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Tips For Managing Family Financial Crises

No matter how well you plan to take care of your family, there may be times when you find yourself facing financial difficulties. It could be the result of what will ultimately be a positive change, such as one parent going back to school or starting a business. It could be something negative that triggers the crisis, such as job loss or illness. Whether money problems are the result of good or bad changes, they can be stressful, but there are also ways to meet the challenge that will strengthen your family.

Assess the Situation

The first thing to do is realistically appraise the situation. How you proceed will vary based on whether you are facing an immediate emergency, such as not having money for your next rent or mortgage payment, versus a job-loss that comes with severance pay and thus gives you a few weeks or months to plan. This assessment can also help you manage any panic. Try to think about the problem in a concrete way. “I’m worried about how I’ll pay next month’s rent” is a good way of specifically stating a problem as opposed to letting your thoughts spiral into worries like “I’ll keep falling behind and never be able to catch up with my back rent.”

Brainstorm Solutions

Assessing your situation and stating the problem clearly will help you with this next stage. There might be a number of different ways to get some more money. Can you or your partner pick up some gig work or a second job? If you own instead of renting, you might look into a home equity line of credit. A guide can make your financing options clear and help you learn what to expect for interest and taxes. Another solution could just involve talking to people. If you’re going to miss a payment, reach out to the creditor first and see if you can find a solution. Your family could also be eligible for programs that could offer help with bills, groceries or other expenses.

Involve the Family

If you’re going to be cutting back on the budget for a few weeks or months, this can be a good time to get your kids involved. You should make sure they aren’t worried about the basics, like food and shelter, but you can explain that money is going to be tight for a while. They could help you cut out coupons or with decisions about how to spend the family’s reduced entertainment budget. This can actually be an empowering experience for them because they can feel like they are helping out by participating in some family decision-making. It can also be an opportunity to teach them more about budgeting.

Helping Children Through It

In some cases, children may feel the situation more acutely. For example, you might have to take them out of daycare or an activity that they enjoy. If this is the case, work on finding a replacement activity that is free or low-cost. If your children are nearing college age, work with them to find ways to pay for college, such as applying for scholarships and financial aid. They might also want to get a part-time job to put away some money for college or so that they have a little money of their own to spend.

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