One of the best life skills I acquired from growing up in a middle-class family is the ability to go frugal as needed. Although I never think of myself as a big spender under any circumstances, knowing that I can cut back comfortably provides peace of mind.
Making compromises to lifestyle and spending can be difficult. But when you can get yourself and your family in the mindset that nothing is permanent you can navigate a tough time with much less stress. Needless to say, if you’re short on money and need to make some compromises, you probably are dealing with other major problems like a job loss, divorce or illness.
So how can you handle tough economic time in your household. Here are a few ways.
Let your family know
Making drastic changes in your lifestyle without explanation can be tough, especially if your children are old enough to see the change, but unaware of the reason. While you probably won’t go into the details of your financial pressures, you can explain the need to cut back. Make sure you are being fair and firm.
For example, you can give a teenage or a pre-teen a choice of keeping one of two extra-curricular activities. But don’t let one keep everything at the expenses of another. Similarly, while you will prioritise essentials like rent or mortgage, food, tuition and the like, don’t exclude something that could be as essential to other family members. A second car could be a great convenience for your spouse and children, for example.
Set a time frame
Major changes are more tolerable when there is an end in sight. For example, if you have lost your job, you can explain that you’d expect landing another job in less than six months. This time frame will help your family members know that the change is not permanent. In some cases, it is hard to make predictions on when things can return to how they used to be, however. Don’t lie. Just explain that you’d do everything you could to return to a financial situation that allows for a similar lifestyle.
Setting a time frame for yourself can help, too. For example, if you’re looking for a job, when will it make sense to compromise and take something that might not appear ideal? Your job search can’t be open. And at some point, you must review your opportunity cost — or the costs of waiting for a great opportunity.
Stay positive
When you and your family are going through times, don’t make little money compromises add to the tension. Many marriages and relationships break down over money issues. Don’t expect yours to be immune. Think of how to replace material things with quality time, communication and understanding. Don’t dismiss others’ feelings or belittle their loyalty to the family if they are upset about having to compromise. Empathy can go a long way.
In addition, be creative. People, especially children, adjust quickly to the new normal. So instead of resenting the fact that you cannot do what you used to do for fun or entertainment, come up with new routine and rituals. All of these efforts are likely to keep you positive, which will help you handle your problems more effectively.
Grow good habits
Try to turn your situation into a learning experience and a teaching moment for your children. Knowing that you have the ability and skills to cut back on your experience is a great source of power. Now you know how to save up for a lifetime vacation or tweak spending to afford a new major expense — like having a baby, getting a degree, or accommodating a spouse’s reduced work hours.
With this flexibility, you will be able to make decisions that are driven by what’s important to you. You are no longer focused solely on maintaining a lifestyle. You can be in charge of your money and how to spend it.
— The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.
Dealing with a money crisis
Keep your family informed
Set a time frame and goals
Stay positive to make changes
Learn from your analysis and budgeting
— R.O.
