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We must classify our accounts. I am quite sure, from a good many of 

 the things that I have been hearing and seeing fairly recently, that there are 

 many of the farmers in Illinois that are doing some very careful cost account- 

 ing in their farming business. In our household business we need a general 

 accounting system which is not so detailed as this farm cost accounting that 

 you have been doing, although it would be well worth while at times if we 

 could have that in our household. 



A plan for the spending of money is a budget and we need that for our 

 household. We need a budget for the use of our families if we are to make 

 the most rational use of our income. The most helpful thing in planning 

 and making the budget is our own set of figures giving information as to 

 what we have been doing with money. We can spend the same amount of 

 money, or more, or less, as our judgment will dictate and as our wish directs 

 us. Every once in a while someone will say: "We don't have figures; we 

 haven't kept accounts." Well, possibly not, but even with people who have 

 not kept accounts the stubs of the check book will tell a good deal and you 

 will find when you really get at it that your memory will help you a good 

 deal, and you can get a fair picture of what you have done with your money 

 in 1921 if you really want it enough to give you a pretty good idea of what 

 you think you would like to do in 1922. 



Very frequently we find in the articles in the magazines and papers 

 suggestions for the spending of the income, and we find a certain per cent 

 assigned to food, a certain per cent to clothing, a certain per cent to shelter, 

 and so on. These estimates have some value, but not a very great deal, 

 because twenty-five per cent of a two thousand dollar income is rather a 

 different thing from twenty-five per cent of a five thousand dollar income, 

 and while it may take twenty-five per cent of a two thousand dollar income 

 to feed a family, it would not take twenty-five per cent of a five thousand 

 dollar income to do the same thing. The percentages do not amount to very 

 much unless we know the family, know the income, and know all of the 

 conditions Therefore let's not spend too much time looking around for 

 figures of averages of what other people have done. The only thing we really 

 need to look at is what we ourselves have done; what we are doing, and 

 arrive at an idea of what we want to do. 



In order to bring our expenditures into a condition where we can classify 

 them and analyze them, we must, of course, have some sort of a system of 

 grouping in our records. In business suitable headings for the various 

 departments of the business are adopted. So in the household appropriate 

 grouping of expenses should make it possible to analyze and interpret our 

 expenditures. Six general groups are suggested, and subdivisions of these 

 groups will aid in the keeping and interpretation of the records. I, food; 

 II, clothing; III, shelter; IV, operating expenses; V, general expenses; 

 VI, savings and investments. 



If we will classify our expenditures for our family and for our household 

 under some such group of headings, we will really have a basis for intelli- 

 gently tackling the problem of the use of our income. 



The actual division of the income, and the means of carrying it out, 

 we haven't the time to discuss this afternoon, but I want to urge the neces- 

 sity for having a plan or budget. 



MAKING THE BUDGET. 



Who will make the budget? One man said: "That is a fine thing. I 

 am going to go home and tell my wife to make a budget." You know the 

 wife could not make the budget alone, neither could he make it alone. The 

 family should be on the job while the budget is being made. 



I know husbands, for instance, whose wives know very little about 

 their business. I know one very beautiful woman who said to me one time: 

 "Well, I don't know what we should spend. I have no idea what my hus- 

 band's income is. I don't know whether I am extravagant or whether I am 

 not. How can I know, when I know nothing of my husband's business?" 



