Factors that influence family budgeting and expenditure
There are different factors which influence the family budgeting system and most of them are:
1. The family income: The budget is made on the net income.
2. Family needs: These determine the specific goods and services which will be budgeted for.
3. Family size: This is the number of people in the family. It includes their ages and sexes, it influences a family budget.
4. Family value: Value is the worth placed in something. Every family has a set of values. These values influence the choice which the family makes among alternatives.
For example a family that values education more than luxury, might spend money on education rather than on cars.
5. The season of the year: Some foodstuffs are plenty at certain seasons of the year and scarce at others. Food is cheaper at period is plenty but expensive when it is scarce.
This fact therefore determines the amount of family income to be spent on food. If thus influences family budget.
6. This is the area where a family lives. It will influence family budget in different ways. For instance it will affect the distance to school, place of work and therefore amount of money spent on transport.
It will also determine the types of food available to the family to budget for and purchase.
7. Inflation: This is continuous upward movement in general price level. When this occurs the prices of goods and services become high. The family has to budget more money for each item.