It is impossible to save systematically unless expenditures are made under some form of control, and on a basis of sound apportionment. This is the method known as the budget system, first applied to government expenditures with success, and now widely applied in business, in household and in personal expenditures.
The budget has aptly been termed “a plan of spending money in advance of actual disbursement.” The most approved budget divides or apportions the salary or income according to six divisions--Shelter, Food, Clothing, Operating, Savings and Advancement. These standard divisions are based on the needs of every individual and every family. The budget depends on the amount of income, and on the prices of products. It is also determined to a large extent by the following factors: (1) the aim and standards of the family; (2) the number of individuals in the family, and their ages; (3) the location, or residence, whether city, small town or country; (4) the occupation of the wage-earner.
Two general principles are involved in working out budgets. The smaller the income, or the more children per income, the greater the percentage of it you will have to spend on the three necessities--Shelter, Food and Clothing. Again, the larger the income, the larger the percentage which may be spent on the last three divisions--Operating, Savings and Advancement. People with incomes around forty or fifty dollars a week, can spend only about five percent, for Advancement, while those who have incomes around sixty dollars and over a week can give from fifteen to twenty percent to Advancement or to any of those interests which can be classed broadly as “higher life.”
A workable, successful budget can only be made by keeping a record of previous expenditures. Keeping accounts in detail is advisable in order to furnish a basis for future and better-planned budget spending. Buy a blank book ruled with about twenty-five columns. Give one column to each particular item, such as Groceries or Milk, and arrange these under a main heading, in this case Food. Write down the amount you spend for each item on its proper date. At the end of each week add up your accounts and compare them, with the ideal budget given on this chart for your particular income and family.
The following are the budget figures carefully worked out by Mrs. Christine Frederick, author of “Household Engineering,” and founder of Applecroft Home Experiment Station, Greenlawn, Long Island. They are concretely figured in dollars and cents for various sizes of families and various incomes,
_2 Adults, 2 Children: $40 Weekly_
Shelter 25% or $10.00 Food 34% or 13.00 Clothing 18% or 7.20 Operating 13% or 5.20 Savings 5% or 2.00 Advancement 5% or 2.00
_2 Adults: $50 Weekly_
Shelter 18% or $9.00 Food 25% or 12.50 Clothing 20% or 10.00 Operating 12% or 6.00 Savings 15% or 7.50 Advancement 10% or 5.00
_2 Adults, 3 Children: $50 Weekly_
Shelter 25% or $12.50 Food 18% or 19.00 Clothing 19% or 9.50 Operating 13% or 6.50 Savings 3% or 1.50 Advancement 2% or 1.00
_2 Adults, 3 Children: $60 Weekly_
Shelter 20% or $12.00 Food 30% or 18.00 Clothing 18% or 10.80 Operating 15% or 9.00 Savings 9% or 5.40 Advancement 7% or 4.80
_3 Adults, 2 Children: $70 Weekly_
Shelter 25% or $17.00 Food 34% or 23.80 Clothing 18% or 12.60 Savings 13% or 9.10 Advancement 5% or 3.50 Operating 5% or 3.50
_2 Adults: $75 Weekly_
Food 18% or $13.50 Clothing 25% or 18.75 Operating 16% or 12.00 Savings 15% or 11.25 Shelter 12% or 9.00 Advancement 14% or 10.50
_2 Adults, 3 Children: $85 Weekly_
Shelter 20% or $17.00 Food 25% or 21.25 Clothing 18% or 15.30 Operating 17% or 14.45 Savings 10% or 8.50 Advancement 10% or 8.50
_3 Adults, 2 Children: $100 Weekly_
Shelter 19% or $19.00 Food 25% or 25.00 Clothing 20% or 20.00 Operating 18% or 18.00 Savings 12% or 12.00 Advancement 6% or 6.00
_Business Women: $25 Weekly_
Shelter 25% or $6.25 Food 40% or 10.00 Clothing 18% or 4.50 Operating 6% or 1.50 Savings 6% or 1.50 Advancement 5% or 1.25
_Business Women: $40 Weekly_
Shelter 23% or $9.20 Food 30% or 12.00 Clothing 25% or 10.00 Operating 7% or 2.80 Savings 10% or 4.00 Advancement 5% or 2.00
_2 Adults, 2 Children: $30 Weekly_
Shelter 22% or $6.60 Food 45% or 13.50 Clothing 20% or 6.00 Operating 10% or 3.00 Savings 2% or .60 Advancement 1% or .30
_2 Adults: $35 Weekly_
Shelter 20% or $7.00 Food 35% or 12.25 Clothing 20% or 7.00 Operating 10% or 3.50 Savings 10% or 3.50 Advancement 5% or 1.75
Definitions of the standard budget divisions will help to clear up some questions:
Shelter covers the rent of your house or room. If the house is owned, then the total yearly expenses of taxes, insurance, repairs and general upkeep should be divided by twelve, and this estimate set down for each month. If farm or parsonage is free, nevertheless such value should be estimated and included. Shelter also covers carfare or transportation to both work and school. In the case of some rented apartments and houses it also covers coal or heat, in which case this amount is deducted from the division entitled Operating.
Food covers the cost of food materials and products used in the preparation of meals, also board and meals eaten away from home.
Clothing covers the cost of ready-to-wear garments of every type. It covers the cost of materials and supplies for making clothing at home, the expense of a dressmaker or tailor, cleaning, repair and pressing.
Operating covers the cost of fuel, light, telephone and ice. It also covers the expense of a maid, laundress, or laundry and its supplies. It includes any service paid for by the hour, day or month; the cost of furnishings, and labor-saving or other household appliances, their repair or replacement.
Savings covers all payments on property; on all kinds of life and beneficiary insurance; on bank savings deposits, stocks, bonds and other legitimate investments.
Advancement covers sanitation, health and toilet articles, doctor and dentist expense. It also covers educational expense, and items of amusement and recreation, such as books, periodicals, music, the theater, vacation and travel. This division covers also such miscellaneous items as clubs, charity, organization dues and the like.