EPP 6 LESSON 3.2: ALLOCATING BUDGET
HOUSEHOLD OPERATIONS
FAMILY FINANCE - It refers to the management of
income and expenses that affects the family.
INCOME – Monetary payment received by family
members for the goods and services rendered.
EXPENSES – Money paid by the family for good and
services that they get.
10 COMPONENTS OF A FAMILY BUDGET
1. FOOD
 Gets the biggest share
 The kind of food served in the family will depend
on the condition of the family members. A
special diet will require extra expense.
 It is important that meals are planned so that you
can project how much money you are going to
set aside on groceries, takeout food, or dining
out.
2. CLOTHING
 Item that you do not need to buy every day.
 Clothing needs differ depends on the physical
growth, status, and development rate of family
members, and occasion or engagements
attended
3. SHELTER
 Some allocate payment for rent.
 A fixed monthly budget must be allocated.
 If you own the house, allocate for amortization.
 Allocate also for home repair, home
improvement, and real estate tax.
4. EDUCATION
 This can be taken from savings or emergency
fund.
 This includes expenses for children’s allowances,
tuition, uniform, books, and other school
supplies.
5. UTILITIES
 This is paid on monthly basis.
 It indicates electricity, water, telephone, and
home cable bills.
 You can get the average of all these bills so you
can allocate a fixed amount monthly.
6.
 This is allocated for your parent who stays at
home or your house helper.
 This is used when your parent or helper goes to
the market or grocery to buy supplies and food.
 It also used for home repairs and improvement.
7. MEDICAL AND DENTAL CARE
 This is expenses for medical and dental
appointment and the medicines needed by the
family.
 This also includes vaccinations if there is a baby in
the family.
8. REST AND RECREATION
 This refers to activities that provide relaxation
and entertainment for the family.
 This can also includes pursuing hobbies and
interests, town trips, and vacations.
9. SAVINGS
 This is separate amount that is set aside for
emergency purposes or something to be bought
in the future.
 This must be part of the operational budget not
to be taken from what is left on the budget after
deducting other components.
10. SOCIAL AND MORAL OBLIGATIONS
 This is for the families that attend personal
events like birthdays, anniversaries, weddings,
etc.
 There are families that have their own outreach
activity like feeding program, orphanage, or
home for the aged, or environmental
conservation projects.
EFFICIENT MANAGEMENT of FAMILY RESOURCES
 All members of the family must feel responsible
for managing the family resources.
 Good management of family resources always
include provision for savings. A definite amount
is taken from the income for this purpose. This
should be saved regularly.
 Savings can also be increased by investing. It is
risky so it needs careful planning and studying to
avoid scam.
 - Example: Transportation, water bills, electricity,
house rental or amortization, tax, SSS, Pag0ibig
Here are the things that you can do:
premiums, insurances, loans, etc.
1. Identify the goals of the family.

2. Make a plan to help lead you in achieving your family

FLEXIBLE EXPENSES – come irregularly or paid in varying
goal.
amounts
3. Know how much money is included to achieve your
- Example: Food, medical, and dental service,
goal
donations, gifts, recreation and entertainment,
4. Make a final decision on what to prioritize. social and moral obligation, etc.

5. Allocate the money for all the items.

6. Assess the output of the plan undertaken with budget

great benefits when the whole family is involved in

managing the resources

 It also trains younger family members to be

hardworking and disciplined in caring for
growing their own resources.
 It enhances the family’s will to succeed against all
odds since the members are all trying their best
to achieve their goal

PRIORITIZING NEEDS OVER WANTS

You should be extra careful when it comes to money

matter. Limit your expenses within your budget to avoid
shortage or deficits.

1. Never buy on credit.

2. Always buy the right size.

3. Never buy items that are not in the shopping list.

4. Make sure you are full when you go shopping.

5. Refrain from frequent shopping.

PREPARING THE FAMILY BUDGET

SAMPLE PERCENTAGE ALLOCATION

FIXED EXPENSES – paid regularly on a more or less same

amount