Fashion Statement

How to Manage in Financially Unstable Times

Image by Fotolia
Image by Fotolia

After reading the papers and being bombarded by the news on the world’s financial situation, I just had to add my two cents in on how we need to manage our personal finances so we can meet the needs of our own and of our families. 

I found the following hints helpful to me.  Start by making a budget.  Literally, write it down – listing your income then your expenses.  Remember, list only your true expenses.  To determine true expenses, ask yourself whether this purchase is really essential.  If not, leave it off and move on to the next item.  Under expenses, don’t forget to list savings – more on this later.  The budget need not be adhered to rigidly.  It is a guideline, not a whip.

Now regarding savings, continue a reserve fund or savings account no matter how small the deposits are.  They add up.  Many experts advise families to have an emergency fund with at least enough money to cover a six month period.  This will come in handy in case of a layoff or job loss.

Lower your consumption.  Do you need to eat out every day?  That extra latte?  Can you car pool?  Or can you walk to your destination even?  All entertainment should be cut down to a level that the family can comfortably live with.  Decrease credit card debt.  We all know that in this society, credit cards are a necessary evil.  Experts are advising; however, that we use credit responsibly. 

But what if we get laid off or let go?  The first thing to do is not panic.  I know, easily said.  But where is panic gonna get you?  At the most a headache and loose bowels.  Try to think of this as a chance to get into a different type of work, for the family to work more as a unit or to gain internal strength.  I’m reminded of a couple of news reports where persons were making over six figure incomes previously and now one works as a shoe shine boy and the other at Starbucks – both are reportedly happy and content.  What was the difference in these individuals?  Did they panic?  Initially, no doubt they did.  If I made a six figure income last year and was given the pink slip, you better believe I would go into shock!  But when the initial shock wears off, the thinking person would assess the situation and work at it proactively, humbly and consistently.

OK, but you have this great degree from MIT and there’s no job to fit your skills.  What do you do?  Do what you can to make an honest living.  Can you teach?  You may have to obtain a blue collar job for the time being.  Nothing wrong with that.  All that’s required is a little humility.  Don’t let your self esteem diminish just because your job went out.  You are still you – a great person.  Keep at it.

Ultimately, adversities like these strengthen us individually and collectively as families.  Openly communicate what’s going on with your children on their level.  Kids are amazingly resilient and understanding.

So in conclusion, when’s the financial crisis going to end?  Who knows?!!  All we can do is adjust to any changes by cutting back and living below our means.  In the end, this will enable us to continue to care for our families and ourselves.



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