ACKNOWLEDGEMENT

Contents
INTRODUCTION ...................................................................................................................................... 4
What is a family budget? ................................................................................................................... 4
Objectives of a family budget: ........................................................................................................... 4
MATERIALS REQUIRED/USED AND REQUIRED PREPARATION ............................................................. 5
REASON TO CHOOSE THE SPECIFIC ACTIVITY ........................................................................................ 6
THE PROCESS .......................................................................................................................................... 7
REFLECTIONS ........................................................................................................................................ 13
CONCLUSION ........................................................................................................................................ 14
INTRODUCTION
What is a family budget?
Budgeting is an important economic activity in any society starting
from its smallest unit – the family, to the Central government. A
family budget shows how family income is allocated to be spent on
various items of expenditure like necessities, comforts, luxuries and
other cultural wants.
Objectives of a family budget:
1. Helps decide how family income is to be spent.
2. To help spend money carefully and smartly.
3. Helps estimating costs and making choices among alternate
uses of money.
4. Ensures that one doesn’t overspend.
5. Prepares you to meet emergencies.
6. Identifies and corrects bad spending habits.
7. Saves money for retirement for parents and higher education
for children.
8. Helps one find out the ratio of his income to his expenditure in
a particular time period.
9. Helps in increasing your savings.
MATERIALS REQUIRED/USED AND REQUIRED PREPARATION
1. Income details
2. Tax details
3. Fixed expenses details
4. List of variable expenditure
5. Credit card bills and bank statements for previous months to
track expenditure
6. Segregation of expenditure under appropriate heads.
7. Microsoft Office 2013 (Excel, Word) software

Family Details

1 No. of members in family 3

2 No. of earning members 2
3 No. of children 1
4 No. of vehicles 2
5 No. of mobile phones 3
6 Father's total income 2100000
7 Taxes 606629
8 Father's net income 1493371
9 Mother's total income 1142190
10 Taxes 266998
11 Mother's net income 875192
12 Family total net income 2368563
13 Annual investments 500000
14 Health insurance 100000
Net income after annual investments and
15 insurance 1768563

Family total net income monthly 147380

REASON TO CHOOSE THE SPECIFIC ACTIVITY
A family budget is essential to manage one’s finances. It helps one
spend money wisely on things you ‘must’ have. The basic needs of
human beings are food, clothing and shelter (Roti, kapda aur
makan as they famously say!) which must be met. Once the basic
needs are met, we can think of other things which increase the
comfort of the family. For example, we may like to have more
than one car, but we can manage without it. I felt that our family
was overspending on non-essentials and was not saving enough,
hence I decided to take up this topic, and through the project
increase our family savings.
THE PROCESS
For the purpose of this project, I studied the income and
expenditure pattern of my family over the last few months under
different categories like food, house rent, my education etc. After
studying all the figures, I categorized the expenses as fixed
expenditures which cannot be controlled such as annual savings,
medical insurance, car insurance, school fees etc. that cannot be
controlled, and variable expenditures such as telephone bill, food
and groceries, entertainment, etc. that can be controlled.
I tabulated the expenditure under each category on a monthly
average basis along with its percentage share of overall
expenditures. It was found that the overall savings was working
out to 20%.
In Indian conditions it is recommended that 30% of the income
should go towards savings. This is keeping in mind that there is no
pension or social security schemes for people working in the
private sector.
My first objective was to increase the savings to at least 30%. With
this objective in mind I had a brainstorming session with my family
on the various ways in which we could cut down our expenses and
increase savings. I have listed down the finalized suggestions
below:
1. Transportation: With carpooling, metro option and quick ride
options there is a significant saving in transportation up to 50%.
2. Telephone: On moving to a family plan for mobile, the total
mobile bill is reduced to half.
3. Grocery and general shopping: By following some best practices
we can see a huge saving in expenditure towards grocery and
general shopping.
a. Buy things that are available cheaper online after
comparing prices.
 b.Check for additional cashback offers.
c.Use payment wallets for additional cashback offers.
d.Use free shipping.
e.When shopping for grocery, always go with a list and buy
only items that are required.
f. Buy in bulk.
4. Entertainment expenses: A huge reduction in TV cable charges
is seen by subscribing only to essential channels. Subscribe and
unsubscribe from sports channel based on usage. Use online
apps for newspaper and magazines to save cost and reduce
print material.
5. Energy bills: Cut down energy bills by optimal utilization of
geyser, usage of CFL and LED bulbs, switch of lights, equipment,
and fan when not in use.

