Managing Economic Resources

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Managing Economic Resources

• Chapter 10

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Stresses of Family Finances

• Financial issues most common stressors
• True for families at any stage
• True regardless of how much money you make

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Handle money and finances well, tend to be
happily married
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Why do finances cause problems?

• Money is a taboo topic
• Unrealistic expectations
• No budget or not stick to it
• Overspending
• Rely too heavily on credit
• Different styles of spending and saving
• Use money as power and control

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Most families in US are middle-income families

• 15,000 - 75,000

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Does it pay to work outside the home?

• By year 2000 estimated that 60 women will work
  outside home

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Does it pay?
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This totals 3.25/hr. in real income
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Pooling Money

• Research shows no difference in couple
  satisfaction

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Important pieces to family finances

• Budget
• Savings
• Emergency fund
• Watch credit
• Always have health insurance
• Always have life insurance if you have dependents

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Housing

• General rule
• Paying over 1/2 is too much

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Warning signs of overextension

• spending more than 15-20 of disposable income to
  repay debts (not house)
• Run out of money most months
• Pay only minimum balance on bills
• Cant pay all bills and pick and choose which
  bills to pay

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More warning signs

• Borrowing money for things you used to pay with
  cash
• At limit of credit lines
• Asking for increases in credit limits
• Not sure exactly how much owe creditors
• Transferring debts on credit cards
• Using savings to pay for daily expenses

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Activity

• Assets will belong to both? Debts will belong to
  both?
• Share equally in financial decisions? How then?
• Use a budget? Why or why not?
• Have a personal allowance?
• Buy on Credit? Large items, small?

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More Questions

• What about debts you have before marriage?
• Who treasurer? Checkwriter? Bookkeeper?
  Investor?