Released July 31, 2009
AUBURN UNIVERSITY, Ala. -- One major battlefield in families is the issue of handling finances. Half of all couples seeking professional counseling report money problems as a major issue. Only a small percentage of these couples are in financial difficulty because of inadequate income. Most families are in financial difficulty because their attitudes about money have been unrealistic.
Before a family can have a realistic view of money, it must have a mutually agreed upon financial plan.
Spur-of-the-moment purchases for instant gratification get many families into trouble. Some people make purchases in an attempt to keep up with the neighbors, although their goals and circumstances may be considerably different.
For some families, financial success has become equated with unnecessary and materialistic items, such as a new car, when a used one would perform as well, or a gold watch, when a less expensive one keeps time just as well.
Money also becomes a weapon of aggression in a battle for family dominance.
While money does constitute problems in many families, people must remember that for every problem there is a solution.
- Remember money is a resource. It is a tool to help you reach your financial goals.
- Track expenses of everyone in the family. You cannot manage money if you do not know where it is being spent. Even the small expenses. Once you know where it is being spent, you will see where changes can be made in spending.
- Be realistic in making financial decisions. Figures do not lie. If the numbers do not support a new digital TV, why are you buying one?
- Write down short-term and long-term family financial goals. Make them plain and refer to them often. Make your goals SMART (Specific, Measureable, Attainable, Realistic, and within some designated Time frame).
- Keep in mind that the family income is shared and should be treated as such.
- Discuss attitudes and emotions about money and expenditures openly and honestly as a family. Communicate and listen to all members of the family.
- Be sure both parents understand the details of the family finances. All the budgets and spending plans in the world will not compensate ignorance when it comes to financial matters.
- Buying on credit should not result in payments of more than 15 percent of a family's income. This means for every $100 earned, not have more than a $15 dept payment, excluding rent or mortgage and car payments.
- Do not acquire new debt until you have paid off the old debt.
Remember the amount of your income is considerably less important than the way you handle it. This is true on every economic level! People look to an increase in income as the way to solve their financial difficulties. Many times the relief is short lived and the real cause of their financial difficulties, bad spending habits, failure to plan, lack of discipline, money attitudes, eventually catches up with them and they are right back in financial trouble.
If there is one thing that poor money managers have in common, it is the idea that they do not earn enough. Rarely does it occur to them that the real cause of their financial trouble is that they spend on things that do not fit with their financial goals and objectives, if they have goals and objectives at all.
Make deliberate choices about money with full awareness of the consequences and a willingness to accept them. Keep in mind that money is good for three things: spending, saving and giving. Keep these in mind with your financial goals and plans.
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