Ministry of higher and secondary special education of the republic of uzbekistan tashkent institute of finance

4. Financial decisions made by households

Answer: A household is an economy entity that is run by one or more people (relatives or not) living together and making various activities, as a result of which financial resources and income are generated and used, and has a common budget. Household finance is a set of money relations about the formation, distribution and use of money funds in which the household and its individual participants enter in the process of their socio-economic activity. Types of financial decisions of households:1.Decisions on the consumption and saving funds. 2 investment decisions 3 financing decisions. 4 decisions related to risk management. Decisions consumption funds available wealth of the family can be spent on consumer needs. Decisions saving funds current income should be saved for future use and spent on saving. Investment decisions financial instruments you need to invest your savings in order to receive income. Financing decisions when and how should a household use borrowed funds to realize consumer and investment plans. Decisions risk management how and under what conditions should households try to reduce level of financial uncertainty.

Examples: I will buy so many books and open my own library. I have 10 million sums for invest in my business. I will take a loan from my relatives. I am afraid to pay more for the oil. I bought Spark instead of Captiva