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How to Handle Money in Your Relationships
Planning Family Budget
Planning Family Budget
You can't have a great relationship until you can communicate and agree about money. The amount of money and the ability to manage properly this money determine the standards of living in a given home. Larry Burkett, noted financial author, says, "Money is either the best or the worst area of communication in our marriages.
Proper management of family resources, therefore, doesn’t depend on having abundance of resources. In fact, where there exists abundance there is greater likelihood of mismanagement of such resources. Wise management of family wealth aim at good planning, effective utilization and avoiding wastage should be the concern of the husband and wife. After all, the family relation is a cooperative venture. The self-consciousness, high sensitivity, modesty, care, understanding, foresight, and other positive attitudes which husbands and wives exhibit could break the chain of poverty and waste which had plagued the family for many years.
Some wives are really good business managers; possibly even better than their husbands. When it comes to money, men tend to take more risks and don't save for emergencies. Women tend to see money more as a security issue, so they will gravitate toward the rainy-day fund. For any family to effectively manage its resources very well the following principles have to be adopted:
avoidance of waste
wise and informed purchasing
family supplementary services
The success of managing family resources depends simply upon proper arrangements by which expenditures do not exceed income. A family budget should not be a theoretical, idealistic document. But must be practical, workable document by which family funds are handled and should be reviewed from time to time according to changes in the family’s economic status. It should make reasonable provision for all justifiable expenditures. While the children are still young, it is wise to make a long term plan for their education, through savings. There could be a long term plan for accommodation, family transport, furniture, electronics, landed property, etc.
Some items will have to be classified under medium term planning, such as house rent, medical expenses, clothes, bulk purchase of food items, travels, and repair/maintenance/replacement of essential facilities. While short term planning should handle things like daily feeding, telephone, electricity, and water bills, laundry, fuel, minor maintenance of cars, receiving of guests and miscellaneous items.
A family budget is not a positive cure of financial difficulties. Its function is to assist in planning expenditures within the limits of income. It has nothing to do with increasing income which will be treated later.
Avoidance of waste
Once a family has made its budget, it is not likely that much of the family resources will be wasted by any member of the family. Family resources are normally wasted on unnecessary journeys, on-the-spot purchases not previously budgeted for, extravagant purchase of modern fashion, excessive attention to body and hair care, expensive gifts you can ill afford merely intended to impress people, eating and sleeping in unusually expensive places, engaging in smoking and drinking excessively, momentary but expensive fun and excitement. The reality is that oftentimes these expenses are not budgeted for. One is carried away by the spirit of the moment and in order to boost one’s ego, to avoid shame and disgrace, or just instinct to spend available resources.
Just as there are all kinds of husbands, so there are all kinds of wives – some extravagant and some frugal. Some husbands tend to complain that their wives are extravagant and lack an appreciation of the value of money. Perhaps the women tend toward extravagance as a mean of rebelling against their husbands’ unwillingness to take them into their confidence in financial matters. Some wives have also accused their husbands of being extravagant in buying clothes for themselves or golf sticks or whatever has met their fancy. When proper bond of confidence exists between husband and wife, the couple will feel free to confide in their partner his or her desire to purchase anything he or she desires and they will consider if they could afford it.
It is possible that the husband will be unwise in his spending of money as that the wife will be extravagant in her handling of funds. The husband should recognize his human traits and be willing to enter into cooperative arrangement by which he and his wife, planning together, agree upon the proper use of the family’s funds.
Wise and informed purchasing
A lot of family financial problems could rest on a poor user knowledge concerning certain goods and materials purchased for the use of the family. Huge sums of money have known to be spent by families to purchase certain electronic equipment only for these equipment to lie unused or abandoned to rot away because no one know how to install or operate them. Such equipment may even become damaged by the user or others due to poor knowledge of voltage regulations and minor maintenance specifications, thus necessitating further expenditure.
In some cases, the equipment which may appear cheap but will not last because it is poorly manufactured; some of them are obsolete; and some have no replaceable parts or the parts are too expensive. The result is that such equipment becomes a source of serious financial leakage in family funds making it difficult to abide by family budgets. The problem becomes more urgent if the equipment is very necessary for the family.
Wise and informed purchasing requires that experts and other users of the same product be consulted before purchases are made. A typical example is family automobile. Some families have spent an entire family savings and even gone into debt in order to purchase cars without necessary spare parts to effect repairs when the need arrives or keep roadworthy an old automobile, only to discover when it is very late that they are pouring their resources into a bottomless pit.
Wise and informed purchasing is not limited only to mechanical or electronic products. It applies to food items, household wares, furniture, etc. through informed purchase; a buyer may be informed the best time or place to purchase the desired products. Furthermore, the buyer may be informed where to buy the product of interest at a reasonable price. Informed purchasing, aids a family to cut their coat according to their size.
Family supplementary services
No family worth its name can lay claim to a proper management of resources if it depends completely on paid services such as cook(s), house help(s), driver(s), laundry men, gardener(s), security men, and butler. Considering the effect which payment for and maintenance of all these employees has on the family budget, it might probably be in the family’s interest for members of the family to engage in family supplementary services.
Some members of the family could also acquire a basic knowledge of the installation procedure, use and repair of certain electronic products. There may also be need for knowledge of basic electrical works, first aid, mechanics, plumbing, gardening, animal husbandry, laundry, etc. such knowledge could, in the long run be of immense help in reducing family expenses on these services.
However, care should be taken that family supplementary services don’t interfere with children’s education.
How to get enough money to meet family need is very important matter. It is a universal problem. No family ever has enough money. Human wants and needs have a way of keeping just a step ahead of the source of income. So it is important that a family engage in some family investment. Through good family financial planning and budgeting, a family may be able to save enough money to invest or it could seek for soft loan for investments. . Investments could be in the form of deposits in savings account that yield interest, landed property, stock market investment in shares etc. Other areas a family can invest are in buying and selling, baking, restaurant hospitality business, bookshop, business center, hairdressing/barbing salon, and distribution of goods. In might be better if the business is sited near the home for adequate supervision.