Financial Management Strategies in Families Today

Karabeian4 Professor Green
English 100
9 October 2013
Financial Management Strategies in Families Today.
Financial management is very essential in maintaining a home and in my opinion goes hand in hand with discipline or is part of discipline itself. It also goes beyond just being a wise spender, and involves good planning for college, retirement and so forth.
There are various methods in which a family with steady income can stay financially stable. A good start is for the family to understand who is financially in charge. It is usually someone that is good at maintaining self control with spending and who somehow is knowledgeable about some financial management. In my family for instance my dad and mom work together as one team. My mom manages day to day financial operation both at home and in the office which is basically bookkeeping, while my dad handles the bigger investments which entitles him as the family’s financial manager. The financial manager shall take the calls to wisely invest the family’s money to secure their future while creating a comfortable day to day lifestyle. The manager must also design ways to transfer money into the hands of the members of the family depending on their age and needs. Besides that the manager must be aware of all kind of expenses that his/her family goes through. Two popular types of expenses are fixed expenses and variable expenses. The money spent on fixed expenses, for example a piece of property, almost always never losses value and remains constant. The manager however can tinker and play around with saving the expenses when it comes to variable expenses to best suit the family’s needs. The variable expenses are an area where the manager should explore avenues to save money. Speaking from a personal perspective, one has learned that the family should be able to live and sustain on a bare minimum needs. This does not necessarily means that one should strip down luxury, however, there is a cost to everything, and the family should be taught by the financial manager of the household to be flexible in their expenditures. A good way to be flexible in the family’s expenses is to save a small amount of money for emergency purposed, have a set amount of money for any expenses the family has such as food, water/power, and education. Then the family should have money for luxury expenses and free spending. The perspective here is of a family, which has a husband and a wife with two kids who go to school. The happiness index of the household should be least expected to be measured by the financial soundness. Money should be focused primarily on education, as it is the most important need and want of any kid in the world today. The next step is to prioritise the variable expenditures. After putting education at the top, the next comes to the rent of the house, if the family is renting the apartment. If not, then the expenditure is not included in the variable expenditure scheme. It is imperative for the manager of the family to cover the educational expenditure. After having accounted for, the next important act is to plan savings from family outings, movies, partying and outdoor leisure activities. The family should have the list for every money being spent from the daily current account. There should be two types of account to manage financial expenditures. To maintain financial stability, it is crucial to write down the expenditures as and when they occur. This is a great way for the family to know their expenses and to never go over their spending limit. Apart from following the above tricks in order to maintain financial stability in the household, one of the most important ways to achieve a greater degree of financial stability is to have a yearly and a monthly budget before the term of the period starts. This budget should be in consonance with the money earned by the household, otherwise the budget goes haywire. This is another great way to know how much you can spend, and how much money you are working with. If the family is a middle income earning family, then focus should be on maximizing the essential expenditures and then worrying about the leisure expenditures. The essential expenditures should always come first and that is why it is crucial to have a list of important and unimportant expenditures. For a family, which is earning a lot of money, they can do without having such list. As far as the expenditure list is concerned, education tops the charts, then comes food and travel, then comes entertainment and finally comes the leisure activities, which would also include outdoor dinners, and such activities, which would allow them to vacate the society and go on a nice vacation. The above points out to a detailed list of organizing and maintaining the expenditures. However, the more important, or should we say the most important mannerism in order to have financial stability is the will and the energy to exercise the ideal budget in the family. The art of having a financial stability is to sustain this day in and day out without having any qualms about the difficulty to find the sweet spot as far as economics of the household is concerned. Only when the financial manager of the household has the determination and the grit to carry out such actions can the family maintain financial stability. Financial stability is a healthy way to keep the family together, and these are a couple way to keep financial stability in a family. A wise financial manager must never gamble with the roof over his and his family’s head. What ways do you or your family members do to stay financially stable?

Works Cited
Holder, Sherie. "Teach Your Children The Building Blocks Of Finance." Black Enterprise. N.p., 1 Feb. 2006. Web. 9 Oct. 2013. Available at: http://www.blackenterprise.com/mag/teach-your-children-the-building-blocks-of-finance/
Schug, Mark C. "milwaukees youth enterprise academy:an eight year study of a model program for urban youth." N.p., 20 Apr. 2010. Web. 9 Oct. 2013. .

Cited: Holder, Sherie. "Teach Your Children The Building Blocks Of Finance." Black Enterprise. N.p., 1 Feb. 2006. Web. 9 Oct. 2013. Available at: http://www.blackenterprise.com/mag/teach-your-children-the-building-blocks-of-finance/ Schug, Mark C. "milwaukees youth enterprise academy:an eight year study of a model program for urban youth." N.p., 20 Apr. 2010. Web. 9 Oct. 2013. .