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Prepare a Family Budget

INTRODUCTION:

A budget is a Monetary strategy for an outlined period, often one year. It uses information about the income of the family to prepare a family budget. Firms, governments, Individuals, and other organizations use it to the precise strategic planning of activities or events in measurable terms. It should also include planned sales volume and revenue, resource quantity, expenses, assets, liabilities, and cash flow.

A budget is that the sum of cash allocated for a specific purpose and, therefore, the summary of intended expenditures alongside proposals for a way to satisfy them. It’s going to include a budget surplus, providing finance to be used at a later time, or a deficit during which expenses exceed income.

AIMS AND OBJECTIVES:

This Project aims to Prepare a Family Budget.

There are essential objectives for this Project.  They are given below.

Objectives:

  •  To understand what is a budget
  •  To know the types of budget
  •  To understand the family budget
  •  To see the method to prepare a family budget
  •  To ascertain any doubts regarding family budget
  •  To understand various aspects of a family’s financial planning.

METHOD AND METHODOLOGY:

The method used to gather the required information on the Project is an internet survey method that falls under the secondary data collection method. The Internet has extensive knowledge on this subject. It has a vast collection of data on Family budget. The survey for this Project has unveiled information that is covered within major few points. They are listed below and explained in a detailed report of the Project.

  • What is the budget?
  • Types of Budget
  • What is the family Budget?
  • How to prepare a family budget
  • Benefits of the family budget

DETAIL REPORT OF PROJECT:

  • What is the budget?

, Prepare a Family Budget, HSC Projects, HSC Projects

A budget is an estimation of revenue and expenses over a specified future period of your time and is typically compiled and re-evaluated periodically. Budgets are often made for an individual, a family, a bunch of individuals, a business, a government, a country, a multinational organization, or only about anything that creates and spends money. At companies and organizations, a budget is in house tool employed by management and is usually not required for reporting by external parties. A budget is a microeconomics concept that shows the trade-off made when one good is exchanged for an additional.

  • Types of Budget

Sales Budget:

A sales budget is an evaluation of the expected overall sales revenue and selling expenses of the firm. It’s mentioned as a nerve center or backbone of the enterprise. It is the start line on which other budgets are also based. It is forecasting sales for the quantity both in quantity and value. It shows what product is getting to be sold, in what numbers, and at what prices.

Production budget:

The production budget is prepared for the concept of the sales budget. But it also takes into account the stock levels required to be maintained. It contains the manufacturing programs of the enterprise. It helps anticipate the worth of production.

The nature of the production budget will differ from business to business. For analytical purposes, the total budget should be divided into production per commodity per month, looking into the evaluation of the likely quantity of demand. It is the responsibility of the production department to manage its output according to the sales forecast.

Financial budget:

This budget shows the necessity of capital for both the long-term and short-term needs of the enterprise at various points of sometime in the future. Its objective is to form the sure regular supply of adequate funds at the right time. A great neighborhood of the financial budget is that the cash budget.

Overheads budget:

It involves the evaluation costs of indirect goods, indirect worker, and incidental factory expenses needed during the budget course for the fulfillment of budgeted production goals. In other words, an estimate of factory overheads, distribution overheads, and administrative overheads are known because of the overheads budget. The value budget contains a forecast of the capital investment

Personnel budget:

It lays down the labor demands of all divisions for the budget course. It shows workforce demands in terms of work hours, cost, and grade of labor. It aids the personnel managers in catering expected number of workers to the divisions either by transfers or by new appointments.

Master budget:

The Institute of Cost and Management Accountants, England defines the master budget because the summary budget is incorporating all the functional budgets, which is finally approved, adopted, and applied. Thus, the master budget is prepared by consolidating departmental or operational budgets.

, Prepare a Family Budget, HSC Projects, HSC Projects

  • What is the family Budget?

A family budget can be defined as a finance design that assigns prospect income in the direction of expenses, savings, and debt repayment. Past spending and private debt are considered when creating an individual budget. There are several methods and tools available for creating, using, and adjusting a private budget. For instance, jobs are an income source, while bills and rent payments are expenses. A 3rd category aside from income and costs could also be assets like property, investments, or other savings or value representing a possible reserve for funds just in case of budget shortfalls.

