Financial
Counseling and Planning
The Journal of the Association for Financial
Counseling and
Planning Education
Volume 14 (2), 2003
Deterministic and Fuzzy
Simulation of
Household Financial Planning
Long-term household financial planning requires
flexible, realistic financial planning instruments. This study focuses
on the
simulation of expenditures for discretionary and nondiscretionary goods
and
services and the incorporation of uncertainty into a long-term
financial
planning model. Particular emphasis is given to German financial
planning
literature and consumer expenditure data sets. Simulation of typical
household
situations illustrates the effects of family and career planning as
well as
fuzzy financial data on the amount and crispness of the periodical net
surplus.
These deterministic and fuzzy simulations are found to be more flexible
and exact in predicting household
expenditures for different household compositions.
Key words: Financial
planning, financial decision-making, simulation, consumer expenditure
survey,
fuzzy set theory
[1] Cäzilia
Loibl, Consumer and Family
Economics
Specialist, University of Missouri, Ironton, MO 63650, phone 573-546-7515, fax 573-546-0439,
e-mail: loiblc@missouri.edu.
Research supported
by Department of Household Economics, Technical University of Munich,
Germany,
and Department of Human Development and Family Studies, Iowa State
University.