How the Family Budget Helps to Establish a Standard of Living
CAN WE AFFORD IT?
How the Family Budget Helps to Establish a Standard of Living
I ONCE knew an unworldly-minded man who built himself a house. The desire of his heart was to have a spacious entrance-hall, one that would sound a key-note of hospitality and give an air of spaciousness and taste. When he got to planning the house, he found that he would have to build a large living-room to justify this much-desired hall. He had never a thought of a library until he saw that one was needed across the hall to balance the living-room. The library was added. The dining-room and kitchen were made to correspond. Grounddoor additions involved rooms over them. Lastly, this gentleman of taste, hut not of forethought, discovered that these spacious dimensions required inlaid floors and other expensive furnishings. These he ordered, and instead of spending six thousand dollars, as he had intended doing, he spent twenty thousand, and w'ent bankrupt before he had passed a night in his new home. This is not a parable. It is the true story of a real man who spent his money before making careful and well-proportioned plans.
I know a lovely middle-aged couple who own and occupy one of the finest farms in their county. These people have more than enough for comfort, but their early days were fraught with difficulty. The saving habit so necessary to their early life still controls them. Amid plenty, they still anxiously count every penny. Pure-bred chickens are a hobby with the man. From them he derives not profit, but legitimate pleasure. For several years, despite her husband’s advice that a new one be procured, the wife had used an old, leaking, inadequate refrigerator. One spring she told her niece that she was planning to have a really good refrigerator put in, but at the next visit the niece found the old one still doing duty. She knew there was plenty of money, she knew how exasperating the old ice-box had been, and she was cui;ious to learn why the new one had failed to appear. When asked about it, the wife pointed to some fine Leghorn hens, remarking, “Samuel went off to a poultry show last winter and paid seventeen dollars for three chickens, so I thought we couldn’t afford a new refrigerator.” Spending in this family was. to say the least, non-co-operative. TWO little girls of ten and twelve years returned from school one day and ran hopefully to their mother to ask permission to buy tickets to a travel-lecture to which their class was
HENRIETTA S NI IT H
going. The tickets were one dollar each, and many of their little friends already had them. It happened that the arrival of the little girls found their mother much perplexed over the cost of a dinner and card party she was planning. She was trying to provide too many courses for the funds in hand, so she felt very poor just then, and told her girls that she was very sorry, but she could not afford to buy the tickets for them. She hoped they wouldn’t mind very much. Ten days later, when her daughters saw the company dinner, it is just possible that they may have questioned their mother’s sincerity in telling them she could not afford to buy the tickets for which they had asked. These and many similar cases have their roots in one common evil, the lack of a standard of living. There are two ways of spending household funds; to use the money as long as it lasts for the needs as they appear, or to make each expenditure fit into a general scheme that aims to adjust family needs to family income. In each case which I have cited a standard of living and the application of business principles would have gone far to correct the mistakes. When the successful man goes into business, he counts his capital and studies in detail the needs of the various departments of the business, the success of which depends very much indeed upon the way he co-ordinates these departments. He is guided by certain business principles and by information made available through an adequate system of cost-keeping.. Competition forces him to consider all the questions related to his business, with bankruptcy as the probable alternative. THERE being no competition in homemaking, the woman can commit fearful financial errors and yet keep right on — unless, perchance, she gets to the divorce court. There should be no very considerable difference in the business methods employed by the man who earns and the woman who spends. To quote Ellen H. Richards: “The reason a young man fears to marry is not because of the present cost of a house but because he cannot estimate the future cost of running it. He has no rule to go by. In most newly-established homes there is no governing principle at the foundation, to which both man and wife are committed and for which both arc willing to make sacrifices.” Notice that she speaks of a “governing principle at the foundation, to which both the husband and wife are committed and for which both are willing to make sacrifices.” This governing principle is the standard of living. Physical comfort has its honorable place in
a home, but it should not be allowed to crowd out mental health and spiritual welfare. Operating a home may seem simple in comparison with operating a factory, but those engaged in home-making know that it is a complicated operation, made up of various activities, all of which must be carefully correlated if a happy home is to result. Is there anything that would be more nearly a “first aid” to a perfectly healthy family life than to establish a sort of Round Table or conference? This conference should be held regularly and be used for the solution of family-life problems. What directors’ meetings or managers’ conferences are to the welfare of a corporation, the family conference should be to the home life. In it the standard of living should be formulated and encouraged. Questions relating to every department of the home—the ideals of the family, the duties of the family to society, the financial assets and liabilities. should be all discussed and determined. A satisfactory system of spending is greatly needed by the modern American household. Therefore budget-making would be one of the chief tasks of the Round Table. If one works out the best possible budget for his family, he goes far toward making possible our ideals of a wholesome family life. The ideal home can approach its standards only when the details of living are harmonized and related. JT is very easy even for a well-intentioned person to fall into the habit of spending independently the money which should be used to promote the happiness of the whole family. If I spend a disproportionate amount for expensive bulbs, or choice perennials, or new clothes, you may, from necessity, be spending too little on your individual interests. But let us draw our chairs close together, and in a cozy evening hour let us discuss our needs and our desires. If there is not money enough to do all we would like to do, let us compromise, let us endeavor to spend for each thing only in proportion to our income, and let us see that the amounts necessary for the different departments of household expenditure fit one another. For the motto of our Round Table should be, “The Good of All." There is no place in the home for disproportionate gratification of the individual. After free discussion, many mistakes, and much experimenting, a standard of living may, in most families, be approximated, though from time to time
kanges will be needed. At this point íe home-makers need to summon all iieir resolution and determination. |hey must drive out a certain little imp J'ho will sit at the Round Table, making lis worthless but powerful appeal—the ittle imp, “What-Your-Neighbors-Do.” (íe will be there to influence them; will, inless the family is watchful and resolute, unfortunately influence many Hecisions. He will lead them down the road to debt, point the way to various expenditures which bring no adequate return, interfere in a hundred ways with the peace and happiness of family life. If you want your home to be your own and not a reflection of a neighbor’s, eject this imp and bar the door on him.
