Household Budgets

Household Budgets

Budgeting is planning how you spend money so that all essential expenses (needs) are paid for before non-essential expenses (wants). Budgets help you avoid overspending and save for the future.

• Budgets can be weekly, monthly, or yearly.
• A household budget depends on:
  • The number of people in the family.
  • The income coming in.
  • The cost of rent/mortgage payments.

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Advantages of Budgeting

✔ Reduces stress – essentials (like rent and bills) are paid.

✔ Helps avoid overspending on non-essentials.

✔ Shows where money is wasted and where savings can be made.

✔ Prepares for large bills and seasonal costs (e.g. Christmas presents).

✔ Sets a good example for children.

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Dividing the Budget

The budget divides income into different categories:

• Housing: 25%
• Groceries: 25%
• Household expenses: 15%
• Education/childcare: 10%
• Travel: 10%
• Clothing: 5%
• Medical: 5%
• Savings: 5%
• Entertainment/leisure: 5%

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Sample Household Budget

Below is an example of a two-income family with one child (aged 2).

Expense	Percentage	Amount per month
Housing	25%	€844.13
Groceries	25%	€844.13
Household expenses	15%	€506.48
Education/childcare	10%	€337.65
Travel	10%	€337.65
Clothing	5%	€168.83
Medical	5%	€168.83
Savings	5%	€168.83
Entertainment/leisure	5%	€168.83
Total	100%	€3376.54

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The Five-Step Money Management System

Money management is about using money wisely to achieve your goals.

1. Set a goal:

• Example: Save for a family holiday or pay household bills on time.

2. Identify resources:

• Resources = money, time, knowledge, or skills.

3. Plan:

• List all income and expenses.
• Allocate money to each expense category.
• Prioritise essential expenses first, then non-essentials.

4. Action:

• Put your budget plan into action!

5. Evaluate:

• Did your budget work?
• Were you able to pay for all essentials and save for any goals?

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The Money Advice & Budgeting Service (MABS)

• MABS is a free government-funded service.
• It helps families and individuals manage their money and debts.
• Offers advice on budgeting and avoids debt problems in the future. 🔗 Visit MABS: www.mabs.ie