Economics

Economics

Web Sponsors

Economics

Economic Meltdown: Strategies in Managing Family Financial Resources

Author: Dr. Ugomma Ebirim

Abstract

The study examined the management of family financial resources in a period of economic meltdown. The study was a descriptive survey. The population of the study comprised 300 men and 291 women in Ado Education zone. The instrument for data collection was 21-item questionnaire. Data collected were analyzed using mean, standard deviation and t-test static. The findings of the study revealed that adequate financial budget, prudent financial planning and efficiency in financial management are the ways for managing family financial resources. The finding also showed that low standard of living, high rate of poverty and unemployment are the major influence of economic meltdown on family financial resources. It was recommended that government and financial institutions should provide Nigerian families with micro-finance for small scale business. Corruption should be addressed by the federal, state and local government to allow the use of available funds judiciously.

Introduction

            There is an urgent need for every family to begin to take precautionary steps against possible effects of the current global economic meltdown on the family. There is a strong apprehension that the current global economic situation may soon be taking its toll on the family, particularly families in developing countries. The family is generally regarded as a major social institution of person\'s social activity. Association (2010) defined family as a social unit created by blood, marriage, or by adoption and can be described as nuclear or extended. In Ado area of Benue state there are different kinds of association such as the age grade, the youth club, farmer association and the Christian Association. The Christian association is the most dominant type of family in Ado area that majority of people in the area associated with. The Christian association is classified into men and women Christian association members as family. It could be safe to say that both educated and the uneducated, regardless of which part of the world one lives, would have known by now that something is wrong with the economy of families.

            The concept of economic meltdown has assumed the centre stage in the media. Economic meltdown describes a broad range of bad economic conditions from a severe, prolonged depression with high bankruptcy rates and high unemployment, such as the Great Depression Dmitry (2008), to a breakdown in normal commerce caused by hyperinflation (such as in Weimar Germany), (Peter and John, 2011) or even an economically caused sharp increase in the death rate and perhaps even a decline in population (Former USSR). In the context of this study, economic meltdown refers to economic recession. It can be better understood if one imagines a build-up of snow that begins to diminish in size as the sun heats-it. To reduce the influence of economic meltdown on the family resources, it calls for effective management of the available family financial resources. Management according to Goldstein (2011) is a social process entailing responsibility for the effective and economic planning and regulation of the enterprise in fulfillment of a given purpose or objective. Family financial resources in the context of this paper refer to funds, capital or money.

            Management of family financial resources in this context refers to prudent financial planning, financial savings, financial budget and effective coordination of financial resources in the family. Family resources could be called money or financial resources. Financial resources can take any of the following forms: physical cash, bank credits, allowances, discount received, undistributed profit in the form of funds could help family coped with the decline being experience by many families in Nigeria.

            It seems that family financial resources may decline as a result of expenditures resulting to low standard of living, high level of poverty, and inability to meet family financial demands. According to Slater (2000), the causes of decline in financial resources are attributed to Poor management, inadequate financial control, inappropriate financial policy and high cost structure among others. These may led to a cut back in the family expenditures on social services sub-sectors like education, health agriculture, commence, industry and per capital income of an individual. This situation being experienced by families necessitates the need for prudent planning, effective financial budget, and reduction of expenses. To ensure that the above mentioned are achieved there is need for the introduction of economic concepts like investment, efficiency, accountability, budget and introduction of other business concepts like entrepreneurship.

Introduction of entrepreneurship in the family can reduce the challenges posed by economic meltdown and for improving financial position of family. Nwangwu (2007) defined entrepreneurship as a functional education that seeks to offer people functional skills to enable participant to be creative and innovative in identifying novel business opportunities for profit oriented. Entrepreneurship aims at equipping the individual members of the family with skills, knowledge and dispositions that one could help them develop or implement innovative social or business plans. In the view of Gherardi et al (2008) entrepreneurship is not only about pursing economic trends it also helps the family members to develop entrepreneur or problem solving skills that they could use in addressing personal and social family challenges. Entrepreneurship that proactively prepares the family members for an unpredictable world cannot only help to overcome dependence and helplessness but also stimulate the emergence of an enterprising culture that value creativity, income generation, self-efficiency and self-employment. It is against this background that the study sought to find investigate managing family financial resources in a period of economic meltdown.


