Management Of Family Resources

Lesson 35 : Family Income Management

Classification Of Family Income

Real Income:

It is the flow of goods and services used or available for any given period of time. Real income is derived from the use of human as well as economic resources and it includes the services derived from owned property and possessions. It also includes such things as foods furnished by the garden, the stay in the own house, the automobile use and all other types of equipments.

Community provides another form of real income for family through its public schools, libraries, radio programmes, parks, fire protection etc. The family that uses these facilities can increase the realized income significantly without expenditure of money.

Another important part of real income is the knowledge contributed and services rendered by the family members, especially the home-maker.

Ex: The knowledge of how to buy household articles to get best use of the money spent can help in saving money.

This is where the quality of management is revealed in the home.

In all, real income is made up of two major types - direct income, and indirect income.

(i) Direct Income or Non-money Income: Consists of those material goods and services available to the family members without the use of money. Following are the sources of real direct income:

1. Commodities such as products of flowers and vegetables gardens and fuel cut from woods owned by the family etc.
2. Services of all family members including those of the homemaker who cares for family members, prepares food and cleans the house, and those of other family members, such as those of the father who makes car repairs, the son who mows the lawn or the daughter who does family laundry.
3. The use of a home which is fully owned by the family.
4. Free or social income provided by the community such as commercial and library facilities, parks, schools, roads, fire and police protection, etc.

(ii) Indirect Income: Consists of those material goods and services which are available to the family only after some means of exchange, mainly money. This has already been explained earlier. The commodities and services which are purchased with money range from food items to cars, from the services of a servant maid to the services of a medical specialist.

Occasionally a commodity or a service may be traded or bartered for another. For example, neighbors may give each other some home preparations and students may sometimes trade textbooks at the beginning of a new term.