Research shows that when families lack adequate income and assets, they face hardships including hunger, living in substandard housing, and untreated illness. These hardships are especially harmful for children, who are more likely to experience long lasting negative outcomes in the areas of health, social and emotional development, educational attainment, and employment.
What are the Key Elements of Family Economic Success?
Family economic success is similar to business economic success. The evaluation of a business’s financial health looks at two core financial reports, the income statement (profit and loss) and the balance sheet (net worth) with four basic elements:
Income (Financial Resources) must be at least adequate to provide for basic human needs. Increasing household financial resources through employment and income support will enhance family economic success.
- Expense (Costs) reflects the spending needed for necessities. Household costs for basic goods and services (including the expenses associated with working) are directly related to family economic success.
- Assets are savings, other tangible assets (such as a home), and human capital (such as a college degree). Building household assets increases net worth and will improve family economic success.
- Liabilities (Debt) occur when income falls short of expense and directly impacts family economic success.