- Income of the family:
Poor families have very low income; hence they spend most or all of their income on basic necessities. Basic necessities include food, clothing and shelter. However when income of the family increases the proportionate amount of income spent on basic needs and wants will diminish simultaneously the amount of income spent on higher level of wants increases and saving will be more.
- Size of the family:
Expenditure of the family depends upon the size of the family. If the family is large amount spent on the needs of the more members will be more. If the number of members of a family is less the amount spent will be less. The size of the family is indicated by the number of adults and children. Some families have more members and hence the size of the family is large and expenditure is more. While the money spent by a small size family is less with less number of members. The expenditure per capita or per person is taken note of while preparing the budget and the budget is prepared accordingly.
- Composition of the family:
Composition of the family refers to the number of male, female members and children and old age members etc. Income is allocated for expenditure to the needs of male and female members ,old age and children since the requirements of their different members of the family is different. Hence the composition of the family has a bearing on the expenditure and budget of the family.
- Occupation of the family members:
Budget allocation is influenced by the nature of occupation of the head of household who is the main income earner who has the responsibility of spending money and saving out of his income. Jobs or occupations have their benefits in some cases. Such benefits may be in the form of free quarters, educational facilities for children’s, health allowance etc. a job might involve more travel another may involve expenditure on books or equipments. All these have a bearing on the income and expenditure implications for the family. Hence they have their effect up on family budget.
Family life cycle has an important influence on family budget. Life cycle of the family relates to early period after marriage, period when the couple gets children, period when grown up children leave the family and the last stage is the period of retirement. The demand on a family income varies according to the family life cycle. More money is needed in the expanding stage of the family. The children need food, dress, and education and hence more expenditure is involved but income is relatively less. Expanding family also may require additional expenditure or home furnishing utensils etc. In the contracting stage when income remaining on some or even it may shrink expenditures on wedding etc, may occur hence a budget has to be set to adjust with the changes in income and also the spending. The budget of a family is affected by the family life cycle.
- Intercity differences:
There are differences in the cost of living in different cities. Cities are classified as A B C depending on the price of essential goods affecting the cost of living. In cities like Delhi, Mumbai, Kolkatte and Chennai which are A class cities the cost of transportation, fuel rent etc are high. Hence the Government has fixed city allowance at different level for different class of cities for employees. Hence the differences in cities based on cost of living the people have to adjust their income according to their expenses. Thus the intercity differences affect the family budget.
- Family goals:
Families show differences in their values and related goals. Some families will value financial security; others may value social status. The farmer will have goals of accumulation of physical and liquid assets. The latter have goals of acquisition and status –symbol items like having more than one car etc. These differences in values influence the pattern of income and expenditure. Hence they have to fashion their family budget accordingly.
- Socio-Economic Status of the family
Socio economic status of the family has a bearing on the family budget. The factors influencing the socio-economic status of the family include income, education level and occupation of the members. There will be more expenditure by families with socio-economic status since they have to satisfy their psychological needs, wants of the family members, viz accommodation in posh locality, club membership, higher education etc. Hence the family budget is affected by these factors.
- Gainful Employment:
Women are seeking gainful employment outside the home. Economic necessities compel them to take up employment. Hence there shall be a change in the pattern of expenditure because of additional expenditure on services, clothes, transportation etc.
Participants