The Family Budget (Part 1) - What’s Involved?

Written by Gary Foreman
From his column Life Stewardship

life-stewardship-09-22_article.jpgThe “B” word—one we (or at least many of us) dread to hear: Budget.

Of course, a budget is not a bad thing. In fact, it is much like the 10 Commandments in its intent to keep us from harming ourselves or others. A budget can assist us in being responsible stewards of money, highlight priorities, and help us to reach life goals.

There are many programs and online resources available to help create a budget (some are listed later), but the important thing is, whether we choose an online budget calculator, a spreadsheet, or a pen and notepad, creating a budget, tracking what we spend and save, and modifying lifestyles to accommodate cash flow can provide peace of mind and financial rewards.

Let’s consider categories for a typical family budget:

  • Housing
  • Food/Groceries
  • Transportation
  • Health Care
  • Debt/Monthly Obligations
  • Child/Dependent Care
  • Discretionary Expenses

The major cost items of a budget usually are housing, food, transportation, and health care, but debt/monthly obligations and child/dependent care may be significant as well. Also, moving through the stages of life affects our categories. For instance, as children grow older, the need for child care ends, but then there is saving for the kids’ college. Or perhaps our employer covers most or all of our medical/dental expenses while we’re working. This might change when we get to retirement and start paying for Medicare Parts B and D, or Advantage plans. The need for life insurance is important when we have children in the home, but less so as we grow older. Also, housing may be a major expense during working years, but diminish as we near retirement and eliminate the mortgage.

Creating a budget, tracking what we spend and save, and modifying lifestyles to accommodate cash flow can provide financial rewards and peace of mind.

Housing costs trip up many families. They buy a home with a mortgage within their income, but fail to anticipate taxes, utilities or upkeep. Stretching to meet too-expensive housing can put a strain on everything else in a budget.

We have to eat, but we can usually eat more cheaply than we like. For active families, it may be difficult to cook and serve meals at home, but we may be able to save by using pre-prepared meals. Of course, preparation from scratch is the cheapest way to go.

Transportation is a tempting area for overspending. The average person’s car payment today is $700 a month, and some (12.7% of purchasers in June 2022) were $1,000 or more. A new car may have all the latest technology, but before we go car shopping it’s good to note that a car loses 40 to 50% of value in the first few years, and extended loans can be costly. The least expensive way to own a car is to purchase an already depreciated three-year-old vehicle and drive it until it’s not roadworthy or worth the cost of repairs.

Housing, food, and transportation are the first places to look if we need to cut expenses. Housing and transportation offer opportunities to make savings with a decision to refinance, downsize, or change insurers. Spending on food affords opportunities to save almost every day, not just when we’re at the grocery store.

Health care is essential, but expensive, and the cost continues to grow. Many are fortunate to be part of group plans subsidized by employers, but this can vary for pastors depending on the financial situation of a church. Pensions and Benefits USA encourages every church to provide health care benefits for their pastor and parsonage family. Many bivocational pastors (or their spouses) acquire health insurance through an employer outside the church.

The category of debt/monthly obligations is lower in our list, but can have a huge impact on a budget. Credit cards can be convenient if we pay the balance when the bill arrives, but when balances and interest are allowed to accumulate they can be a terrible drain on resources. Another form of debt, the cost of a college education, continues to grow and can be significant. It’s a good idea to explore options for reducing payments or seeking loan forgiveness if possible. (Editor’s note: see this article on the Public Service Loan Forgiveness [PSLF] waiver and this link from on President Biden’s announcement of student loan forgiveness that could affect millions of borrowers).

While we list it under discretionary, for most Christians giving to God is not optional. We seek to be good stewards. This means honoring God as the provider of all the blessings of life. For many, this means tithes and offerings. Jesus said, “For where your treasure is, there your heart will be also” (Mt. 6:21). Life stewardship is first and foremost acknowledging God as the source of all things.

While under the discretionary category, saving for retirement is essential. Most of us will live to a day when we no longer wish to work or are physically unable to do so. The best way to do this is by starting early to set aside money to take advantage of time and the earnings and interest that accrue as we get older. Many employers offer salary matches for contributing to a retirement account. We should try to take advantage of this where possible.

Short-term savings, also known as an emergency fund, can be a useful tool in getting past the normal events of life that occur—like a car or home repair. Everyone should start and contribute regularly to an emergency fund.

Next time: Creating and Using a Budget

Gary Foreman is an assistant pastor, author, former financial planner, and founder of and

Budgeting & Debt Management Tools – Fidelity
How to Create a Family Budget – Nerdwallet
10 Simple and Free Budgeting Tools – USNews
Best Budgeting Software – Investopedia
Best Budgeting Apps - CNBC
8 of the Best Budgeting Software Apps for Mac - Gadgetreview