Finances+for+Families


 * ==Section II--Finances for Families==

__Buying vs. renting a home__ The decision between renting and buying a house can be a difficult one. When college graduates depart from their dorm rooms and take the first step into the real world, this daunting question awaits many. As some believe, the best way to start out is by renting. With buying comes more responsibility as one has to pay mortgage amongst other taxes. Typically, buying a house is more of a commitment and is recommended for those planning on living in that house for at least ten years. This ways, one is able to save more money. The responsibility of owning a house includes payment, upkeeping, and a homeowner is able to make any changes he wishes. If one decides to rent there is payment, no say in the decorations, and the upkeeping is taken care of by the landlord. Nonetheless, the decision between the two can be quite tricky, but fortunately there are tools out their for help.

 The graph above is a good tool one can use when deciding which option is best. By measuring the amount of years expected to live in the home and the expected annual property appreciation rate, one can determine which would save more money.

http://www.youtube.com/watch?v=YL10H_EcB-E Here is a good site to use when deciding between the two. It is a calculator that spits out how much you will spend and how much you will save. Also, it is a government page. http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH

__Choosing a house--cost, commute, schools, etc.__ Choosing a house involves one a very major economic concept: opportunity cost. When shopping around for a suitable home, buyers have to take into account things from schools and commutes to the closest shopping center and neighborhood pools. Every little decision is made by evaluating opportunity cost, by thinking about the trade-offs of one decision versus another.

This article is one woman's take on the issue of buying a house and some of the many things that should be taken into consideration concerning women in general. http://hubpages.com/hub/What_to_Look_For_When_Buying_A_House Other articles to take a look at include: __Home costs--maintenance, insurance, taxes and utilities__ Home costs is pretty self-explanatory. Its everything that goes into owning a home, not including actual house payments. For this section I looked specifically at buying a new home and the immediate maintenance costs associated with it. Here are a couple of good sites to visit if you want to see some specific facts and figures: http://www.money-zine.com/Financial-Planning/Buying-a-Home/Owning-a-Home/ Heres a pretty lengthy video I found... you might just want to skim through it. [| http://www.youtube.com/watch?v=nUBS-0gyeAU]
 * [|http://www.telegraph.co.uk/news/uknews/1561173/Buyers-take-17-minutes-to-choose-a-house.html
 * http://www.mymoneyblog.com/archives/2008/03/housing-search-trade-off-price-vs-commute-time.html

__ D. Budgeting for families __
‘Budgeting for Families’ is a method for developing an idea of where resources of a family should be distributed; how much should be spent on food, clothing, and amenities per month to maintain a steady amount of cash to avoid financial disasters.

http://www.grandparichardskids.com/budgeting-for-families.pdf http://www.mvelopes.com/articles/family-budget.php http://www.epi.org/content.cfm/datazone_fambud_budget http://www.learnnc.org/lp/pages/BethCarroll7292002117 http://www.economist.com/daily/news/displaystory.cfm?story_id=11325709
 * Resources on Family Budgeting:**



Budgeting can be stressful especially if it's an unfamiliar tactic to families. However, the money saved on budgeting from eliminating luxury items and unnecessary spending can be put towards something that can generate residual or passive income such as stocks. The consequences of not allocating your financial resources properly can lead to a financial disaster that will not only affect you but all parties that depend on you. By using a budgeting method, a financial nightmare can be thwarted. **2.** Examples of the necessity of budgeting:
 * 1.** **Tips and Suggestions** - With prices on the rise, American families have reached crunch time for developing an effective budget to maintain present and future financial stability. However, there are options available to keep families on top of their finances. Below are some of the many options presented in Grandpa Richard's Kids pdf file presentation and the Mvelopes article on family budgeting as well as the Economic Policy Institute's Budget Calculator.
 * Turn off lights when not at home.
 * Keep track of each dollar spent - this way you can determine what places you are making unnecessary purchases and you can be on alert when shopping there.
 * Using energy-saving appliances such as EnergyStar.
 * Turn off computers and printers when not in use.
 * Buy food that is on sale.
 * Buy your groceries in bulk so you can distinctly remember the final sum of your purchases without having to go back and forth making separate purchases that could wind up costing you a small fortune.
 * If you aren't sure how to create a family budget, get outside help. You can use the EPI Budget Calculator of Mvelopes.
 * Get the whole family involved in the budgeting plan; make sure everyone knows the value of a dollar 

A) In Chicago, grocery prices are on the rise. Prices have gone up to the point where families are spending extra money on food while their incomes aren't going up to match it. Some families have ended up spending $400-$500 extra per month without changing any of their purchases. According to the Department of Agriculture, the consumer price index has increased 4.5 percent from March 2007 to March 2008. By using budgeting here, families may be inclined to plant their own vegetable gardens (in areas of the country where that is feasible, naturally) or to buy more sale food items. Plenty of fresh, raw foods are purchased and gone to waste without being eaten let alone touched by the consumer. Keeping track of food purchases is one of the many keys to not over-spending on food and keeping in touch with rising food prices.

