“Budgeting is the first step in money management.”Factors affecting family budget.

Question

“Budgeting is the first step in money management.”In this context explain the Factors affecting family budget.

Answer 1

Factors affecting family budget: 

1. Composition of the family – the number of members along with earning members affects the family budget. 

2. Family life cycle – at which stage is the family – beginning, expanding or contracting family. 

3. Economic status – expenditure varies with the standard of living that the family has to maintain. 

4. Religious ceremonies and celebrations – the amount of entertainment done by the family and observing traditional values, bring forth a number of ceremonies to be performed. 

5. Place of stay – if the family lives in a small town, rates are comparatively low, overall expenses on necessities are less and so the family can spend on luxuries. The distance of place of work from home also affects the family budget.