Management Of Family Resources

Lesson 35 : Family Income Management

Classification Of Family Income By Betty Stevenson

Another classification of family income as given by Betty Stevenson is as follows. He has divided the family income into three types:

1. Productive Income: This is composed of the productive efforts of the members of the family. The productivity of the family members as well as that of the durable goods together contributes towards this income. Thus, this type of income comes mainly from two sources:


• household production through the use of talents, skills, abilities etc.
• services obtained from durable goods services such as house, T.V, car, stereo, etc.

Thus the efficient use of human material resources will add to the productive income of the family.

2. Money Income: This is the second type of income. As said earlier, this is the form of money received as wages, salaries, dividends, interest, rent, etc. Thus, it can be in the form of:


• Employment income i.e. salary or wages.
• Investment income i.e. dividends or interest earned through saving accounts, purchase of stocks and bonds, etc.
• Monetary gifts received from members outside the family.


3. Hidden Income: This is that type of income which we generally do not realize. But in a way, this also contributes a lot for the achievement of family goals. This can be of four types:


• Community facilities such as police, fire protection, public schools, parks, library, etc
• Psychic income like satisfaction by efficient use of services and commodities.
• Employment benefits like employee discount, health care, free car, house, etc.
• Consumer savings i.e. saving money through intelligent buying.



Thus the total or the composite income is comprised of the incomes from all sources in addition to the income received in currency. The sum total of family production, actual money earned and a hidden income represents family's composite income. One should keep in mind that all financial I management decisions should be made on the basis of composite income and not merely on the money income. This will lead to better financial management practices and a higher satisfaction for the family members.