Family Economics and Consumer Education

Family Economics And Consumer Education 3 (2+1)

Lesson 07 : Planning Of Family Budget

Items of Expenditure in budget

A list of items can be prepared based on the regular expenditure pattern.
They are divided into

1. Primary Items
2. Secondary Items
3. Tertiary Items.

Primary Items: Primary items consist of food, housing and clothing.
Food: Items in this group consists of expenditure on provisions, vegetables, fruits etc. Fuel used for cooking, cook’s charges, cost and maintenance of all kinds of budgets small and big can be also taken under this category. All festival, party expenditure incurred at home, hostel, friends place should also be included salary of male servants may be included in this.
Housing : Expenditure on housing includes rent, house tax, repairs, furniture and other interiors, care of house in terms of cleaning, buying mops, brushes, cleaning reagents, cleaning charges, telephone, electricity, water charges etc.
Clothing : Expenditure in this regard include buying clothes for different seasons, occasions, stitching charges, wardrobe costs and maintenance mending charges, washing and ironing charges, raincoats, all these and offer related clothing expenditures are included in this category.
Secondary Items:
Secondary expenditures include expenditures on health, education, recreation and savings.
Health: Expenditure on health should be considered as special and some amount of saving should be set aside for this purpose.
Health expenditure includes doctor’s fees, medicines, hospitals and other charges such as nursing charges, diet room maintenance etc. Money spent on sports, yoga, karate, body line exercises and other physical activities.
Education: School and college fees, capitation fees, stationary, books, transport, excursion, hostel charges etc are included in expenditure on education.
Recreation: Recreation has become necessary for people in modern world as they face more stress. They need to go out for entertainment like film watching circus, attending parties, visiting bird sanctuaries, fish aquarium etc. They have to spend money on all these recreational facilities. The family budget has to provide for all these recreations.
Savings: Savings have to be made out of the regular money income such as savings needed for future needs, social and financial security. Therefore budgets should provide for savings like bonds, deposits, insurance, postal savings etc.
Tertiary Expenditures
Tertiary expenditure includes personnel oriented expenses such as night reading books, shoes, coffee, and other remaining family living expenses.
Limitations of Family Budget
Making family budget is useful and important in the management of money and meeting the family needs and requirements. It helps in providing savings for meeting future needs and requirements. It helps in avoiding wasteful expenditure and personal stress and tensions.
However there are also some limitations associated with the family budgets even though they are very thoughtfully conceived.
Some of the following limitations of budgets are mentioned here.

1. A budget cannot ensure adequate income. It cannot make inadequate income adequate. It can help in avoiding non essential items when the family has limited funds.
2. Selection of a product wisely in the market is not made possible by the budget for an individual. It can only direct the individual in spending income on particular items.
3. It is difficult to master the art of budgeting. This is possible only through frequent budget practices. Initially budget making is a tedious process.
4. Budget may lead to discontent among members of a family with limited income since expenditure on some items is reduced to match the limited income. Some pleasure of individual members may have to be sacrificed.