There are many informational sites and software available to be used in personal and family problems. The standard of living of individuals is reflected in their family budgets. A family budget is a report which presents how family income is consumed on different components of expenditure. It shows the distribution of the family income over the assorted items of expenditure.

, Prepare a Family Budget, HSC Projects, HSC Projects

  • How to prepare a family budget

  1. Determine a Savings Goal
  2. Establish Your Income
  3. List Your Fixed Expenses
  4. List Your Variable Expenses
  5. Calculate Surplus Amount
  6. Readjust Variable Expenses
  7. Strategically Plan Spending
  8. Supervise Your Budget
  9. Audit at the End of the Month

For Example, A family earns 1000 rs. A month. It should be divided into portions, as given below in the table.

ITEMSEXPENDITURE (rs.)PERCENTAGE
FOOD60060%
FUEL606%
CLOTHING10010%
HOUSE RENT808%
LIGHTING202%
CHILDREN’S EDUCATION404%
MEDICAL AID101.0%
Traveling101.0%
RELIGIOUS AND SOCIAL CEREMONY202%
ENTERTAINMENT AND LUXURIES202%
MISCELLANEOUS404%
TOTAL1000100%

  • Benefits of the family budget

  1. It provides you control over your Finances.
  2. Keeps you focused on your Financial Targets.
  3. It makes you aware of what’s happening together with your money.
  4. It helps you systematize your spending and savings.
  5. It makes you aware in advance how your money will work for you.
  6. It allows you to save the amplitude of money for expected and unexpected costs.
  7. Authorizes you to speak together with your partner about money.
  8. It gives you an early cautioning for potential financial obstacles.
  9. It helps you identify how much debt you can take on.
  10. It gives you a supply of extra cash.

ANALYSIS OF DATA:

After analyzing the gathered data,

To the householder, the study of the family budget is beneficial. He will be ready to determine from the budget before him whether his income has been adequately distributed among the assorted items of expenditure and also whether he has been prepared to balance his budget or not. If the householder is to derive maximum satisfaction from his limited income, then mapping out of expendi­ture beforehand is necessary.

To the economist, the legislator, and also the social reformer, the worth of the study of family budgets is undoubtedly very great. They’re ready to form a concept of the quality of living of the people and also the measure of economic welfare, which is enjoyed by them. They’re deeply curious about the economic well-being of the people, which considerably depends on the way the income is spent.

CONCLUSION:

To successfully conclude my findings,

The study of family budgets is of great use from the economic point of view, that’s why many financial organizations devote special attention to the study of family budgets. Family budgets are a mirror of the consumption of the nation. On use depends the quality of living, and therefore the standard of living determines economic efficiency, which in turn results in economic prosperity.

A substantial percentage of the little incomes get into the purchase of the bare necessaries of life, whereas people with large incomes spend a small percentage of their income on such things. Within the case of luxuries, the fact is kind of the alternative.

DISCUSSION:

The discussion with my guidance counselor on this Project, it is revealed:

A man may have a considerable income, but if it’s not spent rationally, he might not be ready to have a maximum advantage from it. If people waste most of their income on drinks and other harmful sorts of consumption, then it is a waste of money. Another great use of a family budget is that they help in determining the wages of labor and other expenses of family members.

SUGGESTION:

After discussing this Project with friends and peers, they have individual opinions and recommendations. They are given below:

There should be a seminar in high schools, teaching practically about the personal budget.

There should be a news article on various new ways of building a personal budget or family budget.

ACKNOWLEDGMENT:

My profound gratitude to all the faculty members of the Department, for their timely assistance and encouragement throughout my research work.

I duly acknowledge the encouragement and support from the research scholars in the Department, and all my colleagues and friends.

It gives me immense pleasure to take the opportunity to all the people who are directly or indirectly involved in the completion of my project based on

With deep reverence, I offer my deepest gratitude _____, without whom this project could not have been fulfilled.

Lastly, I thank Almighty, my parents, family members, friends, and teachers for their constant encouragement and support, without which this project would not be possible.

Name of School/College

 

BIBLIOGRAPHY / REFERENCE:

https://www.investopedia.com/terms/b/budget.asp

https://en.wikipedia.org/wiki/Budget#Personal_or_family

https://www.thebalance.com/set-up-a-family-budget-3129262

http://www.economicsdiscussion.net/articles/family-budgets-meaning-importance-and-engles-law-of-family-expenditure/1457

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