
Child Benefit: from April 2026, it's £27.05 a week for your eldest or only child and £17.90 a week for each other child
Universal Credit: this includes an extra amount for each child. Since April 2026, it's paid for every child in your family, because the two-child limit has been removed
Child maintenance: if you get payments from your child's other parent
Scottish Child Payment: if you live in Scotland and get certain benefits, you can get £28.20 a week for each child under 16
Child Benefit is usually paid every 4 weeks, not every month, so you get 13 payments a year rather than 12. For 2 children, each payment is £179.80. Budget for 1 payment a month and put the extra one towards your school-year costs in Step 4.
If either of you has an adjusted net income over £60,000, you may have to pay some of your Child Benefit back through the High Income Child Benefit Charge. You pay back 1% of your Child Benefit for every £200 of income over £60,000, and all of it once income reaches £80,000. It's based on the higher earner's income, not what you earn together, so budget for the Child Benefit you'll actually keep.
Step 2: Agree how you'll share the bills
If you're a couple, agree how you'll pay for shared costs first. You could use one of these 3 approaches:
Approach | How it works | Works well if | The catch |
|---|---|---|---|
Split it equally | You each pay half of the shared bills | You earn about the same | It can leave the lower earner with less to spend |
Split it by income | You each pay the same share of your income | One of you earns more | You need to redo the sums whenever either income changes |
Pool everything | All your income goes into one account and everything's paid from there | You make most money decisions together | Neither of you has money of your own unless you agree personal spending money |
Here's how splitting by income works. Say one of you takes home £3,000 a month and the other £1,500, so one of you earns twice as much. If your shared bills are £1,500 a month, the higher earner pays twice as much too: £1,000, and the other pays £500.
One option is to pay shared bills from a joint account and keep your own accounts for personal spending. Note: opening a joint account links your credit files, so a lender could look at your partner's credit history when either of you applies for credit. Our guide on how joint accounts affect your credit score explains more.
If you're bringing up children on your own, you can skip this step. If you live in England, Scotland or Wales, check you're getting the Council Tax single person discount: if you're the only adult in your home, you can get 25% off your bill, and children under 18 aren't counted. You'll need to apply to your council for it.
Step 3: Add your children's regular costs
Go through your last 3 months of bank and card statements and add up what you spend on:
Childcare, including breakfast and after-school clubs
School lunches, or the extra food for packed lunches
Clubs, classes and activities
Travel to and from school
Clothes and shoes
Nappies, formula and baby toiletries, if you have a baby
Pocket money
Help with childcare costs
Check what help you can get before you budget for the full cost of childcare. Wherever you live in the UK, you might be able to get:
Tax-Free Childcare: for every £8 you pay into a childcare account, the government adds £2, up to £2,000 a year for each child aged 11 or under. This goes up to £4,000 a year for a disabled child, up to the age of 16
Universal Credit: you may be able to claim back up to 85% of your childcare costs, up to a monthly limit
You can't get Tax-Free Childcare while you're claiming Universal Credit, so check which would leave you better off.
Each nation also has its own help:
Where you live | Help you might be able to get |
|---|---|
England | Working parents can get 30 hours of free childcare a week for 38 weeks of the year for children aged 9 months to 4 years. You may be able to take fewer hours a week over more weeks, so ask your childcare provider. |
Scotland | Children aged 3 to 5 can get up to 1,140 hours of funded early learning and childcare a year: about 30 hours a week in term time, or 22 hours a week if you use it all year. Some 2 year olds can get it too. |
Wales | Working parents, and parents on a further or higher education course, can get up to 30 hours of funded nursery education and childcare a week for 3 and 4 year olds, for up to 48 weeks of the year. |
Northern Ireland | Working parents who get Tax-Free Childcare can get 15% off their childcare fees, up to £203 a month for each child, if their provider has signed up to the Northern Ireland Childcare Subsidy Scheme. You can also apply for a funded pre-school education place in the year before your child starts primary school. |
Budget for any weeks your funded hours don't cover.
Free school meals
You may be able to get free school meals, depending where you live:
Where you live | Who can get free school meals |
|---|---|
England | Every child in Reception, Year 1 and Year 2 at a state school . From September 2026, children in any household that gets Universal Credit can get them too, whatever you earn |
Scotland | Every child in P1 to P5 at a council-run or Scottish Government-funded school, whatever you earn. In P6, P7 and secondary school, children can get them if you get certain benefits, including Universal Credit if your monthly earned income is £995 or less |
Wales | Every primary school child. Your council can tell you whether older children can get them |
Northern Ireland | It depends on your income and benefits. If you get Universal Credit, your household take-home pay needs to be £15,900 a year (£1,325 a month) or less |
In England, the Department for Education says the September 2026 change could save you up to £495 a year per child. If your child qualifies because of your income or benefits, you'll need to apply. Your child's school can tell you how.
