Clashing demands in a low-margin family budget
A family of five in a district town has a father who earns ₹28,000 a month as a driver and a mother who earns ₹6,000 in a good month from tailoring; her income falls to zero in a bad month. Fixed commitments are rent ₹6,000, a loan repayment of ₹2,500, school fees ₹2,000, transport ₹1,500 and utilities ₹1,200. Food costs about ₹9,000 and the grandmother's regular medicine ₹800 a month. There is no emergency fund. Next week three demands arrive together: the 14-year-old daughter's school excursion costs ₹3,000; the ceiling fan in the children's room has stopped working and repair is estimated at ₹1,500; and the mother's sewing machine needs a ₹1,200 repair to keep her tailoring income. The father wants to postpone the sewing repair and pay for the fan, while the mother argues that her income is the family's only buffer. The grandmother also needs a medicine refill in ten days.
1. Prepare a monthly budget for a good month and a bad month. Show the surplus or deficit, and state whether the three demands can all be met in a bad month.
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Recurring expenses: rent 6,000 + loan 2,500 + school fees 2,000 + transport 1,500 + utilities 1,200 = ₹13,200. Food ₹9,000 + grandmother's medicine ₹800 = ₹9,800. Total recurring = ₹23,000. Good month income = 28,000 + 6,000 = ₹34,000; surplus = ₹11,000. Bad month income = ₹28,000; surplus = ₹5,000. The three extra demands total 3,000 + 1,500 + 1,200 = ₹5,700. In a good month all three can be met and ₹5,300 remains. In a bad month, meeting all three creates a deficit of ₹700 before any emergency. The medicine refill is already inside the ₹800 recurring figure and must not be double-counted, but it must be protected. The budget shows the real problem: the family is not poor every month, but it has no margin for a bad month plus clustered demands.
2. Using at least three criteria, decide the order in which the excursion, fan repair and sewing-machine repair should be funded. Explain where the grandmother's medicine fits.
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Criteria: (1) health and safety; (2) protection of income; (3) urgency and time-boundness; (4) reversibility or negotiability. The medicine is first and is not optional; it is already in the recurring budget, so the family should set aside ₹800 now and not use it for anything else. Next, repair the sewing machine: it is the smallest demand (₹1,200), it protects the mother's only buffer income, and without it the bad-month income may fall further. Next, repair the fan: in an Odisha summer a non-working fan in the children's room is a health and sleep issue, so it should not be postponed indefinitely; if the heat is severe, it moves ahead of the sewing machine. The excursion is the most negotiable: ask the school for an instalment plan, reduce other spending, or explain that the family cannot pay this month. If a bad month forces a choice, fund medicine and income protection first, repair the fan before peak heat, and negotiate the excursion. This is not a simple list; it weighs consequences.
3. Suggest two cost-cutting and two income-raising measures. For each, state one risk or limit.
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Cost cuts: (1) Buy pulses, rice and oil in bulk with another family and use seasonal local vegetables; risk - bulk buying can increase storage loss or tie up cash, so buy only what can be stored safely. (2) Reduce transport by sharing a ride or combining errands; risk - this may lengthen the day and affect meals or supervision, so it should not shift care work onto the 14-year-old. Income measures: (3) The mother can take batch orders for school uniforms or blouse stitching through the self-help group, using the repaired machine; risk - more work may collide with caregiving, so set a realistic order limit. (4) The father can take occasional weekend driving or a regular school-van shift; risk - extra hours may affect health and increase fuel or maintenance costs, so calculate net income, not gross. Avoid high-interest borrowing for the excursion; that converts a small want into a long debt. The family should also start a small emergency fund, even ₹500 a month, once the current demands are settled.