An In-Depth Look at Family Cash-Flow Management Practices

Financial management researchers have typically used a checklist of recommended practices to examine the practices of family financial managers. These studies have shown only a minority use the recommended practices but have offered no insight into what is done. Using in-depth, semi-structured interviews of seven different families, it can be suggested that managers do develop an orderly cash-flow management process. The process is systematic, formalized, done in a regular manner and on a regular basis but not that recommended. The process adopted achieves the manager's objectives of paying the family's bills on time and avoiding overdrafts. The findings suggest that educators focus on developing easy, convenient short-term practices and tools that also would improve the family's long-term financial position.