Step 4: Plan for the school year
A lot of family spending bunches up around the school year: uniform before the new school year, childcare in the holidays and celebrations at the end of term. Research from Loughborough University puts the minimum cost of sending a child to state school at over £1,000 a year for primary and nearly £2,300 a year for secondary, covering things like food, uniform, transport, learning materials and trips.
Use this calendar to list what your family spends at each point in the year:
When | Costs to plan for |
|---|---|
August or September | School uniform, shoes, PE kit, bags and stationery, plus clubs and activities starting again |
October | Childcare or activities for the school break |
November and December | Christmas, school fairs, non-uniform days and costumes for school plays |
February | Childcare or activities for the school break |
Easter holidays | Childcare or activities for the Easter break |
Summer term | School trips, sports kit and end-of-year events |
Summer holidays | Childcare for the summer break, plus any family holiday |
All year | Birthdays, including presents for other children's parties |
School holiday dates and lengths vary across the UK, so check your child's school or council.
Coram's 2026 survey found a holiday club place costs an average of £191 a week in Great Britain, or £1,145 per child for a 6-week summer holiday.
Add up what these costs came to over the last year, divide by 12 and set that amount aside every month. If you're starting in the spring, you may need to save more until the new school year, as you'll have fewer months to build it up.
You may be able to get help with school uniform costs, depending on where you live:
England: whether there's help in your area. From September 2026, schools shouldn't ask you to buy more than 3 branded uniform items, or 4 at secondary and middle schools if one of them is a tie
Scotland: if you get certain benefits, you can apply to your council for a of at least £120 for each primary school child and £150 for each secondary school child. Your council decides who can get it
Wales: if your child can get means-tested free school meals, you can apply for a of £125 a year for each child from Reception to Year 11, or £200 for a child starting Year 7. It covers uniform and other school costs
Northern Ireland: if you meet the same income rules as for free school meals, you can apply for a of £42.90 for a primary school child, or £87.60 to £93.60 for a secondary school child including PE kit
Step 5: Update your budget when your family changes
A family budget that works this year might not work next year. Plan ahead for changes like these:
Change | What it means for your budget |
|---|---|
Having a baby | Statutory Maternity Pay is 90% of your average weekly earnings for 6 weeks, then £194.32 a week or 90% of your earnings, whichever is lower, for 33 weeks. Plan for the drop in income, add baby costs and claim Child Benefit. |
Starting nursery or school | Nursery fees may fall once funded hours start, and stop when your child starts school. Breakfast clubs, after-school clubs and holiday childcare may take their place. |
Your child turning 16 | Child Benefit stops on 31 August on or after their 16th birthday, unless you tell HMRC they're staying in approved education or training. It can then carry on until they're 20. |
Either of you changing jobs or hours | Redo Step 2, especially if you split bills by income. |
Separating | You'll each be budgeting on 1 income. Check whether child maintenance now applies and, if you live in England, Scotland or Wales, the Council Tax single person discount. |
How much does a family of 4 spend each month?
In the year to March 2025, households of 2 adults and 2 children in the UK spent an average of £883.20 a week, according to the ONS Family Spending survey. That works out at about £3,827 a month. Here's how it breaks down:
Spending | What's included | Average a month |
|---|---|---|
Transport | Buying vehicles, running costs like fuel and repairs, and fares | £577 |
Housing, energy and water | Rent, energy, water and repairs, but not mortgage payments, Council Tax or rates | £519 |
Recreation and culture | Days out, hobbies, toys, pets, TV subscriptions and package holidays | £506 |
Food and non-alcoholic drinks | Food shopping | £426 |
Other goods and services | Includes personal care, insurance and childcare | £250 |
Restaurants and hotels | Eating out, takeaways, school meals and holiday accommodation | £244 |
Household goods and services | Furniture, appliances and cleaning products | £240 |
Phone, broadband and post |
| £118 |
Clothing and footwear |
| £111 |
Alcohol and tobacco |
| £42 |
Mortgage interest, Council Tax or rates, and other payments | Also includes road tax, holiday spending money and cash gifts | £624 |
Total |
| £3,827 |
We've converted the ONS weekly figures to monthly ones (multiplied by 52 and divided by 12) and rounded them to the nearest pound. ONS doesn't publish health and education spending for this type of household, so the categories add up to less than the total.
Use these figures to sense-check your own budget, not as a target. They're averages across all families of this type, including those who don't pay for things like rent or childcare, so your own numbers could look very different. They also leave out part of the cost of a mortgage: ONS counts mortgage interest, but not the part of each payment that pays off the loan.
FAQs
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
