Family budgeting
Individuals and families should keep track of their expenses and compare it to the money they earn.
Consider the regular expenditure of the Watters family in the table below.
| Expenditure | Amount |
| Mortgage | \(\pounds540\) |
| Gas/electricity | \(\pounds120\) |
| Council tax | \(\pounds150\) |
| TV, phone and broadband | \(\pounds76\) |
| House insurance | \(\pounds65\) |
| Food | \(\pounds460\) |
| Petrol | \(\pounds208\) |
| Clothes | \(\pounds80\) |
| Total monthly expenditure | £??? |
| Expenditure | Mortgage |
|---|---|
| Amount | \(\pounds540\) |
| Expenditure | Gas/electricity |
|---|---|
| Amount | \(\pounds120\) |
| Expenditure | Council tax |
|---|---|
| Amount | \(\pounds150\) |
| Expenditure | TV, phone and broadband |
|---|---|
| Amount | \(\pounds76\) |
| Expenditure | House insurance |
|---|---|
| Amount | \(\pounds65\) |
| Expenditure | Food |
|---|---|
| Amount | \(\pounds460\) |
| Expenditure | Petrol |
|---|---|
| Amount | \(\pounds208\) |
| Expenditure | Clothes |
|---|---|
| Amount | \(\pounds80\) |
| Expenditure | Total monthly expenditure |
|---|---|
| Amount | £??? |
The total monthly household income for the Watters family is \(\pounds2530\).
Question
Can they afford to save \(\pounds483\) per month to cover the cost of their planned holiday?
Total monthly expenditure \(= \pounds540 + \pounds120 + \pounds150 + \pounds76 + \pounds65 + \pounds460 + \pounds208 + \pounds80\)
Total monthly expenditure \(= \pounds1699\)
Disposable income = monthly income – monthly expenditure
\(\pounds2530 - \pounds1699 = \pounds831\)
The Watters family can afford to save for their holiday. Their disposable income exceeds the amount they need to save for their planned holiday.
