Family Economics And Consumer Education 3 (2+1)

Lesson 01 : Meaning and Scope of Family Finance Management

Meaning of Family Finance

Family finance refers to the management of family’s monetary resources which flows into family in form of currency of the country. The various forms in which a family financially gains are wages, salaries, interests, bonus, dividends, rent, profit, gifts etc. Family finance (money) is stated to be a flow as it keeps changing from time to time and is received over a period of time. It is an important non human/ material resource valued due to its purchasing power over goods and services. Its efficient use harmonizes family living with that of its expected quality of life.
Functions of money

1. It is the commonest medium of exchange.
2. It is used to measure the value or worth of goods and services.
3. It helps to measure the standard of living of family.
4. It can be saved and invested for future security and sustainability and is used as a store of value.
5. It serves as the means for transferring value.