An economic crisis, such as a downturn in the markets or sudden unemployment, is an ideal time to teach your children some valuable money management techniques. If you follow the five tips below, you may be able to turn your financial disaster into a positive lesson about money. Your family should feel reassured and may be able to help you to get through these hard times:
1. Consider having a family money meeting to discuss issues such as kids’ allowances and how much will be spent on birthday gifts. Instead of making children feel deprived, such conversations help them feel as if they are part of the solution. Frequently, if presented with the facts in a calm manner, children will astonish their parents with a desire to help: they may volunteer to do the gardening instead of a gardener or make pizza instead of ordering take-out.
2. Give your children the ability to make choices within the process of saving more money. One family I know gave their children a choice: they could either continue with their weekly household help, or the children could take over the cleaning, and then with the money saved, the family could take a modest vacation. Which do you think they chose? While there was occasional grumbling, the family benefited from teamwork and the motivation of working toward a goal.
3. Even if you are worried, try not to show it too much. When you speak with your family about finances, be careful to give the facts, and reassure them that you will take care of them. That way, they can deal with the situation without panicking.
4. Keep things in perspective. No matter how hard the current economic crisis may be affecting you, realize that others are in a worse position. Even if things look bleak, count your blessings. While money is a necessity, remember the really important things: your health and your family. If you need some perspective, volunteer in a soup kitchen or other charitable organization.
5. If you’re depressed about your finances, take charge of the situation. Write down your expenses, create a budget, and establish a financial plan. Taking concrete steps can show you how small savings add up to put you in a better place.
While fixing the global economy is beyond your control, it’s within your power to focus on what resources you have to best meet your family’s needs. And with a little perspective, positivity, and cooperation, you should be able to get to the other side.
Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.