The Familys Financial Life - Essay Example

It is good to realize that there is a net surplus that is left after accounting for all the fixed expenses, which represented about 40.48% of net income; and the variable expenses amounting to 47.62%. It simply gives the family more leeway in terms of adjusting the variable expenses when the time comes that we need to minimize some expenses to give way to more important priorities.
The projected income is easy to determine as no other sources were currently eminent. The income from salaries of both my husband and me as teachers comprises the basic cash in which is easy to establish on a monthly or yearly basis.
On the other hand, cash expenses are composed of several different items, and the expenses are classified into fixed and variable expenses. Some could be established as regular fixed expenses which do not differ every month. On the other hand, other expenses such as food, savings for emergency purposes, and miscellaneous expenses differ depending on the diversity of needs and requirements of family members across time. I, therefore, learned that a substantial portion of our family income is spent on different needs but somehow, by managing to allot a small amount for emergency purposes and still be able to maintain some surplus, we could be able to meet unforeseen expenses and could plan for future financial goals.

B. Budget for October
Using the financial goals worksheet in Part I, the budget for October is as follows:

From the income and expense developed in September, the same income and expenses are expected in October, except for the additional savings needed as outlined in the financial goals worksheet in Part I, where the long-term goal of a vacation in Hawaii, life insurance of children, and funds to be earmarked for the coming Christmas vacation need to be allotted as additional savings. These amounts were taken from the net surplus of $750. When the additional savings are taken out, only $54.17 will remain. One intends to use a computer spreadsheet (Excel) to record and continue monitoring income and expenses, as well as manage the family’s budget.
C. Outstanding Debts
In tabular form, the following are the outstanding debts with amounts owned, to whom, minimum monthly payment, and pay-off date:
These amounts are owed to utility companies, telephone, and cable companies, as well as financial institutions that approved the housing loan, and are reflected on an annualized basis. Meaning, that to determine the monthly payments, the gross amounts have to be divided by 12 months.
Also, starting in October 2011, as shown in both the financial goals worksheet and the budget for October, there would be a $50 amount would be earmarked for the life insurance of the children. At $50 for 60 months, this would total $3000, which is another amount that is to be added to the outstanding debts. The projected pay-off date for the insurance is October 2016.
There are no defined pay-off dates for the utilities and telephone and cable amounts but for the housing loan, the pay-off date is within 10 years from 2011 or until 2021. From this exercise, I, therefore, learned that by recognizing the family’s outstanding debts, we could schedule our expenses (especially those which can be adjusted as reflected from the variable expenses in the cash flow statements). Read More