How to Make Budgets for Different Financial Backgrounds

Making a household budget—and sticking to it—is one of the best ways to become financially secure.  

Good budgeting can help get you out of the paycheck-to-paycheck lifestyle. It helps you spend less than you earn. And, it helps you pay your bills on time, eliminate debt, and save more money.  

You want all those things, right?  Great!  

In this article, we’ll show you how to make a household budget that suits your unique financial background. That way, you’ll be able to follow the budget and improve your financial health. 

How to make a household budget you’ll actually follow 

To make a household budget you’ll follow, you need to use realistic numbers for your income and expenses and hold yourself accountable. You also need to make sure that what goes out (your expenses) doesn’t exceed what comes in (your income). Adhering to a budget sounds simple, but it requires discipline and execution.  

You should start by writing down your plans and goals. This step is important: you’re 42% more likely to achieve your budget goals if you write them down. It provides clarity on what you need to do and forces you to strategize. If you need the motivation to make a budget, consider these statistics: 

  • Only 29% of people feel financially strong, while 54% are financially “coping” and 17% feel financially vulnerable (Financial Health Network data). 

That’s pretty alarming.  

If you don’t feel financially secure or are living paycheck to paycheck, it’s time to act by making a budget. You should design that budget to get you out of day-to-day money worries and on the path to financial security.  

But how exactly do you do that? And how do you make a household budget you’ll actually follow? The truth is there is no one-size-fits-all approach.  

While you may have heard of different budgeting methods, such as zero-sum budgeting, you’ll need to customize your household budget to your family’s financial background, priorities, and unique goals and lifestyle. That’s how you create a household budget that works.  

Household budgeting for low-, middle-, and high-income families 

How do budgets differ between families from different financial backgrounds?  

The infographic below from NPR, which uses data from the U.S. Bureau of Labor Statistics, sheds light on how budgets vary across a spectrum of incomes. 



Working class (left); middle-class (middle); upper-class (right) 


As you can see, households from different financial backgrounds allocate different amounts of money to each category of their budgets. For instance, working-class folks spend a higher portion of their incomes on food at home, transportation, and healthcare than other families. That’s because money is typically tighter for those in that income range, and they have to prioritize the necessities.  

Now, let’s get started with making a household budget. We’ll begin by taking a look at some sample household budgets for each income class. 

A sample household budget for working-class homes 

A good budgeting method for working-class households is a “zero-sum” budget. It works well because it allows you to give every dollar a job. It’s highly organized and allows for hyper-focus on paying bills and staying out of debt.  

As a guide in NerdWallet notes, the goal of zero-based budgeting is for your monthly income minus expenditures to equal zero. If money is left over, that’s great! But you should allocate it to other household budget categories, such as paying down debt.  

Here’s an example of a zero-sum household budget for a working-class family of four making $30,000 per year after taxes ($2,500 per month).  

Household Budget Category 






Cell Phone 


Kids’ Extracurriculars 




Clothing, Household Items 






Dining, Entertainment, and Travel 




                Total Expenses: $2,500 

This is a solid budget for a working-class household. 28% of their income is spent on housing, and a combined 38% is spent on necessary expenses (utilities, phone, transportation, groceries, kids’ extracurriculars, household items, and clothing). Each month, 12% of their income is saved for things like retirement, kids’ college funds, and emergency reserves.  

A sample household budget for middle-class homes 

For our middle-class sample household budget, we’ll use the 50/30/20 method—another great household budgeting method. The beauty of the 50/30/20 budget is that it simplifies budgeting by splitting your household’s expenses into three categories: 

  • 50% of income goes toward needs 

  • 30% of income goes toward wants 

  • 20% of income goes toward savings and paying off debt 

To see what a 50/30/20 budget might look like for a middle-class family, we’ll use the example of a family of four that earns $66,000 per year after taxes ($5,500 per month): 

Household Budget Category 



Includes mortgage, utilities, groceries, clothing, kids’ extracurricular classes, car payment, transportation, etc. 





Includes dining, travel, and entertainment 



Savings and Debt 

Includes 401K contributions, credit card debt, emergency savings, kids’ college savings, etc.  




A sample household budget for upper-class homes 

Both the zero-sum and 50/30/20 budgeting methods work well for upper-class household budgets.  

For this example, we’ll use a mix of those budgeting styles—with a little twist. We’ll throw in what’s called “financial freedom” budgeting. Budgeting with financial freedom in mind places a higher priority on savings for retirement.  

For our sample budget for an upper-class household, let’s say that a family of four earns $132,000 after taxes ($11,000 per month). The following sample budget uses the 40/25/25/10 model and zero-based budgeting method (i.e. every dollar gets a job).  

Household Budget Category 


Needs (40%) 

Includes mortgage, utilities, groceries, clothing, kids’ extracurricular classes, car payment, transportation, etc. 




Wants (25%) 

Includes dining, travel, and entertainment 



Savings and Debt (25%) 

Includes 401K contributions, credit card debt, emergency savings, kids’ college savings, etc.  



Additional Investments (10%) 

Real estate, stocks, commodities, cryptocurrencies, etc. 




Resources for creating a household budget 

You’ll find a lot of resources that can assist you with making a household budget. This article is a great place to start. Our other resources at Personify Financial can help as well.  

Additionally, make use of other tools such as:  

Final advice on household budgeting 

Each family has different financial priorities. However, there are similarities between all types of budgets. We all want to be financially secure. No matter what budgeting method you use, make sure your budget aligns with your family’s priorities, goals, and lifestyle preferences.  

As you implement your budget, make adjustments based on your actual spending habits to better suit your household’s needs. Additionally, take time to educate yourself about personal finances. The more you know about managing your money, the more success you’ll have with household budgeting. By staying disciplined, motivated, and learning as you go, you’ll be well on your way to financial peace and prosperity.  


The material presented here is for informational purposes only and does not represent specific financial advice to you or your circumstances personally.