Family Cash‐Flow Budgeting

Abstract

A budget process variable is developed to address three research questions con cerning family cash‐flow management: (1) how frequently is the formalized cash‐ flow budget used, (2) what are the characteristics of those families who tend to use it, and (3) what are the potential benefits associated with the use of a formal budget. The distribution for a formalized budget variable is reported for a repre sentative sample of Iowa families. The distribution is skewed with a dispropor tional large group of households reporting little, if any, formalized planning. Compared to informal planners, formal budget planners are more likely to have the following characteristics: younger, more years of education, two‐spouse households, and high circumstantial demands. Preliminary evidence suggests that benefits like increased wealth accumulation over the long run may be more important than immediate benefits like current satisfactions. A question is raised about the conventional assumption that families typically use a formalized or “normative” budget process.

Credit, Saving, and Insurance Practices Influencing Satisfaction With Preparation for Financial Emergencies Among Rural Households

“…Money managers who had higher household monthly income reported a higher level of satisfaction with their preparation for financial emergencies than did those with lower household monthly income. Titus et al (1989) and Beutler and Mason (1987) reported similar findings. The presence of insignificant coefficients for some input variables may indicate multicollinearity problems in the model (linear association between input variables).…”

“…Money managers who used a larger proportion of their income to pay installment debt were less likely to be satisfied with their preparation for financial emergencies. Several other researchers have found similar findings (see Beutler & Mason, 1987;Hira, 1987a;Titus et al, 1989).…”

“…The throughput processes have been defined and measured in a variety of ways: planning/budgeting record keeping, saving, having credit, debt repayment, and possessing one or more insurance types (Beutler & Mason, 1987;Dollar, 1983;Heck, 1983;Hira, 1987aHira, , 1987bHira & Mueller, 1987;Jeries & Allen, 1986;Ohrt, 1986;Peck & Stewart, 1985;Sahlberg, 1977;Schnittgrund & Baker, 1983;Titus et al, 1989). Garrison and Winter (1986) developed an index of managerial behavior, which consisted of 14 items on a Likert-type scale.…”

“…Other researchers used several domains of the family financial situation and computed a satisfaction index (Beutler & Mason, 1987;Davis & Helmick, 1985;Hira, 1987a;Titus et al, 1989).…”

Money Doesn't Buy Happiness, but It Helps: Marital Satisfaction, Psychological Distress, and Demographic Differences Between Low- and Middle-Income Clinic Couples

“…Godwin (1990) has described the inadequacy of family financial management behaviors: Godwin and Carroll (1986) found that families, on average, engaged in fewer than 6 of 18 recommended financial management behaviors. As measured by Beutler and Mason (1987), fewer than 10% of families had high budget formality scores, including keeping written plans and records of expenditures, reviewing expenditures and using a planning horizon of one year or more. Almost 20% of their families never engaged in any of these practices and reported planning horizons of one day or less.…”