EPP

Management of the family income – means allocating it to provide for the basic needs of members and for
comfortable living.

Saving is the money set aside by the family for use in times of need. To ensure that some money is
saved, the expenditure must be less than the income. In order to manage within your income, you
need to plan the expenditure. This is known as 'managing income' and means spending wisely so
that all your needs are met

(management – pamamahala)
(budgeting - stimate of income and expenditure for a set period of time.)

Budget - - MOST EFFECTIVE WAY TO HANDLE MONEY

- a list of items that one plans to spend in a given time, given income or amount.
- it is a plan for spending and also plan for saving and spending for the future
Through family budgeting, the members will learn to spend wisely, save regularly, and participate in family
matters more actively with the maximum benefit from the wise use of resources, like time, energy and
resources.
Now, what do you think are the factors that need to be considered when budgeting?
 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.

 Family income - 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.

 Kind of work each family member does - 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.

 Talents and abilities of each member –

 Locality where the family lives - 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.

ASK: Aside from what was mentioned, can you think of other factors that need to be considered when
budgeting? Explain.

Today we determined the relationship between management and budgeting of family income. We also
looked into the factors that need to be considered when budgeting.

Activity1:
Draw the things where family budget is spent.

Recap the lesson:

Identify where the income goes or what the family includes in the budget.
According to Bantigue and Pangilinan (2014), the summary of the principles that should be applied to
make family budgeting a successful and fulfilling task are as follows.
 Know the family’s income
 List your expenses. Know which components are fixed and which are flexible
 Set priorities
 Keep records of expenses
 Allocate an amount of savings.
Ask the class to bring out the drawing. Group class in 4. Let the class identify where or what the family
includes in the budget. Prioritize the items. 10mins