Family Economics And Consumer Education 3 (2+1)

Lesson 01 : Meaning and Scope of Family Finance Management

Concept of family financial management

Financial management is the management activity concerned with planning and controlling of financial resources. The concept of family financial management may be referred as planning, organising, controlling and evaluating the use of available financial resources with the aim to attain greatest satisfaction along with high quality living.
The financial management should result in the following-

1. Development of individuals in family.
2. Enhancement of quality of life of family as a whole.
3. Opportunity to contribute to civic well being.

The concept of financial management remains same for family as for an individual however individual’s goals of financial management are mostly personal, whereas family financial management considers both individuals of the group and the group as a whole. There are three important decisions involved in family financial management which is as follows-

1. Financing or where families get money from.
2. Allocation of funds
3. Disbursement and saving/investment i.e. how much to spend and what to retain.

Family financial management is a complicated process which involves careful planning in relation to identified family goals, allocation of appropriate amount of funds for the same along with the knowledge to select the quality goods and services for family needs. It further involves the identification and appropriate use of alternative human and material resources rather than money to attain the same family goals.

Scope Of Family Finacial Managemement.