Financial satisfaction depends more on your state of mind than on the size of your bank account. That's one conclusion family economist Deborah Godwin draws from her recent comprehensive studies of families and their budgets.

The fact is, net worth has relatively little to do with whether families are satisfied with their lot in life -- or whether they will exercise good budgeting and goal-setting skills.

"Couples must control their attitudes in order to control their financial well-being," said Godwin, an associate professor in the UGA department of housing and consumer economics. "A positive attitude toward cash flow management yields positive results."

Godwin's research, which aims at the heart of family financial behavior, sheds light on how different management practices affect families' financial outcomes and may help shape policies and programs aimed at helping families avoid financial problems.

"As family economists, we want to identify which couples will get into financial trouble and educate them against it," Godwin said.

Behavioral change is important, experts agree, because many families are having increasing difficulty managing their finances. According to the Consumer Credit Counseling Service of Atlanta, more than 40,000 Georgians filed for personal bankruptcy in 1990, an increase of 71 percent in just three years.

"This trend should decline only because of the lower interest rates and improved economy," said Jeff Humphreys, an economist with the UGA Terry College of Business. "Still, if family behavior does not improve, the bankruptcy trend will rise when interest rates rise."

Godwin found that a couple's willingness to manage finances is the most consistent predictor of their financial behavior. In a random sample of more than 250 newlywed couples throughout Georgia, she examined three common aspects of cash flow management techniques: budgeting, financial record keeping and goal setting/analysis.

She discovered that, rich or poor, the same rules apply: Those who think financial management is important, practice it; those who don't, don't -- and are more likely to end up dissatisfied with their finances.

Roughly half the newlyweds in her study practiced budgeting activities such as estimating income and expenses. One-third engaged in record-keeping, which she said is especially important "because it makes them feel confident. Records give us an immediate measure of how we are doing."

Fewer than one-third set goals and analyzed their balance sheets frequently. "But goal-setting is not as easy to measure, so immediate benefits are probably not as easy to see, either," Godwin said.

Families often gauge their financial satisfaction on more than their bank account balance, she said. They may compare their assets to their peers or to their parents at the same age. And though her findings indicate that spending more time on financial management doesn't guarantee a healthier bottom line, it confirms that those who are future-oriented practice cash flow management more than those who concentrate on the present.

Her research also may give scholars good reason to change the advice they offer in books and counseling. Although it is too soon to tell whether her findings can be used to predict financial trouble, it "leads us toward a new perspective in financial education," she said.

"Financial educators need not worry only that families lack financial resources or ability to perform cash management," she said. "We should focus on attitude change as the first step in behavioral change."

-For more information e-mail dgodwin@fcs.uga.edu