What Is a Restricted Budget?

Save
Family budgets are usually calculated on a weekly or monthly basis.
Family budgets are usually calculated on a weekly or monthly basis. (Image: Pogonici/iStock/Getty Images)

When a family is on a restricted budget, it means it is limiting its spending. A family will often implement a restricted budget when there is a loss of income or money is tight for other reasons, such as saving up to buy a house or afford college tuition. Restricted budgets usually focus on a family's immediate needs rather than its wants.

Sustaining Needs

The needs of a family are usually a high priority in a restricted budget. No matter how much you want to restrict your spending, paying for shelter (rent or mortgage), food and utilities such as heating are necessary for survival. However, a family may reduce the bite these items take in their budget by buying less expensive food, for example, or switching to a less expensive cellphone plan.

Curbing Wants

Most wants are eliminated when a family restricts its budget. For example, a restricted budget usually does away with discretionary spending on such things as clothes, electronics and collectibles. Other expensive habits that families often avoid while on a restricted budget include traveling, going out to eat and contracting for household services.

Related Searches

References

Promoted By Zergnet

Comments

You May Also Like

Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!