Statement of the Problem

            The management of financial resources is an important factor in the period of economic meltdown. This is because it provides a solid guide in proper costing of family activities and spending thereby avoiding waste in expenditure. However, financial management in Nigeria in recent time has witness a number of challenges since the emergence of economic meltdown.  

             The current economic meltdown though alleged to be a global problem is more felt I developing countries Nigeria inclusive. This has greater adverse effect on the standard of living of people, increased unemployment rate, low savings and over dependency on others. The problem of this study therefore is to find out how family financial resources could be managed in the period of economic meltdown.

Purpose of the study

The main purpose of the study was to investigate managing family resources in a period of economic meltdown. Specifically, the study sought to:

1.         Identify ways for managing family resources in the period of economic meltdown.

2.         Determine the influence of economic meltdown on family resources.

3.         Ascertain ways for improving the management of family resources in a period of             economic meltdown

Research Questions

1.         What are the ways for managing family resources in the period of economic meltdown?

2.         What are the influences of economic meltdown on family resources?

3.         What are the ways for improving the management of family resources in a period of       economic meltdown?  

Hypotheses

            The following null hypotheses were formulated at 0.05 level of significance guided the study.

HO1: There is no significant difference in the mean ratings of Christian men and Christian women association members on ways for managing family financial resources in the period of economic meltdown.

HO2: There is no significant difference in the mean ratings of Christian men and Christian women association on influence of economic meltdown on family financial resources.


Methodology

            This research was a descriptive survey aimed at investigating the management of family resources in a period of economic meltdown in Ado Education Zone of Benue State. This Zone comprised Ado, Utonkon, Apa, Ulayi, Agila, Igumale and Ekile.

Population of the Study

            The population of the study comprised 591 respondents, made up 300 Christian men and 291 Christian women association member. The respondents were chosen in order to ensure that those used for the study were sufficiently knowledgeable about the variable under study and could supply useful information on the research instrument.

Sample and Sampling Technique

            The entire population of 591 men and women Christian association members was used for the study. The entire population was used because the figure could be fairly managed hence; there was no sample and sampling technique adopted.  

  

Instrument for Data Collection

            The instrument for data collection was a researcher\' developed questionnaire titled 'Managing Family Resources a Questionnaire (MFRQ). A-twenty-one (21) item survey instrument was structured on a 4-point rating scale of Strongly Agree (SA), Agree (A), Disagree (D) Strongly Disagree (SD). The items were developed through information obtained from literature review and was based on the three research questions. The items elicit information on managing family financial resources in the period of economic meltdown.

Validation of Instrument

            The instrument was face validated by three experts, one from Adult Education, Educational Administration and planning, Measurement and Evaluation, University of Nigeria, Nsukka. The comments and criticism made by the experts shaped the focus of the study.

Reliability of Instrument

            The validated instrument was trial tested outside Ado Education Zone of Benue State with families that possess the same characteristics. This was done to ensure the reliability of the instrument using Cronbach alpha method. The result of the co-efficient was 0.69. This shows that the instrument was reliable and could measure what it was suppose to measure.

Procedure For Data Collection

Three research assistants were trained on how to distribrute the instrument and also collect data for the study. The data were collected after the respondents responded to the distributed research instrument.

Method of Data Collection

            Data collected were analyzed using mean and standard deviation for the three research questions. The two null hypotheses were analyzed using t-test statistical analysis. The null hypotheses are rejected if the t-calculated is equal to or higher than table value. Items of the research questions with mean score of 2.50 and above were regarded as accepted while item with a mean score below 2.50 were rejected.

Result

            The results are presented according to the research question and hypotheses that guided the study.

Table 1: Mean responses on Ways for managing Family Resources

         Ways for Management                              SD        Dec                   SD        Dec

1       Adequate financial budget               2.59       0.80       A         2.73       0.82       A

2       Prudent financial planning                3.04       0.86       A         3.43       0.92       A

3       Avoid unnecessary expenditure       2.94       0.94       A         2.64       0.81       A

4       Encourage joint savings                   2.56       2.80       A         2.59       0.80       A

5       Planning of income and expenditure  3.41       09.2       A         2.83       0.79       A

6       Investment of business ventures        2.80       0.83       A         2.56       0.80       A

7       Efficiency in management                 2.77       0.83       A         3.11       0.87       A

8       Financial accountability                    3.04       0.87       A         3.27       0.90       A

         Grand mean                                  2.89       0.85       A         2.89       0.83       A

Table 1 indicates the response of the respondents on ways for the management of family financial resources. A look at the table revealed that items 1 8 are rated with mean score of 3.14, 3.04, 3.04, 2.94, 2.80, 2.77, 2.59 and 2.56, and by Christian men. Christian women rated the same items with mean ratings of 3.43, 3.27, 3.11 2.83, 2.73, 2.64, 2.59 and 2.56 respectively. The table revealed that the respondents accepted the items on the table as ways of managing family financial resources in a period of economic meltdown.

