4 Things We Can Learn from the US Federal Budget

Planning and preparing a country’s federal budget is no small task. In the United States, not only is the President involved in the process, but both the House and Senate have committees that are responsible for voting on and approving the budget.

They spend months gathering reports on revenue, and attending meetings to figure out how much money is available to budget with and to determine how best to allocate that money. 

It makes sense that the federal budget takes a small army to enact. There are almost 330 million Americans, many of whom rely on federally funded programs for their livelihood.

And even the government itself can’t run without the budget—if it doesn’t get approved in a timely fashion, the government is at risk of shutting down. 

While it’s true that the federal budget is many times more complicated—not to mention costly—than our personal budgets, there are still principles that we can learn from the process. 


When the President starts working on a budget request, they work with multiple offices and committees to gather reports on past revenue and spending so they have an idea of what they should budget for in the new fiscal year. 

What that shows is that there’s not an unlimited amount of money that can be budgeted. The national leaders (and later, the other committees and offices that must vote on and approve the budget) need to know exactly how much they have to work with. Once they know that, they can begin the process of prioritizing spending in a way that makes sense with their goals. 

(Now, if you’re familiar with the concept of the federal deficit, you’ll know that the federal budget often spends more than what’s brought in, but we’ll cover that topic later on.)

What we can take away from this process is the idea of prioritization. Just like how the government prioritizes the national spending, we can prioritize our budgets so that we’re focusing on things that are important to us. 

And that’s important because the reality for many of us is that we won’t be able to afford all the things we want while still having enough for the things we need

Spend Less Than You Earn

As mentioned above, the federal government generally spends more than it brings in. The reasons for this are complex—some think it’s because taxes are too low, and others think that spending is too high. Either way, the federal deficit has been steadily growing for a number of years

If the government were a person, they probably would have filed for bankruptcy a long time ago, showing just how harmful budgeting with a deficit can be for someone’s long term financial health. 

It’s much more ideal to create a budget that is equal to what we bring in. Better yet, create a budget that spends less than what’s earned. That way, the extra income can be set aside into one or more savings pots, which further helps to buffer us against financial emergencies. 

Involve Key Stakeholders

Even though ordinary American citizens aren’t directly involved in the complex budget making process, at the end of the day, the federal budget is for the American people. And when we cast our votes to elect officials that we hope will represent our voices and values throughout the process, we help create it indirectly. 

What we can take away here is that those who are responsible for making and approving the budget are considering the people for whom the budget is actually for. That’s something we can do for our own budgets too.

When you create your own budget, take the opportunity to include others who the budget will be affecting in the creation process. This can help ensure that the budget works and makes sense for everyone involved. 

If you’re not sure how to include your kids, check our review of the Consumer Federal Protection Bureau’s financial resource called Money As You Grow. It’s a resource guide that seeks to help parents teach kids about money and budgeting in age-appropriate ways. 

Follow a Schedule

There are certain deadlines that the government must hit to make sure the new budget gets approved by October 1st each year, which marks the start of the new fiscal year. If they’re not able to make their deadlines and get the budget approved by October 1, the government is at risk of shutting down.

Our budgets and households might not shut down if we don’t approve a new budget, so any deadlines we set for ourselves won’t have nearly the same stakes. But still, giving ourselves a deadline for specific milestones each year or month can help us stay true to the budgeting goals we set for ourselves. 

For example, if you know you’d like to have a family budget meeting each month, try putting it on the calendar for the same time each month so the whole family can remember when it’s happening and prepare ahead of time. 

Our household budgets are nowhere near as complex as the federal budget. But the same principles that help the government succeed time and time again can also aid us when it comes to making a budget. 

Subscribe to the Newsletter

Get the latest in budgeting content — straight into your inbox.

Thank you!

See you in your inbox.

Search for


Say hello to Goodbudget

  1. A strong philosophy.
    Transform your financial life with the Goodbudget Way.
  2. A time-tested system.
    Goodbudget is based on the envelope budgeting method.
  3. Great budget software.
    Available for the Web, Android, and iPhone. Get started with Goodbudget. Sign up now!

Get Help




Leave a Comment