Advantages of keeping household accounts:
1. By keeping household accounts, it is easier to spend money. By this, one can be informed about the money that has been spent on different things.
2. Accounting helps in avoiding disputes regarding payments. Shopkeeper cannot cheat anyway if the purchases are made on credit. One is aware of the goods purchased; payments made, and left out balance.
3. It helps in comparing like expenditure incurred in one month with that of other month. A check can be applied if the expenditure exceeds in a month than to the previous month.
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4. Accounting helps injudicious spending and savings for future incidental expenses.
5. Children develop the habit of judicious spending if they are made conscious of household accounting.
Ways of keeping household accounts
There are two ways of keeping household accounts:
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1. Daily accounting
2. Writing cash book
1. Daily accounting
Here the expenditure of different things is written daily. Expenditure incurred on milk, washer man, entertainment, rickshaw, etc. is written in a copy or register. After putting date on one side of page, details of all the items purchased, i.e., its quantity, rate, total expenditure are written.
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At the end of the day, total expenditure is calculated. It helps to know the amount of money spent under various categories. At the end of the month, total of daily expenditure is made. If in any month, the expenditure is more than previous month, the budget can be kept under control by making comparison.
Account in a separate copy can be maintained for those items which involve daily expenditure like account of milk, washer man, vegetables, etc. It is essential to keep the record of milk as the payment of this account is made at the end of month.
Here the quantity of milk purchased daily and the purchase rate is entered. Similarly in some families, washer man irons clothes daily, helps in keeping an account of number clothes sent and received after ironing thus chances of clothes being misplaced is minimised. Daily accounting can be kept a shown in the table:
2. Writing cash book
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Cash book is available in the market. Even a register can be used as a cash page has two sides, left side is credit side and the right side is debit side.
Credit side
Details of income from all sources like salary, rewards, and rent received; money gain and withdrawal from bank are written on this side. If a person returns the loan amount, that, too, is added into the income. Money received and its sources are written date wise.
Debit side
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In this, details of amount spent on electricity bill, salary of domestic help, daily expenses, deposit in the bank, amount given on loan etc. are written.
In the end, total of income and expenditure is made. If some money is saved, it is added to credit side. The total of debit side and credit side should be the same.
Writing cash book is very beneficial the housewife. It gives information regarding how much money has been received,’ source and the amount spent under variation heads. On going through these cash one comes to know of the excess expend it on certain items and the essential items had not been purchased.
In case there J excessive expenditure under one head can be curtailed and other essential may be purchased. Cash book writing helping in balancing the budget and making savings