B) Falling house prices can become troublesome in several ways. If your family is moving to another city and you are truly to sell your house, beware of the notion that you may have to sell for less than you intended to. Below is Ben Bernanke's map using figures from the Office of Federal Housing Enterprise Oversight (OFHEO). This demonstrates, using color-coded areas of the most and least affected regions, the price change in houses.


 * Source: The Economist**

As demonstrated, there are many problem areas regarding the change in house prices. By budgeting, families may be able to save a little extra cash to prevent a catastrophe in the event that their house may sell for less than its worth. Luckily, there are many areas that are not suffering as badly.

__Having children--will both parents continue working?__

The question of whether both parents work after having children is a timeless one. As our economy has grown, so has the number of services that are available to help with child-rearing. However, many parents object to this "outsourced parenting", citing its potential harm to the children's development and behavior.

Economic Standpoint
The economic benefits of still working after having children is a question of opportunity costs and comparative advantages. As described in http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/01.htm, it is more efficient for families to remain specialized in their respective careers and to leave the child development to the "professionals". The article also points out that this efficiency has increased many fold in the past years because of recent increases in the value of women's human capital. Since the women are able to earn more for their families, their value as a homemaker has severely diminished.

Personal Choice
However, the economics of child-bearing is just as amoral is the rest of the dismal science. It fails to look at the personal aspect of child-rearing and how this may affect a parent's choice to return to work or not. In the article http://www.revolutionhealth.com/healthy-living/parenting/top-concerns/child-care/choice-moms-face, the author explores this individuality of choice and how certain decisions have an impact on the parent's choice.

Hidden Costs
The article above also discussed the "hidden costs" of working with children and not doing so. The graph below is a more obvious indication of this idea. It shows that unpaid household work and childcare can amount to anywhere from 33 to 50% of a parent's daily workload. It is interesting to note that the ratio of unpaid to paid work was especially high in younger women, indicating a higher propensity to stay home and care for the children for this demographic.



Effects on the Child
Throughout all of these discussions is a single, resounding argument: the effect that working parents has on children. While there are hundreds upon thousands of articles that discuss this aspect of child-rearing and work, http://www.drspock.com/article/0,1510,5756,00.html gives a sound example of how tiny changes in the familial structure can induce serious complications in a child's life. How does this relate to the economic side of this question? Like the previous section, this idea represents one of the effects of working parents that economics fails to take into account.

For more information on both the economic and social arguments for and against working parents, you may wish to look at some of the six books outlined in http://www.upjohninstitute.org/publications/titles/ewf.html. These books discuss everything from government rolls in childcare to labor markets. Not quite light reading, but both interesting and applicable.

__Public vs. private school for K-12 **(**__Lane Aldredge)

=**__Public vs. Private__**=

=**__Articles__**= =__**Reasons**__=
 * The main difference between Public and Private school is that public schools can't charge tuition and private school does. Public schools are funded through federal, state and local taxes. Private schools do not receive tax revenues, but instead are funded through tuition, fundraising, donations and private grants.
 * ===http://www.greatschools.net/cgi-bin/showarticle/ca/197===
 * ===[|http://www.browardschools.com/info/education.htm]===
 * ===[|http://www.publicschoolreview.com/articles/]===

>
 * Deciding between Public or Private school all comes down to if you want your kid to learn in a very good environment and if you want to pay the money for the tuition. Studies have shown that kids in public schools will sometimes do better than kids in private schools but kids in private schools will be in a better learning environment and they may learn more.
 * Because private schools do not receive funding from the government, they have considerably more freedom in determining their curriculum. Public schools are obligated by law to follow governmental statutes concerning policy, procedure, and curriculum.
 * Private schools are not legally required to admit everyone that applies. Public schools must admit everyone that is districted to attend the school. Due to this, some private schools may become very selective, which would make its attendees more prestigious, creating more opportunities for undergraduate education at top universities. In some cases, a more prestigious undergraduate school can lead to more enticing job offers in the future. This can lead to improved economic health for the offspring of parents that choose to enroll their students in private schools, trading off immediate capital (money for tuition) for later profit (their child making more money because they got into a better university and succeeded).
 * Although, private school costs alot of money and not everyone is admitted, the education that the student will gain and the environment they will learn in is alot better than a public school. Some families don't have the oppurtunity to have their kids go to private school which is the main reason why kids don't attend these schools.
 * When it comes to teachers and their salary, private school teachers earn less buy they are able to teach in a better environment and whenever they need help they are given assistance. On the other hand, public school teachers are paid more but they have to deal with more violence and they are not given much help.
 * Below are some graphs and pictures that may help families decide:
 * http://youtube.com/watch?v=zhD6nO1T1wg, here is a video taken from a news show in Sacremento talking about Private Schools