The household as an important economic unit is able to influence the economic development and social welfare of the state. Despite the fact that the topic is researched by many scientists, the rapid pace of changes in the world caused by globalization, technological innovations, and social transformations creates the need to improve the understanding of the theoretical essence of households. The article aims to substantiate the theoretical and conceptual foundations of the functioning of households as an important economic unit aimed at satisfying life needs and managing financial resources. The article examines the role of the household in the economic system as an important economic unit that unites members to meet life needs and use financial resources. The economic essence and content of households, namely their economic aspects and functions, are revealed. The historical path of the development of this concept is highlighted, the key moments in the evolution of the understanding of the household as a financial unit are indicated. The views of various economic schools on the role and essence of the household are analyzed. The notable role of the households for the socio-economic development of the state in the conditions of market relations is emphasized. The problem of the essence of the household as an institutional component of the economic system is outlined. The difference between the concepts of household and family is distinguished, analyzed, and clearly structured. Households are considered as entities that have a strategic and tactical purpose. The classification of households according to various characteristics, such as territorial location, size, and participation in economic exchange, is systematized. The importance of understanding the financial aspects of a household, such as resources, income, expenditure, and savings, which reflect its economic stability and ability to meet needs, is justified. Emphasis on the relationship between consumption and savings reflected in the household income equation is outlined. As a result of the conducted research, through a thorough analysis of classification features, financial aspects, and the relationship between consumption and savings, the understanding of the importance of the household in the economy and society is expanded. 

household, household finance, household income, household expenditure, financial activity, household functions, financial resources