A budget process variable is developed to address three research questions con cerning family cash‐flow management: (1) how frequently is the formalized cash‐ flow budget used, (2) what are the characteristics of those families who tend to use it, and (3) what are the potential benefits associated with the use of a formal budget. The distribution for a formalized budget variable is reported for a repre sentative sample of Iowa families. The distribution is skewed with a dispropor tional large group of households reporting little, if any, formalized planning. Compared to informal planners, formal budget planners are more likely to have the following characteristics: younger, more years of education, two‐spouse households, and high circumstantial demands. Preliminary evidence suggests that benefits like increased wealth accumulation over the long run may be more important than immediate benefits like current satisfactions. A question is raised about the conventional assumption that families typically use a formalized or “normative” budget process.

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_During the second half of the 20th century, the level of living for most American dramatically improved over the level enjoyed by their grandparJnts. By almost any standard used, most Americans today should be hnancially weil off. How-ever, there is a lot of data that indicate,s plople are having serious probl-ems managing their hnances. $snkruptcies are at an all time high, so are mortgagi foreclosures.-Consumer debt is breaking records, while savings rates continue to deJline. In spite of many gou".o-"ot transfer programs, the number of Americans living in poverty is not thai iuch better than it was 30 years ago,-with many older Americans joining the poverty ranks. The divorce rate in America is high and researchers .epori that -family financial problems usually play a key role in almost all separations. Most Americans' real income is much higlg. than it was one, two and especiilly three generations ago; so why all the hnancial problems.Americans now live --.11y, p-y years longer than their grandparents, so funding retirement is much more difficult than it was io the past. fhJ quality of medical carE has_vastly-improved during this century, with costs increasing even fister. Before the 1950's only a very small percentage of the population attende-