Family Economics And Consumer Education 3 (2+1)

Lesson 01 : Meaning and Scope of Family Finance Management

Scope Of Family Finacial Managemement

Financial management has enormous scope at personal as well as family level. For harmonious family living, it is essential to discuss financial matters reasonably and objectively within the family and willingness to accept responsibility for financial decisions. Financial management is more important as compared to actual monetary gains of the family. Efficient financial management enlarges the effective value of available monetary resources. The major responsibilities involved in financial management include keeping records of expenses, dates when outstanding bills are due along with their due dates and methods of payment. It also involve keeping other records (bank books, cancelled cheques, cheque books etc. and receipts for major purchases, insurance policies, social security numbers, records of income safety deposit box keys, securities etc.) that pertain to over all family finance.
Financial management offers an opportunity to prioritize the family needs and spend money within the limits. It motivates family for saving and investment for future needs. It inculcates sense of responsibility with reference to economic use of financial resources for attaining quality of life. Growing children once given the responsibility to manage their finance, start understanding the value of money. It widens their horizon to identify alternative resources to meet stated demands rather than using money resource only. Thus saved money can be used to meet other needs of the family. With enhanced resourcefulness, financial management offers the scope to develop a workable satisfactory financial plan to meet fixed, semi fixed and emergency expenses of the family without stress. Along with financial independence and security family finance management facilitates family members to discharge their social and civic obligations with an ease and in time. It also offers scope to develop a pool of resources to meet family or individual needs requiring quite a big financial aid. Family’s dependency on credit reduces with adequate financial management. Analysis of psychological impact of the way money is used on each member of the family is also an aided scope of family financial management.