A common sense view of the much-debated budget question
Planning the Family Budget
A common sense view of the much-debated budget question
WHEN I was married I could cook, make my own clothes, and was what the world in general calls an efficient housekeeper; but somehow, the financial side of the business worried me. I always managed to have a small credit balance at the end of the month, for the simple reason that during the last few days I would sit down, hold my head in my hands, and figure out the cheapest cakes to bake, and the cheapest cuts of meat to buy. I can still after ten years of married life produce my account books showing my first monthly saving to be $0.02, while I saved the tremendous sum of $0.29 the second month
I have since come to the conclusion that it is not as necessary to show, that housekeeping has in it elements of business, as to make housekeepers themselves recognize its business character and apply to it ordinary business principles. When we look at the fact that over eighty per cent, of the average income passes through the hands of the housekeeper, it behooves us to spend wisely.
One evening my husband and I talked the matter over from every angle and decided that it was his duty to increase the income and mine to diminish the expenditure. Next we planned a budget, and while it was far from ideal, we ar
least found out where the money was drifting, and were able to divert it into what seemed to us the proper channels.
I am going to show you later on how we divided our income; but I want to say just here that you cannot take any other person’s budget unless you have the same sized family, the same salary and live in the same locality where you will find the same prices and difficulties with which the other has to contend. You can easily see, however, that there is much in a well-planned budget that can be adapted to your needs.
Useless Petty Economies
ATERY often I was so tired because of ’ some petty little economy that I could not be bright and cheerful when my husband came home in the evening. Now I just sit down and ask myself how much I am going to save by the extra work entailed in rendering down a lump of suet or fussing over a pot of soup. Some times it is really worth the effort expended but often it is not.
By this time I was taking a keen interest in where the money was going, and when we moved into a house was surprised to find that our expenses rose very considerably and our previous budget was utterly useless. The rent, of course, was lower than that of the apartment. I was able to buy in larger quantities, thereby saving a little, but we now had to buy coal, and as we had a young son who added to the work, I had to employ a woman one day of every week to wash and iron.
Of course, I often ordered over the telephone, and while there is no doubt that it is not as economical, if I were busy, I found I saved more by the work done during the time it would have taken to dress baby and myself, walk to the store and make my purchases in person.
It is hard to be a common-sense buyer all the time, and I very much doubt if the person ever lived who was one. Often, however, a lot of money is spent on dainty food, lobster, olives and such, which appeal to the palate but really have no nutritive value. I have a little six years old cousin who says: “Mummy, I don’t wish for a slice of bread and butter, I need it.” He is quite able to distinguish the difference between ‘needs’ and ‘desires’. Of course if one has unlimited means, it alters the situation but these fortunate ones are in the minority. Sometimes I think they are the unfortunate ones, because they do not really get the enjoyment out of things as much as we, who have to plan and save for our pleasures.
COON our new budget was running ^ satisfactorily and from time to time we made small investments. I cannot over emphasize the importance of building up an income from investments to supplement the salary, because whether the wage earner is ill or not, the cheque comes in just the same.
A year later a calamity befell us—our charwoman injured her back and was unable to continue her work. I could not find another woman who just suited and for several weeks we had a terribly trying time. Then we decided to put some of our savings into labor saving machinery instead of paying out $2.50 each week for help.
Our first investment was an electric washer, and later on we bought a vacuum cleaner. It really is a great comfort to me, and I am more than ever a firm believer in economizing energy by spending money, and not in economizing money by spending energy. Our machine paid for itself in a little over a year and a half, and as we bought a good one I expect to enjoy it for ten y^ars or more.
If it is at all possible, I think it is better when buying anything of this type to pay cash; but in any case do try to pay at least half the money down and the balance
as soon as you can. Interest mounts up very rapidly.
Many people say to me: “I know where the money goes so I don’t bother with accounts.” Because you do not keep accounts does not say your money is wasted, but is parallel to the case of the city waterworks inspector who can tell from the service pipe outside your home, that there is a leakage; but must look into every room in order to find out which tap needs the new washer.