A genex-al scheme for household expenditures is a sort of bar of justice. The judge is The-Bounds-of-Your-Circumstanees. Each plea for an unexpected expenditure must be tried before this court, and if it does not comply with family law, it may be rejected. If the money is in hand, it will often seem justifiable to buy, but to make sure that it would not be better policy to buy something else, the general scheme should be consulted. If one per cent, is taken from one department of expenditure and added to some other department, a change takes place. Does the change help toward the best ideals of family life? That is the question to be decided.
'THERE are many excellent plans and A systems of budget-making for the apportionment of household funds. I shall speak here of only one, that outlined in a little book entitled “The Cost of Living,” written more than a decade ago by Éllen H. Richards. I have chosen this book, although it is now somewhat out-of-date, because I have observed its usefulness to the family of a young professional man. This family, consisting of husband and wife and two young children, lived in an Eastern city and spent fifteen hundred dollars a year. With the prices then current, Mrs. Richards’ suggestions proved to be a great aid. The coxxple had set up housekeeping a few' years before with less money than they xxeeded to supply their indefinite wants. Every expenditure was settled by a kind of guess-work process, the results of which were unsatisfactory. It was too much like the housebuilding operation of the man mentioned at the beginning of this article.
At this point the great service of Mrs. Richards’ budget was that it indicated for that young couple a ratioixal system of spending. By an application of its principles they managed to spend only three-fourths of their income for food, rent, operating expenses, and clothes. The retxxaining one-fourth was used for less material things, such as insurance and other investments, church, charity, education, books, pictures, periodicals, music and lessons, lectures, membership in societies, vacations, entertainments and athletics.
A danger arises when one gets down to the point of using definite figures, such as Mrs. Richards’ twenty-five per cent, of one thousand to fifteen hundred dollar income for the higher life. Prices have risen since she wrote her book. Besides, no set of figures can be applied by everybody. Fluctuations in pi'ice and varying local conditions affect statistics, but the vital principle remains constant, that money for amusements, education, and investments must be provided whenever possible.
In the last decade price increases in nearly every item that enters into homemaking have made it impossible to follow blindly the old standards. The family that set aside for the higher life one-fourth of the husband’s salary of fifteen hundred dollars could not do so to-day without impairing its efficiency; it would live in a less desirable house and have less to eat and wear. On the other hand, if such items as food, rent, clothes, and operating expenses are not reduced, the amount that may be used in the interests of the higher life will be almost negligible. The price increases and their influence on the budget are approximately as follows :
Mrs. Richards’ Per Cent, of Percentages Increase in Plus Cost Last Decade. Increases.
Operating Expenses 15%
Higher Life 25%
(on new houses)
These increases, if allowed, reduce to 8.25 per cent, the sum that may be used for things not purely material. This, of course, almost wipes out the very thing for which we plead a definite allowance for the higher life. No matter what shoes and eggs cost, granted a treasonable income, we should not cease to strive also for the less material elements of life. These are what lift one above the dead level of mere physical existence and enable a family to grow and develop both as individuals and as a social factor.
IN the family of the young professional man, the difficulty was met in two ways. In the first place, his increasing efficiency resulted in a larger salary; in the second place, by management, economy, and substitution, the normal increase of expenses was kept down. For instance, the food-costs in that household have not incx-eased the forty per cent, which is the statistical average. It is in meats that there has been the greatest increase in price. This family has curtailed its use of meat, having almost entix-ely omitted the higher-priced cuts. Both meat and butter are being partly replaced by peanut-butter and other fats which supply the same nutriment at a considerably reduced cost. Wholesale purchase of groceries is also x'esorted to, with a saving of from ten to fifteen per cent.
Everyone knows how easy it is to spend twenty-five per cent, of any income for the higher life. To spare that sum from the other departments of expenditure, however, requires much | thought axxd a considerable amount of that ingredient of human nature commonly called backbone. When the family income increases, cai’e must be taken that the surplus is not absorbed by the grocer, the baker, the candlestick-maker. The tailor and the landlord stand ever-willing recipients, but let them not have disproportionate amount.
Full gratification in the matter of rent and clothes usually means pinch somewhere, and too often the pinch comes where it is least advisable to have it. No one can afford to regulate his expenditui'e so that his sympathy is dwarfed, his intellectual anti spiritual nature are stifled, er his children go hungry for books and music, though their bodies are clothed in fine linen. This is too often seen where expenditui'e is made without plan and in response to single and unrelated temptations.
THE following true incident indicates that the family budget may be altered to suit local inequalities. The mother of a family had to plan to pay a large dental bill. No additional funds were to be had, so she was obliged to make the regular income suffice. She settled herself comfortably one afternoon, pad and pencil in hand, and studied the problem. She found she could not cut down the already plain though nourishing bill of fare; rent would remain stationary, and service must be had as heretofore. She determined not to reduce her allowance for the higher life except as a last resort, so she attacked the problem of clothes. She wrote on her pad a list of her gowns, wraps, and hats, and opposite each the kind of occasion upon which she could expect to wear it. She then picked out the occasions least plentifully provided for and for these she planned clothes to be made over from dresses and materials already on hand. It is sometimes surprising when you take stock of the clothes you have, how many new things which you thought you needed can be done without. She saved the amount of the dentist’s bill from her clothes account. Another woman might have saved it differently.
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