|Household expenses are a source of a lot of stress in families, usually when it comes to determining what expenses need to be prioritized especially when the budget is limited / Photo by: avemario via 123RF|
Have you ever wondered exactly how much it will cost to raise a family? Or at least, how much your parents have spent on you and your siblings? Household expenses are a source of a lot of stress in families, usually when it comes to determining what expenses need to be prioritized especially when the budget is limited. There’s the house rental or mortgage payment or the school tuition fee that needs to be settled. Indeed, having a family extends far beyond just living with a loved one and having kids. There exist real-world decisions on finances and material things.
The Typical Family
According to the British Broadcasting Corporation (BBC), the world's oldest national broadcasting organization and the largest broadcaster in the world by number of employees, families today are changing shape and facing new lifestyle challenges. Based on statistics, the typical UK family of the 21st century is made up of a married couple, kids, and at least one pet. As of 2006, there were already 17.1 million families residing in the UK, an increase from 16.5 million in 1996. Most of them (71%) have a married couple, with cohabiting couple families increased by 14% from 9% almost 10 years earlier. Two children remain to be the most common number of offspring. These families also have an average income of 32,779 pounds, with 40% of them likely to have two cars, 52% would have owned a pet, 79% would have at least one mobile phone (on a per household basis), 79% would have lived in a mortgaged home, and 65% would have a home computer.
What Do They Spend On?
Household expenses represent a per-person breakdown of general living expenses, which includes amounts paid for lodging, food, utilities, and other things related to the cost of living. Types and categories of household expenses include home expenses, child-related expenses, transportation expenses, and entertainment expenses.
Studies have found that UK household spending for the year 2018 was the highest since 2005. The BBC further shared that the average family income in the country is 32,779 pounds before taxes, with the average household made up of roughly three people spending 601.20 pounds a week compared to just a couple that spends 527.30 pounds a week. The average household spends more in total but less amount per head at 155.60 pounds compared to a couple’s 263.60 pounds per head.
The bulk of expenses in households come from mortgages and interest payments. The next category with the most amount of money spent by the family on is transportation, with recreation and culture following and then food and drinks rounding up the priority list. The category with the least amount of expenses allocated to is health. Transportation expenses come out as among the highest a family spends on, taking up 14% of the household’s average total expenses. It is even ahead of food and drinks because travel is done so often and even more frequently than eating. Looking more closely, health comes out as the category with the least expenses because the average young individual aims to remain as healthy as possible, with trips to the doctor seldom made as compared to making trips to buy food or to go out with friends. However, this situation changes if families with older people are considered. Additionally, households with heads aged 50 years to 74 years old spend almost a quarter of housing expenses on alterations and improvements. Average expenses also vary depending on the region the family is living in, with London and the South East with the highest amount of spending compared to the North East.
|Household expenses represent a per-person breakdown of general living expenses, which includes amounts paid for lodging, food, utilities, and other things related to the cost of living / Photo by: primagefactory via 123RF|
The Family Budget
When managing household expenses, it is best to look at the factors that play a role in our daily expenses, and then gather all the bills, paychecks, stubs, bank statements, and related records so you will have a clear idea of how much you are earning and spending. It’s important to track the costs and create a budget. A few minutes spent on creating a budget can save you big money later on. It is important to note though that absolute costs and values of items we spend on are affected by overall economic performance and our employment status. Remember to set financial goals, prioritize debt, choose the right filing status for taxes, plan for emergencies, control spending on food and budget for travel. Save on the most costly categories in your household expenses and use public transportation or carpool.
There is a lot to learn about household expenses and how you spend. Being aware of your expenses is the first step, with budgeting an essential aspect of controlling the flow of money. When planning to grow a family, it is always reasonable to put household expenses among the top of your concerns, aside from the actual family, your kids, and their health and safety. It is a contributing factor to your lifestyle and how you are able to live.