Managing Money Within the Family

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Managing Money Within the Family

Taken from On Target 261

We all know that money is a major factor in our lives. It may not be the key to happiness, but if you haven’t got enough of it, life sure can be miserable.

Money disputes are a principal cause of divorce. Money determines your lifestyle, your security when you’re getting on in years, even the degree of personal freedom you have to move around from place to place or job to job.

How much you have is not of overwhelming importance. One man or woman can be happy on $2,000 a month, another can be in financial trouble with $20,000 coming in. What matters is how you handle your money within the family.

Keeping the scale of your spending under control is only part of it. It’s also a matter of cutting out wasteful spending on the things that don’t really matter to you and your family. And of investing wisely.

Knowing how much you have should be the easiest part of it. Every worker knows his or her take-home pay, every stay-at-home partner the size of her or his monthly allowance. Yet many husbands won’t let their wives know what they earn, many wives squirrel away money saved out of housekeeping allowances in savings accounts kept secret.

Proper family money management is impossible if there is secrecy, mistrust, discrimination. Marriage is a financial partnership as well as an emotional, physical, spiritual and legal one

Even if one partner is obviously more suited to handle the business of controlling the family cash, the other (and to some extent the children, too) ought to know what’s coming in and where it’s going to. In two-income families, earnings should be pooled. Older children who are earning and living at home should be expected to make a contribution towards their upkeep.

After all the basic expenses have been paid, the investment of any savings and the spending of any surplus available on luxuries should be divided on an agreed and fair basis.

If one partner is a spender by nature then it’s best to keep family savings in the other’s name. But a wife should always have some funds of her own, whether or not she goes out to work. She should at least have a personal allowance, separate from the housekeeping money.

If both partners are working, both can handle money, and both run chequeing accounts, it’s important to allocate responsibility by mutual agreement on who pays what when it comes to the big bills – husband pays the mortgage, wife pays the domestic help, and so on.

Children should also have personal allowances (“pocket money”) from the age that they’re buying themselves treats at nearby shops. Teenagers should be given enough to allow them to buy their own clothing, as well as being encouraged to save money for big-money items such as smartphones, and to open and operate bank accounts. It’s an essential preparation for adulthood.

Within the limits of what you can afford, try to match your children’s allowances to the average of their friends’. Don’t give them substantially more. Your love for them can never be expressed in money, nor can cash ever be a substitute for love.

Managing Money Within the Family taken from our ‘On Target Newsletter’ issue no 261

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