Introduction
Family income is a particular sum of money the whole family gets annually. The salaries, income from deposits and other stable and regular incomes are really important for the family as depending on this information many families plan their costs.
Having the information about the annual income of the family and the list of the obligatory costs, it is possible to calculate the expenses of the family, the cloths they can buy and the number of entertaining places they can visit. Moreover, the food and other unexpected costs should be considered.
However, it seems rather difficult for the family to pay attention to unexpected expenses and to plan them if the family income is too low. Additionally, there are a number of notions which should be considered while discussion of the family budget.
The Consumer Price Index is the notion which should not be avoided as it is the measure which points at the obligatory items people are to be able to buy on the salaries and income they have.
Family and Living Conditions
The situation is the follows. The family consists of a father, a mother, and two kids, a 10 years old girl, and a 4 years old boy. The family lives in the personal house which is not that small as children do not have to share the rooms and have their personal ones.
The family income comprises 15300$ annually, which is about $1275 monthly. The task is to consider the budget of the family, and calculate their costs on the basis of the fact that these people are to live in the house, buy food and clothes and provide other expenses obligatory for an average American citizen.
Consumer basket
The consumer basket is the number of categories which account the items necessary for living. There are about 200 categories which are gathered into eight great groups.
Thus, food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, other goods and services are the items which are to be involved in calculation. Thus, using this pattern as the basis for creating the budget for a family, the following data should be considered.
Things necessary for living
As it has already been mentioned, the family is to be able to buy the items mentioned in the consumer basket. Here is the detailed description for each of the major categories.
Food and beverages are important for the family, however, paying attention to their low income, this category should be presented with breakfast cereal with milk, coffee or tea, chicken (another type of meat may be too costly for the family), wine, and full service meals which are comprised of a great many of different vegetables and other products.
Much attention should be paid to the prices in this category. The cereals may cost about $22.08, different breakfast bars and other snacks about $2-3 per item. This may be enough for a week or two. Milk will cost the family about $90 a week (1 pack costs $30, which is for two-three days).
The process are presented as the sample how the average annual cost of the life was calculated for the family. The prices for most of the products may vary greatly depending on the season and on the place where the products are to be bought.
This category also covers eggs, fruits, fats and oils, alcoholic beverages, meat, etc. The general expenses on this category are to be much greater, however the family cannot allow to pay more than $500 as in this case they will no have an opportunity to pay for other services.
The price means that the family is unable to eat meat every day, eggs and fresh mils appears on the table also rarely. Tasty and expensive fruits, candies, and other sweets are not eaten too often.
Housing is another parameter which is to be paid. Thus, this category covers the expenses on the house. Being the personal house, the family is just to pay the rent and other services such as gas, water, light. The owners’ equivalent rent or bedroom furniture are not considered.
However, the family may spend some extra money of repairing or new objects which are too important. The average cost of the items may be about $200 a month.
Apparel is the third parameter in the family budget. Having too low income, the family cannot allow to buy cloths too often, the one or two items per person a month. If the cloths are not necessary right now, the family has to save this money of more expensive cloths of shoes.
To the point, this category covers men’s, boys’, girl’s and women’s apparel along with footwear. About $100 is the cost for this category.
Transportation is an inevitable part of the family. The family is unable to buy a new vehicle, however, they are to spend money on gasoline and motor vehicle insurance which s not cheap.
The costs depend on the distances the members of the family have to ride every day. Paying attention to the fact that the family is poor and cannot allow to drive too much, their costs on gasoline are minimal.
Medical care is an important aspect. People are to buy prescription drugs and medical supplies if they are ill, physicians’ services are also to be paid along with the hospital services. Paying attention to the fact that the family cannot allow substantial nutrition with all the necessary vitamins and minerals, they are more subjected to getting sick that increases the costs on medication.
However, it is presupposes that people will not be sick each month, the average sum of the medical costs should be about $100 monthly (as all the calculations are based on the average month income considered from the annual one).
Recreation services are important however, the family does not have an opportunity to but toys, have pets and pay for television annually. Therefore, the family has to enjoy the free TV and the toys and entertainments they already have.
However, the family members can allow to have a rest once a year if the cost of the vocation is not too high. The family can allow to spend about $2000 annually.
Education and communication are important as children are to study. However, it increases costs as the family has to spend money of books, copybooks, cloths and other items which are obligatory and cannot be avoided.
Moreover, the computer services are also important as having no opportunity to have the computer at home, school children are to pay for those services to be able to hand in the printed papers and submit the works on time.
Other goods and services such as the services of the haircuts and other expenses are to be considered annually due to the low income of the family these services are not too often used. The extra costs of the family are also to be covered.
The household troubles, funerals, costs devoted to unexpected loss of working opportunities, different presents for birthdays and personal birthdays of the family members are to be considered. It is hard to predict the sum of money on these events as in most cases family with such low income celebrate only too important dates.
Arguments
Thus, having considered the family income and the costs it has to endure, it should be stated that the family is to pay obligatory $900 annually without considering the medical services, education and extra costs which are obligatory.
Conclusion
In conclusion, it should be stated that he family is very poor and cannot allow many particular things. Children are to wear the clothes of their older brothers or sisters, they are unable to attend different entertaining facilities, they cannot eat too tasty and delicious meals as they cannot afford them due to high prices and low income.
The absence of the appropriate nutrition increases the risk of infection that raises the family expenses and puts them at risk of loosing a feeder of the family for a period of the illness.
It is essential for the family to increase the income as the living on 15300$ annually is too hard, children do not get appropriate education, they are limited in many opportunities and as a result they may get worse education than others do.