A Guide To Family Finance

Money concepts. Paper family and stacks of coins on white backgroundAccording to many reports, one of the major causes of divorce are financial issues. This is quite an unfortunate statistic since finances are one of the most important factors that should be considered before a couple gets married and starts a family. The truth is, money is a very important factor in life and a lack of money or the poor management of money can wreak havoc in relationships, marriages and families. Therefore, this article will be taking a closer look at financial management in the home and a provide a few guidelines on improving family finance.

The first thing that every family should do is take a close look at the incoming money and monthly expenditure. This means that it is best that the couple record their entire spending for at least one month which includes groceries, household bills, personal expenses etc. This will allow both parties to clearly understand where the money is going and how they can both better control the flow of money in the future. This documentation can be irritating at first, but is only the first step to truly understanding how to manage money.

Next, once the monthly expenditure has been recorded, each person should then account for their expenses. This part can cause many arguments, however, it is important that each person understands the other person’s mentality on money and spending. Some people are naturally irresponsible with money and live in a state of constant debt. Of course, this is why it is crucial that a couple talks about and understands each others spending habits before getting married. For example, if one person is a shopaholic and the other is a proud cheapskate, it doesn’t take a genius to see that this relationship will be in for a rough ride! Financial compatibility is very important and it is best to determine this before marriage.

In the event that an already married couple is financially incompatible, then a middle ground has to be reached. This means that both parties need to meet each other in the middle and compromise. Of course, this can be better helped if both parties can generate more income or work together to reduce some of their expenses.

In addition to working on financial management between a couple, when they have children, the children should also be involved in the finances of the family. Children should be taught the importance of money and they can learn this by being paid for chores or being encouraged to create a small business. Many entrepreneurs start from young and a simple lemonade stand or newspaper delivery service can help them to develop financial intelligence.

As the children get older, they should be allowed to have a say in the family budget and should also be allocated an allowance and budget of their own. As they grow into teenagers and young adults, with jobs of their own, they should also contribute a small percentage to the bills and expenses of the household.

When it comes to family finance, this is an issue that not just one person in the family should be responsible for. Every member of the family should have a say and be able to contribute to the overall financial wellbeing of the household.