How to Improve Family Savings

Brent Wiblin, Senior Managing Director, First Republic Bank
December 29, 2021

  • The average family of four spends over $88,000 on household expenditures each year.
  • Take advantage of the following tips to save on housing, utilities, food, transportation and more.
  • Learning how to save money as a family can bolster family savings, help build an emergency fund and help families hit both large and small savings goals.

Households (including single people) have many expenses to take care of each year. It shows in the numbers: The average annual expenditures of a household of four in America, not including family savings funds, are over $88,000, according to 2020-2021 data from the U.S. Bureau of Labor Statistics (BLS). Families need sufficient funds to cover these household expenses.

To grow savings and meet goals, you need to understand what the biggest annual expenditures are and how to minimize them.

Importance of family budgeting

The average income for all households before taxes in the United States was $87,432 in 2021 and the average annual expenditures were $66,928 — over 76% of the corresponding income. 

Compare the average income after taxes of different-sized families with their average annual expenditures:

Household Size

2021 Average Income After Taxes

2021 Annual Average Expenditures

Two People



Three People



Four People



Source: Bureaus of Labor Statistics

With so little money left over after taxes and expenditures, careful budgeting can help families cut down costs and allocate the extra money toward budget items like:

No matter how much money your family makes, following these money-saving tips can help you reach any larger financial goals you have in mind.

Budgeting tips for families

The biggest expenses for families include housing costs, food, and transportation. But even with increased prices, families can still limit their spending in many areas, particularly on big expenditures.

Saving money on housing and utilities

Housing costs for a family of four are approximately $15,000 to $30,000 annually, depending on location. Whether your family owns or rents, consider these money-saving tips:

  • Make an extra payment: Allocate cash windfalls to an extra mortgage payment to help pay it off faster and save money on interest.
  • Use less energy: Maintain a reasonable thermostat temperature, turn off lights when you’re not in the room and unplug appliances when not in use to help reduce your energy bill.
  • Invest in energy-saving appliances: An even more comprehensive approach, invest in energy-saving appliances or solar panels to lower your annual utility costs.
  • Explore other home locations: If you are willing and able, move to an area where the costs of land and living are less expensive to more affordably rent, buy or even build your home.

Saving money on food costs

Americans spend about 5 percent of their income on food. It’s possible to save money on food spending and bolster your family savings with a few strategies:

  • Eat out less: You can spend less by eating at home more frequently.
  • Carry a shopping list: To lower your grocery bill, make a shopping list before you go grocery shopping and curb any last-minute purchases.
  • Eliminate food waste: You can better manage food waste by meal planning, cooking smaller portions, and eating leftovers.
  • Buy produce in season: In-season produce typically costs less, and local farmer’s markets can sometimes provide better bargains compared to grocery stores.
  • Buy in bulk: Bulk shopping club memberships or local co-ops can save you money by allowing you to buy more for less, which can be an especially effective strategy for dried goods.

Saving money on transportation

Transportation costs — another large expense out of a family’s total expenditure budget — amount to about $9,000 annually for a family of four. You can use strategies to help trim your transportation costs.

  • Buy used vehicles: Buying used usually costs less than a brand new vehicle.
  • Limit driving: If possible, seek ways to drive less, such as walking, biking or working from home to cut commute times and gas expenses, as well as wear and tear on a vehicle.
  • Switch to one vehicle: If you’re able, becoming a one-car family can save an additional car payment monthly, as well as fuel expenses.
  • Opt for a staycation: Exploring new parts of your hometown can save a lot of money otherwise spent for costly airfare and lodging. Ditch an expensive out-of-town concert or cruise and check out a local festival instead.

While these three categories of expenditures are typically the biggest in a family budget, other ways to save money outside of these areas may be good options for your family.

More ways for families to save money

Families may find it helpful to sit down and create a monthly budget. Utilizing budgeting apps to this end can help you identify any overspending, stay on top of your day-to-day personal finances and start a conversation about how to minimize family expenses in these categories.

Saving money while shopping

The ubiquity of online shopping, especially with giant retailers like Amazon and eBay, makes it easier than ever to rack up credit card debt. Consider reaching for your debit card instead to ensure you never spend more money than you already have in your bank account and buying secondhand at thrift stores or consignment shops — it’s in vogue, after all — rather than paying a ton of money for the latest fashion.

Saving money on non-necessities

Here are a few other low-cost alternatives to common expenditures:

  • Ditch your big cell phone provider and go with a more affordable company, or at least downgrade your plan to one that reflects how many minutes and how much data you actually might use.
  • Take regular trips to your local library for the newest bestsellers and blockbusters instead of overstuffing your bookshelf and paying a hefty monthly fee for Netflix and all your other streaming subscriptions.
  • Eliminate store-bought seasonal and holiday decor and make it a DIY project for the whole family.

How will your family save?

However big your family is and however much money you make, it’s important to define and plan for your long-term financial goals. The more you can optimize your family savings and utilize money-saving tips, the closer you can get to realizing those goals.

Reaching out to a financial expert may be the best start to develop strategies to save money. This way, a professional can help families understand your entire financial picture, as well as know how to manage their money as effectively as possible.

With some time and effort focused on cutting unnecessary or excessive expenses, you’ll have more of your income left, and can make choices about where to allocate this extra cash, such as placing it into a savings account, money market account, certificate of deposit (CD) or 529 plan and ultimately reach your financial goals.

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Note: Throughout this article when we mention "families," we are referring to "consumer units" as defined by the Bureau of Labor Statistics, which includes families.