TRANSACTIONS IN THE HOMES AND OFFICES

CONTENT

1. Household Arithmetic (budget, savings, rents, taxes, bills, water rate)

Household Budgeting

This is the process of planning how to spend an amount of money or family income that is available to avoid wastage. It guides in aligning expenditure with income.

Example:

The monthly income of a family is \(\#140 000\). They plan to spend the income as follows:

\(\#6 000\) for house rent, \(\#44 000\) for food, \(\#15 000\) for transport, \(\#3 000\) for electricity bill, \(\#2 500\) for water bill, \(\#10 000\) for dependent relatives and \(\#8 000\) for the housekeeper. Find the total expenditure of the family and determine whether they will have some money for other emergencies or expenses.

Solution:

Total monthly income \(= \#140 000\)

Expenditure:

Total expenses \(=\) sum of all the expenditure \(= \#88 000\)

Excess amount

\(=\) monthly income \(–\) total expenditure

\(= \#140 000 -\#88 000\)

\(= \#52 000\)

Hence, the amount of money left for other expenses is \(\#52 000\)

Class Activity

A corps member plans to spend his monthly allowance as follows: \(30\%\) on food, \(5\%\) on clothing, \(2\%\) on entertainment, \(3\%\) on transport, \(2\frac{1}{2}\%\) on electricity and \(20\%\) on savings.