Family Resource Management

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Family Resource Management

The purpose of Management

Management could be defined as “planning for and implementing the use of resources to meet demands”.

Management is both affected by and affects the environment and the context within which it functions. It is constantly under review.

The purpose of resource management is to:

· Improve the quality of life of the individual or family · Improve management practices within the household · Provide a basic tool for achieving desired goals and purposes by using resources to advantage.

Instead of planning for each situation individually, we use an overall system.

This system looks at all the tasks and all the available resources, then decides priorities according to values, immediate needs or events. This prioritising is done through communication and decision making by all the people concerned. After implementation, the outcomes of these decisions are evaluated and reviewed regularly.

Family management uses both personal and managerial aspects. Through the managerial system, individuals and families try to reach their goals by acquiring and using all resources. Planning and implementing plans are managerial skills.

Family Resource Management System

A Family Resource Management System has the following components:

· Input — this includes consideration of needs, values, goals, events and resources. · Throughput — includes planning, organising and implementing. · Outputs — include evaluation and modifications.

In the Family Resource Management System, decision-making and communication, (either by and individual or by the group) is an essential aspect of each stage in the system.

Factors affecting this management system include:

· Stages in the life cycle · Employment patterns · Culture · Values · Sex roles · Management of dual roles · Socio-economic status · The size and make-up of the family unit

Money management

1. Calculating Net Income Most workers earn money, in return for their work, either weekly or monthly. Gross income is income before any deductions are paid to the government. Net income is what is received after all deductions.

In calculating one's net wage/salary, the following deductions should be noted:

P.A.Y.E. (Pay as you earn) income tax which deducts more tax from larger salaries and less from smaller salaries. This is considered an equitable system.

The standard-rate tax band for a single person is Euro 28,000 and double that for a married couple. Above this threshold, the higher rate of tax applies. The tax bands currently stand at 20% and 42% of gross income.

Since April 2001, everyone who pays tax is entitled to tax credits, i.e., a portion of wages or salary that is not taxable. The size of the credits depends on individual circumstances, such as whether the taxpayer has a mortgage or not.

P.R.S.I. (Pay related social insurance) is a form of compulsory social insurance and goes into a common fund to pay for social welfare provisions. It is also a progressive form of tax as it takes more from higher earners.

Other optional deductions from salary include: pension contributions, health insurance, trade union subscriptions and savings schemes.

The resulting figure after all these deductions is the net wage/salary.

2. Budgeting A budget is a plan of spending money in order to ensure that net salary is equal to spending plus an element of saving. The plan should be made out in advance and be based on past spending.

Advantages of budgeting

   * Keeps spending under control
   * Identifies overspending and allows corrective action to be taken
   * Sets a good example for children
   * Allows money to be set aside for such things as holidays or special events
   * Provides a sense of well-being and reduces stress.

Preparing a budget List all items of expenditure, e.g., mortgage, household bills, food, clothing, travel, healthcare, leisure and savings.

Different families need to allocate income in different proportions depending on their circumstances. Those on low incomes need to allocate a higher percentage on food, etc. The following percentages should form a guide:

   * Accommodation/house 25%
   * Food 25%
   * Household expenses 15%
   * Clothing 10%
   * Travel 10%
   * Healthcare 5%
   * Leisure 5%
   * Savings 5%

3. Paying for Goods and Services Cash - should only be used for small items in order to ensure safety.

Cheques with current bankers card - this is a method of paying for goods or services by withdrawing money from a current account by means of writing a cheque.

Debit or Laser card - the plastic card is swiped at the till and the money is automatically withdrawn from your bank current account and deposited into the sellers account.

Buying on credit Credit is the provision of a financial service which allows an individual or company to buy now and pay later. There are several forms of credit but all should be used wisely as overspending and hardship can become a reality very easily.

   * Credit cards - goods or services can be purchased up to an agreed amount by using a plastic card, e.g., Visa or Access. A monthly balancing statement is sent out by the credit card company, which can be paid in full or part. Should only part of the bill be paid, a high rate of interest is payable on the balance.
   * Store card - this is similar to credit cards but can only be used in a particular store.
   * Hire purchase - a person does not own the goods until the last installment has been paid. Goods are paid for over an agreed length of time at an agreed rate. This is one of the most expensive forms of credit as interest rates are very high.