How to Manage a Shared Family Budget

Families have been using FamZoo cards as a simple, effective budgeting tool since 2013. Multiple cards are used to partition funds into separate subaccounts dedicated to specific purposes: everyday spending, saving for a goal, charitable giving, dining out, clothing, online gaming, family vacations, you name it.

This works beautifully when the funds in a subaccount are spent by a single family member. But how do you handle the case where multiple family members need to draw from the same budget bucket?

Over the years, families have developed a set of best practices for managing this scenario. Here’s how to apply them using a family-wide monthly budget for dining out. Note: I’ve arbitrarily chosen a monthly budgeting cycle for this Dining Out example. Choose any budgeting cycle — monthly, weekly, quarterly, annually, even daily or ad hoc — that fits the category and your family’s circumstances.

1. Create a shared budget subaccount. Order a “Dining Out” card under one of the parent family members — typically the registering parent. This card serves as the shared budget container, not a card that’s normally used directly for purchases.

2. Ensure everyone has a spending card. Make sure each family member participating in the shared budget has their own spending card.

3. Allocate the budget. At the beginning of the month, add the budgeted amount to the Dining Out subaccount. If desired, you can create a monthly “Dining Out” allowance to automate the transfer each month.

4. Draw down the budget. Before each dining purchase, transfer enough funds to cover the expected amount from the shared budget subaccount to a family member’s spending card. Any parent family member can make this transfer instantly in the app. Family members in the dependent role can issue a transfer request that must be approved by a parent before the shared funds are released. Important: To allow these requests, a parent must enable the “Allow Money Requests Between Members” option in the family settings.

5. Return any excess to the budget. If the amount drawn from the budget exceeds the final settled purchase amount, transfer the excess funds back to the shared budget subaccount. Or leave the excess as a spending bonus for coming in under budget. 🙂

6. Review the budget. At the end of each month, see where you stand. Use FamZoo’s powerful search, analysis, and reporting tools to see where the money went — and to inform family discussions. If there’s money still left in the shared subaccount, decide whether to let it roll over to next month’s spending, transfer it back to the primary funding card, or apply it to another subaccount — like the “Family Vacation” subaccount.

If you’re new to family budgeting, I recommend an incremental approach. Start simple with just one category of discretionary spending that your family finds most problematic. Once you get that spending under control with a shared budget subaccount, move on to the next.

Divide and conquer those dollars!