Family and Household Resource Management
This domain tests how families identify needs and wants, allocate limited resources, and evaluate outcomes. Expect budgeting calculations, decision-making models and questions about values, goals and the family life cycle.
Resources and values
- Human resources: time, energy, knowledge, skills, creativity. Non-human: money, goods, equipment, community facilities.
- Values drive standards, which drive goals. Goals work best when specific, measurable and time-bound.
- Each decision carries an opportunity cost - the next best alternative given up.
The management process
Deacon and Firebaugh's sequence: identify the problem and clarify values → set goals → gather information and list alternatives → weigh consequences → decide → implement → evaluate and revise. Marks are usually lost at the evaluation stage, which candidates omit.
Budgeting
- Distinguish gross from net income, and fixed from variable expenditure.
- Annualise irregular costs (insurance, school expenses, vehicle licences) by dividing by twelve rather than ignoring them.
- A budget is balanced, in surplus or in deficit. An emergency fund of three to six months' essential spending is a standard benchmark; credit should be judged by APR, not by monthly repayment alone.
Worked example
Net household income €2,100 per month. Fixed costs (rent, utilities, loan, insurance) €1,180; variable costs (food, transport, clothing, leisure) €740. Surplus = €2,100 − (€1,180 + €740) = €180. A proposed loan repayment of €450 is 21% of net income and would create a €270 monthly deficit. Reasoning: it is unaffordable without cutting a variable category, drawing on savings, or increasing income - so the decision must change, not just the arithmetic.
Traps
- Using gross instead of net pay.
- Omitting annual or seasonal costs.
- Treating all wants as needs, or ignoring the evaluation step.
- Presenting a deficit budget as workable without stating the trade-off.