With better planning and following the identified best practices

we saw significant reduction in our household expenditure and
could see improved savings of 30%. I created a new budget with
reduced expenditure and increased savings.
Current Expenditure
Family monthly net income 147380

Percentage
Expenditure Category Monthly Expenditure (in Rs.) Contribution %
House EMI+Maintenance 55000 37
Home helpers 2500 2
Vehicle maintenance 5000 3
Transport 15000 10
Food (office+school) 3000 2
Milk, Newspaper, magazine 950 1
Grocery, fruits and vegetables 10000 7
Water and Electricity 2000 1
Education 12500 8
Mobiles and Internet 3500 2
Medicines 1200 1
Entertainment 2500 2
Miscellaneous 4000 3
Savings 30230 21

Current
Monthly Expenditure (in Rs.)
60000 55000
50000
40000 30230
30000
20000 15000 12500
10000
10000 2500 5000 3000 950 2000 3500 1200 2500 4000
0
 Current Expenditure

House EMI+Maintenance
Home helpers
Vehicle maintenance

21% Transport
Food (office+school)
37% Milk, Newspaper, magazine
3% Grocery, fruits and vegetables
2%
1% Water and Electricity
2%
Education
8% Mobiles and Internet
1% 2% Medicines
7% 3%
1%
2% 10% Entertainment
Miscellaneous
Savings
Finalized Budget

Family monthly net income 147380

Monthly Percentage
Expenditure Category Expenditure (in Rs.) Contribution
House EMI+Maintenance 55000 37
Home helpers 2500 2
Vehicle maintenance 5000 3
Transport 7500 5
Food (office+school) 3000 2
Milk,Newspaper, magazine 900 1
Grocery, fruits and vegetables 7000 5
Water and Electricity 1800 1
Education 12500 8
Mobiles and Internet 2000 1
Medicines 1200 1
Entertainment 1200 1
Miscellaneous 3500 2
Savings 44280 30
 Budgeted Monthly Expenditure (in Rs.)
60000 55000

50000 44280

40000

30000

20000
12500
10000 7500 7000
5000
2500 3000
900 1800 2000 1200 1200 3500
0

Family Budget

House EMI+Maintenance
Home helpers
Vehicle maintenance
Transport

30% Food (office+school)

37% Milk,Newspaper, magazine
Grocery, fruits and vegetables
Water and Electricity

2% Education
1%
1%
1% Mobiles and Internet
9% 2%
3% Medicines
1% 5%1%
2% 5% Entertainment
Miscellaneous
Savings
REFLECTIONS
Through this project, I learned a few valuable life lessons which
will help me immensely when I grow up and need to manage my
finances.
It was an amazing experience to understand income, taxes paid,
various expenditure incurred in running our family, various
investments being done by my parents and the savings.
As part of documenting the expenses under various headings, I
learned to use spreadsheets through Microsoft Excel, which by
itself was an exciting learning experience.
The most challenging part of the project was finding ways to
reduce expenses and increase savings. I was able to reduce our
cable TV charges by helping my parents subscribe to the correct
channels and also suggest the right post-paid mobile plan for
them.
CONCLUSION
Nobody wants to remain or be without money, short on cash,
cash-strapped and not able to live well and or get the things we
need, dream about and want.
A family budget is a useful tool in financial planning. In about two
to three months, you can observe a pattern to your expenditure
which will tell you where you need to cut down or how you can
get more out of your money. Similarly, your savings pattern will
help you draw up plans for short term and long term financial
goals, such as a vacation, a new car or education abroad.

Family Total Income ₹ 32,42,190.00

Taxes ₹ 8,73,627.00
Annual Investments ₹ 5,00,000.00
Health Insurances ₹ 1,00,000.00
Net Income ₹ 17,68,563.00
Annual Expenditure ₹ 12,37,200.00
Annual Savings apart from scheduled
investments ₹ 5,31,363.00

Percentage Savings 30%