If we live alone, then there are no worries of the budget, but once we live with the family, there are many factors that decide the monthly or yearly budget. Some of them are Income, composition and the size of the family, occupation of the family members, intercity differences, Socio-economic Status of the Family, etc. So let’s take a look at them in detail.
Income of the family
Low-income families have a limited amount of money, and hence they have to spend it on the necessities. It includes food, shelter, and clothing. However, if the income increases, the amount spent on the needs increases proportionally. But at a higher level, needs and wants diminishes and increase saving.
Size of the family
The expense of the family also depends on the number of family member. More the members, more the amount spend for fulfilling needs. And if family members are less the amount will be low. So the expenditure per person decides the budget for the family’s other expenses.
The composition of the family
The structure or composition of the family means a number of male, female, children and old age members in the family. Each stage of life, a person, have different needs as a priority. So these factors also decide the expenditure and budget of all family.
Occupation of members
Budget influenced by the head person who is income earner of the family. They have the responsibility of spending as well as saving money for the home. Some of the jobs have their benefits like educational facilities for children’s, health insurance for the family, travel allowances, etc.
Socio-Economic Status of the family
Socioeconomic status of the family has a noticeable impact on the family budget. The factors that affect it are income, occupation, and education level of the members. Those with notable socio-economic status have more psychological needs and other wants of the family members, like a settlement in a posh locality, higher education, club membership, traveling, etc.
The cost of living also depends on the city you live in. Cities are classified into three categories A B C. It is classified based on the price of essential goods, transportation cost, fuel rent, etc. To live in these type cities, you need more money compared to B or C. So the differences in cities also affect the cost of living and hence they have to set their expenditure as per it.
Family goals mean the security or social status or other than this. Some need financial security while another look for good social status and some other look for something else. Gola depends on the occupation of the family like farmer family goal of accumulation of physical and liquid assets. The business person wants good status in a different way like a good house, modern car, etc. So each family set the budget accordingly.
Nowadays women are also working outside the house. Hence with the additional income, there will be a change in expenditure pattern as there will be additional expense like clothes, services, transportation, etc.