Table 2: Mean Responses on Influence of Economic meltdown on Family Resources

Table 2: Mean Responses on Influence of Economic meltdown on Family Resources

         Ways for Management                          SD        Dec              SD        Dec

9       Poverty in the family                                  3.66       0.95       A         2.91       0.84       A

10     Over-dependency on others                      2.74       0.82       A         2.71       0.81       A

11     Problem of ill-health                                  2.91       0.84       A         3.46       0.92       A

12     Low standard of living                               3.47       2.92       A         2.86       0.84       A

13     Money chasing few goods (inflation)          2.59       0.80       A         3.41       0.92       A

14     Inability to meet economic needs               3.47       0.92       A         2.71       0.81       A

         Grand mean                                            3.14       0.87       A         3.01       0.85       A

            Table 2 presents the opinion of the respondents on influence of economic meltdown on family resources. Item 9-15 are rated with 3.66, 3.47, 3.47, 2.91, 2.74, and 2.59 by Christian men association. Christian women association rated the same items with mean score of 3.46, 3.14, 2.91, and 2.71 respectively. The respondent agreed with all the times presented on the table as influence of meltdown on family financial resources. This implies that all the items on the table influence family resources in a period of economic meltdown.

Table 3: Mean responses on ways for improving the management of family resources

         Ways for Management                     Х           SD        Dec     Х           SD        Dec

15     Enhancing creativity                              2.91       0.84       A         2.56       0.80       A

16     Inculcate skills for self reliance              3.01       0.86       A         2.74       0.82       A

17     Creation of employment                       2.56       0.80       A         2.59       0.80       A

18     Being actively employed                       2.94       0.85       A         3.91       0.98       A

19     provide means of generating income     3.04       0.87       A         3.44       0.92       A

20     Provide skill to manage capital             2.56       0.80       A         2.96       0.86       A

21     Ability to invest                                   2.66       0.81       A         2.97       0.85       A

         Grand mean                                      2.81       0.83       A         2.97       0.85       A

            Table 3 reveals the views of the respondents on ways for improving the management of family financial resources. Christian men association rated items 15-21 with mean score of 3.04, 3.01, 2.94, 2.91, 2.66, 2.56 and 2.56. Christian women rated the same items with mean score of 3.44, 3.91, 2.96, 2.74, 2.59 and 2.59 and 2.56, respectively. The highlight of the table indicates that the respondents agreed with all the items on the table as ways for managing family financial resources in a period of economic resources.

Hypothesis One

            There is no significant difference in the mean ratings of Christian men and women on ways for managing family financial resources.

Table 4: Summary of t-test analysis on ways for managing family financial resources.

S/N    Source                   N         Х         SD       Df        t-cal        t-val      Lev      Dec

1        Christian men          300      2.89     0.85                                                         

                                                                       589      0.53        1.96       0.05           Not Sign.

2        Christian women      291      2.89     0.83                                                         

            Table 4 indicates that the calculated t-value of 0.53 at 589 at degree of freedom and at 0.05 level of significance is less than the table value of 1.96. since the t-calculated value is less that the table value, the null hypothesis is accepted. Therefore, there is no significant difference in the mean ratings of Christian men and women on ways for managing family financial resources in period of economic meltdown.

Hypothesis Two

            There is no significant difference in the mean ratings of Christian men association and Christian women on influence of economic meltdown on family financial resources.

Table 5: Summary of t-test on influence of economic meltdown on family resources.

S/N    Source                       N         Х         SD       Df     t-cal      t-val    Lev.    Dec

1        Christian men              300      3.14     0.87                                                 

                                                                                589    0.58      1.96    0.05    Not Sign.

