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Catering, Home economics, Home management

HOUSEHOLD BUDGET

Budgeting is the process of preparing a budget. Household budget is a plan for future expenditures of a given household. Good budgeting leads to wise management or use of a family income. Poor budgeting leads to wasteful expenditure of income.

BUDGETING TERMS

  • Family Income: The incomes of a family include the money and other economic resources available to the family for meeting their needs.
  • Money Income: is the total amount of money which the family has at a given period. It is the purchasing or buying power of a family at a given period.
  • Gross Income: is the total amount of money from a person’s income.
  • Net Income: is the amount of money that remains after deductions, such as tax, water rate and levies.
  • Budget: is the plan of how to spend the family income. The budget is normally prepared based on the net income.
  • Expenditure: is the amount of money spent on the goods and services which the family needs.

SOURCES OF FAMILY INCOME

There are sources from which families get their income. They include: salaries, wages, gifts, assets or investment that yield interests; such as rents, dividends on shares e.t.c.

IMPORTANCE OF FAMILY BUDGET

  • It helps the family to make wise decision about expenditure
  • It helps the family to spend money on what they really need
  • It prevents wasteful spending of family money
  • It helps the family to see how they spend their money
  • It helps to prevent impulsive buying
  • It helps to train children on the use of money.

FACTORS TO CONSIDER IN PREPARING A BUDGET

  • The family income
  • Family needs
  • Family size
  • Family value
  • The season of the year
  • Locality

PROCEDURES IN PREPRING A FAMILY BUDGET

  • List all the goods and services needed by the family throughout the proposed budget period.
  • Place them in order of priority or importance to the family
  • Make an estimate of the cost of each need
  • Estimate the total expected income for the planned period
  • Bring expected income and expenditure into balance. Expenditure should not be more than income.
  • Review the budget to ensure that it is likely to work.

EXAMPLE OF A BUDGET FOR THE FAMILY

The following is an example of a budget for an imaginary family of three persons that has monthly income of Ten Thousand naira. (# 10,000.00)

FAMILY NEEDS % OF INCOME BUDGETED AMOUNT             #                    K
Food 30% 3000             00
Housing (rent and maintenance) 23% 2300             00
Clothing 10% 1000             00
Health 10% 1000             00
Transportation 6% 600               00
Education 13% 1300             00
Entertainment and recreation 2% 200               00
Personal allowances 3% 300               00
Savings and insurance 3% 300               00
Total 100% 10,000          00

 

Assignment: prepare a family budget for a family of six that earns #30,000.00 every month.

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See also

SCIENTIFIC STUDY OF FOOD

HEALTHY FEEDING AND EATING PRACTICES

GOOD POSTURE AND EXERCISE

THE TEETH, HANDS AND FEET

STRUCTURE OF THE SKIN

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