Republic of the Philippines

DEPARTMENT OF EDUCATION
Cordillera Administrative Region
Schools Division Office of Benguet
Tuba District
CAMP 6 ELEMENTARY SCHOOL
Camp 6, Camp 4, Tuba Benguet

HOME ECONOMICS
ALLOCATION OF FAMILY INCOME AND BUDGET
FAMILY FINANCE = refers to the management of income and expenses that affects the
family.
INCOME = refers to the monetary payment received by family members for the goods and
services rendered. Usually, income of the family comes from employment and/or profit from a
business or commission like in selling real estate or selling beauty products.
EXPENSE = refers to the money paid by the family for goods and services that they get.

COMPONENTS OF A FAMILY BUDGET

1. FOOD
This gets the biggest share in the allocation of your family income because we eat
everyday.
It is important that meals are planned so that you can project how much money you are
going to set aside on groceries, takeout food, or dining out.
2. CLOTHING
This is an item that you do not need to buy everyday.
Clothing needs of family members differ from one another depending on the physical
growth, status, and development rate of family members and occasion or engagements
attended.
Your consideration when allocating family income for clothing is on the need to buy
basics because it is really important.
3. SHELTER
= Some families allocate payment for rent of the house or apartment they live in. If this is
the case, a fixed monthly budget should be allocated.
= For those families who are on the process of owning the house, there should be an
allocation for AMORTIZATION (the fixed amount paid to an agency for a period of time
after which the house will be owned).
= Allocation for home repair, improvement, and real estate tax must also be set aside.
4. EDUCATION
= Families should also allocate an amount of their income for education.
 = This can be taken from your savings or emergency fund.
= Since school fees are paid either yearly or on a semestral basis, one can already foresee
how much is needed and be prepared for it.
= This will include expenses for children’s allowances, tuition, uniform, books, and other
school supplies.
5. UTILITIES
= This is paid on a monthly basis.
= It includes electricity, water, telephone, and home cable bills.
6. HOUSEHOLD OPERATIONS
= This is an allocated budget for your parent who stays at home or your helper.
= This is used when your parent or your helper go to the market or grocery to buy
supplies and food.
= This is also used on payment for home repairs and improvement.
7. MEDICAL and DENTAL CARE
= These are expenses for medical and dental appointment and the medicines needed by
the family.
= This also includes vaccinations if there is a baby in the family.
8. REST AND RECREATION
= This refers to activities that provide relaxation and entertainment for the family.
= This also include pursuing hobbies and interests, town trips, and vacations.
9. SAVINGS
= This is a separate amount of money that is set aside for emergency purposes or allotted
for something to be bought in the future.
10.SOCIAL AND MORAL OBLIGATIONS
= Allocating budget for the family who attends personal events like birthdays,
anniversaries, weddings, and among others.
= There are families who have outreach activity like feeding program in depressed areas,
visiting an orphanage or home for the aged.
= Other families prefer environmental conservation projects.
= Financial resources are needed to support these endeavors.

EFFICIENT MANAGEMENT OF FAMILY RESOURCES

1. Identify the goals of the family. What are your priorities? Is it education? Good health? A
comfortable house?
2. Make a plan to help you lead you in achieving your family goad. Identify items that
should be included in the plan.
3. Know how much money is included to achieve your goal. What other family resources
are available like individual skills, tools and machines, land, etc?
4. Make a final decision on what to prioritize. It should be that the whole family must be
involved in the decision making. Stick to the FIRST THINGS FIRST Policy.
 5. Allocate money for all items.
6. Assess the output of the plan undertaken with the budget.
BENEFITS OF INVOLVING THE WHOLE FAMILY IN MANAGING THEIR OWN
RESOURCES
 It enhances unity and cooperation among family members.
 It trains younger family members to be hardworking and disciplined in caring for or
growing their own resources.
 It enhances the family’s will to succeed against all odds since the members are trying
their best to achieve their goal.
PRIORITIZING NEEDS OVER WANTS
NEEDS – The things that help us survive like food, clothing, and shelter.
WANTS – Those that make our life Comfortable and enjoyable like television, computers,
cellphones, etc.
***NEEDS should be prioritized over WANTS.
1. Never buy on credit. No matter how attempting the offer, do not grab it. Wait until you
have the available cash to buy the item.
2. Always buy the right size. It is a waste of time, money, and energy when you get the
wrong size.
3. Never buy items that are not in your shopping list. You might be enticed to buy items that
are on promo or are on sale. This seems very attractive at first, but only to find out that
you do not need the item later on.
4. Make sure you are full when you go out shopping. A hungry costumer is often tempted to
eat on impulse resulting to buying expensive food.
5. Refrain from frequent shopping. While others make shopping a habit, it might be because
they can afford it. But if you have limited source of income, it might just get you into
financial trouble.
PREPARING THE FAMILY BUDGET
One family’s budget is different from another family’s budget. It may be depending upon the
size of the family, the income of the family members, and the location of their residence.
BUDGET COMPONENTS AND ITS PERCENTAGE ALLOCATION
BUDGET COMPONENT ALLOCATION (%)
FOOD 35%
UTILITIES 17%
SHELTER 10%
EDUCATION 10%
SAVINGS 10%
HOUSEHOLD OPERATIONS 5%
 MEDICAL AND DENTAL 5%
CLOTHING 5%
REST AND RECREATION 3%
***PERCENTAGE DISTRIBUTION may vary. In making family budget, it helps to know the
actual family income. Determine also the fixed and flexible expenses and make a list of
priorities.
FIXED EXPENSES = are expenses that are paid regularly on a more or less the same amount.
= For example: Transportation, water bills, electricity, house rental or
amortization, tax, SSS, Pag-IBIG premiums, insurances, loans etc.
FLEXIBLE EXPENSES = are expenses that come irregularly or paid in varying amount.
= For example: food, medical and dental services, donations, gifts,
recreation
and entertainment, social and moral obligations, etc.
SAMPLE FAMILY BUDGET
Making a family budget is highly dependent on how much the family income is.

Monthly income of the father Php45,000.00

Mother is a plain housewife
Income of the married eldest son Php20,000.00
Daughter is in 3rd year college
The family is renting an apartment
Total family income Php45,000.00
BUDGET COMPONENT ALLOCATION (%) AMOUNT (Php)
FOOD 35% PHP 15,750.00
UTILITIES 12% PHP 5,400.00
SHELTER 15% PHP 6, 750.00
EDUCATION 13% PHP 5,850.00
SAVINGS 10% PHP 4,500.00
HOUSEHOLD OPERATIONS 4% PHP 1, 800.00
MEDICAL AND DENTAL 4% PHP 1, 800.00
CLOTHING 4% PHP 1, 800.00
REST AND RECREATION 3% PHP 1, 350.00
TOTAL 100% PHP 45,000.00