2        Christian women         291      3.01     0.85                                                 

            Table 5 reveals that the calculated t-value of 0.58 is less than the table value of 1.96 at 589 degree of freedom and at 0.05 level of significance. Since the table value is higher than the calculated t-value, the stated null hypothesis is accepted. This implies that there is no significant difference in the mean ratings of Christian men and Christian women with regards to the influence of economic meltdown on family financial resources.

Discussion

            From the result of the data analysis made, it is obvious that there are similarities between the responses of Christian men association and Christian women association. The result of research question one indicated the ways for managing family financial resources to include financial budget, prudent financial planning and efficient financial management. The findings are in line with Ogbonnaya (2000) who opined that financial budget and effective planning reduce cost thereby avoiding waste in expenditures. The finding shows that effective financial management could lead to the achievement of family goals and desires in a period of economic meltdown. The result from the respondents agreed with the hypothesis made that there is no significant difference between the mean ratings of Christian men association and Christian women association with regards to ways for managing family financial resources in a period of economic meltdown.

            The major findings on the influence of economic meltdown on family financial resources shows low standard of living, inability to meet family demands and high level of poverty. This finding was in line with the findings made by Akinwumi (2008) who revealed that the influence of economic meltdown are attributed to unemployment corruption in the society and low services. This implies that economic meltdown has much influence on family finance because of the inability of the family to access funds that could be used to improve the living conditions of the family. The result of the analytical findings is in support of accepting the null hypothesis as stated that there is no significant difference in the mean ratings of Christian men and women association on the influence of economic meltdown on family financial resources.

            The findings on ways for improving the management of family financial resource in a period of economic meltdown indicates inculcating entrepreneurship on members of the family; encourage savings and enhancing creativity. This finding was in agreement with Nwangwu (2007) who indicated the need for training people in entrepreneurship skills as a functional education to enable family members to be self employed and self-reliance thereby generating income for sustainable living.


Conclusion

            Considering the findings of the study, there is need for managing family financial resources in a period of economic meltdown. This is evident in the finding of this study which indicated adequate financial budget, prudent financial planning and efficiency in financial management. The findings have led the researchers to conclude that enhancing creativity, ability to invest is significantly related to ways of improving the management of family fiancé. It was therefore concluded that low standard of living, inability to meet family demand and high level of poverty are the major influence of economic meltdown on family financial resources.

Recommendations

            Bases on the finding the following recommendations were made bearing in mind the need for managing family financial resources in a period of economic meltdown.

1.                  Government and financial institutions should provide Nigerian family with micro-finance to enable them invest in business transaction for income generation.

2.                  Corruption syndrome should be tackled and address properly by the government of the day. This could help reduce the problem of unemployment.

3.                  Self-employment opportunity should be created by the government and private sectors for income generation.

4.                  Entrepreneurship education should be made compulsory for all students at all levels of the education system in Nigeria.

5.                  Government should assist family with resources to reduce the influence of economic meltdown on families.

References

Association, T (2010), 'The concept of the family: demographic and genealogical perspectives' The Official Journal of the North Carolina Socialogical Association 2(2) 1-9

Orlov, Dmitry (2008), 'Reinventing Collapse: The Soviet Example and American Prospects', New Society Publishers, ISBN 0-86571-606-4

Schiff, Peter; Downes, John (2011), 'Crash Proof 2.0: How to Profit from the Economic Collapse', ISBN 978-1-118-15200-3

Stuart Slater (2000), 'A Guide to Turnaround Management', InConsult research and Corporate Recovery, Sydney NSW, 2000

Nwangwu, I.O. (2007), 'Entrepreneurship in education .concepts and constraints', African Journal of Education and Development Studies 4(1) 196-207.

Silvia Gherardi et al (2008) 'Family Enterprise and the Development of Entrepreneurial Skills', Italo Trevisan, Stefania Parrello (Department of Computer and Management Sciences), Belenzani 12, 38122 Trento (TN), Italy.

Article Source: http://www.articlesbase.com/personal-finance-articles/economic-meltdown-strategies-in-managing-family-financial-resources-6628111.html

About the Author

Dr. Ugomma Ebirim

Ph.D in Adult Education, University of Nigeria

Lectures in Department of Adult Education, Faculty of Education, University of Nigeria

Phone: 234 803 495 1563



Consent of the original author

Loading...

Home