Challenges Facing Family Budget

Managing family budget can be challenging and frustrating for many families and it is particularly challenging for students who live at home with spouse, parent(s) or guardians and the parent is unwilling to assist with family financial information. In this assignment, assume that you are living at home with your parent(s) or that you are married.

1. Write a letter to your parent or spouse (15points):
   1. Describe the financial challenges of your family.
   2. Explaining the importance of budgeting and how proper financial planning and budgeting can help your family out of a financial quagmire.

• Describe how budgeting can help a family determine where their income is going and how much is left to save if any? What are the current and future needs of the family that you need to save money for?

1. Prepare a 12-months budget for your family. Consider all take home income, expenses of everyone who pays bill in the household. If you do not live with your parents, you will prepare the budget for yourself. (50 points)
2. Budget Analysis: In details, analyze and explain your family budget based on the subtitles underlined below:
   1. Analysis of Income: (3 points)
3. Describe how many people in your household.
4. How many people contribute to the family expenses?
5. Do you have any other income? Explain.
   1. Analysis of Expenses: (20 points)
      1. Transportation: How many vehicles in your family?
         1. Explain the expenses for fuel, car loan payments, maintenance, car insurance, registration, parking, etc. How are these paid in your household?
         2. What percentage of annual income goes towards transportation?
      2. Home:
         1. Are you renting or buying your home? Explain.
         2. How many people feed on the family grocery?
         3. Are the household supplies included in your grocery?
         4. What percentage of your family income goes towards mortgage/rent, gas and electric bill, grocery, cable?
         5. What percentage of the household annual income goes towards home related expenses?

• Education:
  1. How many people in your household are in college or private school where tuition and fees are paid?
  2. How are tuition, room, board, books, etc paid? Include the source(s) in the cash inflow (income) section of your budget and show when they are paid in the expenses section of your budget.
  3. How much is school lunch and for who?
  4. What percentage of the household income goes towards educational expenses?

1. Health:
   1. Do you have family health insurance? Explain how health bills are paid.
   2. How are medications paid?

• Do you and your parent/guardian or spouse have a life insurance? What type? Explain.

1. Loan payments:
   1. How many credit cards are in the household?
   2. Is there any plan to reduce both the number and amount of credit cards in the household?
2. Savings :
   1. What are the saving goals of the household i.e. what will you like to save money for? Buy a house? Retirement? Emergency? New car? Kids College? What?
3. Show how you pay your school fees, books, transportation, clothes, shoes, cell phone, movies, parties, eating etc. in your budget. Do you have an emergency savings, life insurance, health insurance, and retirement account? Explain. (3 points)
4. The attached template will help you. If you have any question, do not hesitate to ask me. Note that a budget is an estimate. However, it will help you and your family control expenditure.
5. Write a note to explain any excess or deficit in your budget. If you have a deficit, how should that gap be covered or if you have a surplus, what do you plan to do with the surplus. Explain any situation or circumstance(s) that impact either positively or negatively on your budget. (4 points)
6. When you finish, explain what surprised you about your family budget. What have you learned? (5 points)
   1. How can life event(s) such as marriage, new child, divorce, sickness, lust of job, etc affect your family finance? Explain.
   2. How can your family prepare for changes in the economy?