I still find it very interesting, when there is a question of the rise or drop of certain staple articles, to go to my old account books, and look up the price of flour in October, 1918, and again in the same month of 1926. My husband loves to tease me by telling my friends that once when a fire next door seemed likely to spread, I took my child in one hand, my account books in the other and stood on the top step ready to fly should the occasion demand it.
Of course charge accounts are in themselves a form of bookkeeping, but I found it a very expensive way. With whole or part cash purchases, accounts are an absolute necessity. I find that food and clothing are often overrated and think that from sixteen per cent, to twenty per cent, of an average income should be devoted to rent. The actual food consumed should not exceed forty cents per person per day though this does not allow for the fuel used in the preparation.
When my husband’s salary was increased we found little or no difference in the amount of money spent for food. This may sound ridiculous, but we never did believe in economizing on plain nourishing food, or just because we had a little more money, that it was necessary to live on all kinds of expensive out-ofseason luxuries.
I prefer a simple system of accounting but it must he clear, adapted to the needs of the record required, and entered up promptly. I did not find the envelope system very satisfactory but have many friends who like it. They merely place in an envelope marked ‘Food’ or ‘Clothing’ as the case may be, the amount of money they wish devoted to that need. Then when the grocer boy delivers their order, they simply go to the envelope marked food and pay for it. I objected to this form of accounting because in order to get the correct change I very often had to borrow from another envelope.
Below is the journal that I like best of all. As you see it is entered up and balanced every day.
Daily 1926 Cr Dr. Total 11th forward ......... $57.15 12th To laundry ....... $0.75 12th To 3 d’z. eggs @ .40 1.20 12 th To 2 lbs. sausage @ .28 ............ .56 $2.51 13 th To load hardwood @ $5.00 ......... 5.00 13th To dry cleaners (gray suits) $2.50 $57.15 S10.01 $10.01 $10.01 Balance hand
In planning our budget we decided to have nine distinct headings.
Rent—Calls for no explanation.
Clothing—All wearing apparel and personal expenses.
Food—Groceries, meat, fish, milk, etc.
Operating Expenses—Light, gas heating, wages, etc.
Education—Lectures, books, magazines, music, school fees.
Recreation—Clubs, vacation, theatre.
Church and Charity-—Explains itself.
Savings—Payments on house, insurance, investments.
Incidentals — Doctor’s and dentist’s bills, etc.
UNDER recreation in our case we include the expenses of running a small car. It fortunately has a mileage of twenty-eight to the gallon, and while not
exactly an economy, we derive great pleasure from it. As we have two children the four of us benefit by getting out into the country on the hot sultry evenings.
My husband and I decided that an incidental column was most necessary. There is always some expense, that has no real place under any of the other headings. The money is always available in case of illness or any other sudden emergency.
Below I am showing how we found it best to budget our salary. I discovered that on a salary of $1,500 per year, the percentage for food and clothing had to be higher, and the operating expenses were lower, as I simply could not' afford to employ outside labor.
All Hinges on Rent
RENT fixes every other item in the budget and in many communities rents are fixed. When we were living in Montreal where rents are very high, we subtracted the rent and budgeted the remainder of the salary. Food and clothing and operating expenses had to be lessened in order to meet the increased rent.
We buy coal only twice a year but distribute the cost over the entire year by setting aside the allotted amount for operating expenses, whether it is used one month or not. In this same way we find that taxes are met without any undue anxiety on our part. Regarding the clothing, I may say that my husband and I divide the allowance and what we do with it concerns only the individual. If I want to spend mine on movies, I just do so, and my husband also spends his in just whatever way he pleases.
Plan Your Own
IN conclusion I would like to offer a suggestion. My budgets will serve as a guide, but you will find it very interesting, and much more beneficial to plan your own. If you have kept accounts in the past, get out your books and estimate your expenses in dollars and cents. Then make a table such as I describe below, showing how much you think should be spent for each item. Your needs will differ from mine, or those of your friends, and by using your own common sense you will compile a far better budget than I could devise for you.
I found it very helpful to tabulate the expenditures under their several headings by months. This can be done easily by ruling a page both horizontally and vertically, putting Food, Rent, and so on at the head of the vertical columns and assigning each of the horizontal columns to a month.
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