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.
