I get many opportunities to counsel families with their financial situations often. Many times, these families that come to me often have late payments on their cars, insurance, mortgages or rent. They often come very distraught not knowing what to do. I act as a third-party advisor to many of them. In the midst of the storm and often with limited funds, it can be very challenging to see what are the priorities. Most of these families lost their jobs, or are not making enough when compared to their previous jobs where they came from.
In these sessions, we go through their household budgets, evaluate their income and understand what happened to get them here. Often times, I have to tell them that they cannot afford this or that. Yes, I'm the BAD GUY.
What makes my heart break most is that whenever it comes to their children and their "needs" - they are protective. Some continue to think that private education of $12K per year is necessarily in a looming foreclosure. Some feel guilty that they didn't take their children to the waterpark this Summer because they didn't have discretionary funds. Some insist that their children need a whole new set of school clothes because they feel guilty that their children get hand-me-downs.
It is so easy as observers to see a clear difference on what action needs to be taken. It is so hard to have to do them.
What I continue to tell these parents are that they do not need to hide their financial situation from their children (age appropriate, of course). It is no point that parents try to buy, buy, buy and spend, spend, spend when they cannot make the electric bill payment and lights are on the verge of being cut off.
There must be a clear sense of priority: Food --> Utility bills --> Roof over your head --> Transportation
Food is also a touchy-feely subject. Food means food that keep the family on a survival mode, not potato chips and sodas for snacks. If families are in that "emergency" mode, then they really need to start "thinking" in an emergency mode.
Utility bills to make sure lights, water and gas are kept on. Be energy concious too. You may not need to have the a/c set at 74 degrees. Push it up a few notches.
Roof over your head - Mortgage or rent payments are important. Your family needs a place to sleep at night. But this payment should be kept minimal up to approximately 25% of your take home income.
If you are notified of a pending foreclosure, do not move out of the house until you have to. By then, you may need to save up as much money as you possibly can for your pending move and deposit at your next home.
Transportation - This includes your car payments, gas, car insurance and make sure your tag, registration and inspection are up to date. Most of the time, here's where most people could go without a car payment. Here's also where I hear alot of "excuses" unfortunately.
The gist of this post is this:
Don't ever feel guilty for having your children "stuck" with your financial situation. Explain to them - age appropriately and give them the opportunity to grow financial muscles for their own future. It is not a bad thing that children have to go back to school with last year's back pack, last year's shoes and clothes. It is not a SIN.
If parents give their children the opportunity to walk this together as a family, I know they grow up appreciating the things they will have in the future. What is so cool about everything that's handed to you with a silver spoon?
My daddy was so poor that my grandma could only afford meat once a week. The rest of the time, my daddy ate rice over soy sauce and potatoes because that's all his parents could afford. My daddy never blamed his parents. But in fact, it taught him to take care of his family when he had one. Sure, my daddy ended up sending me to ballet and piano lessons - because he never had that as a kid. Growing up, I "hated" these things because I felt it was a waste of my time. 20 years later did I realize that these are skills my daddy equipped me with now and I can teach my son how to play the piano. I also never appreciated my mom staying at home with me because I felt she constantly nagged me. Little did I realize how much sacrifices my mom had to endure because she didn't have a paid job, she didn't buy for herself and she always bought us stuff. Now that I stay at home with my son, I finally realized the price my mom had to pay.
Look at my daddy. He looks like he never went without and now at 58, he is having a time of his life travelling the world and enjoying time with his 2 grandsons.
Parents - Don't ever live with that guilt. You know you did your best. Children can go without alot of things. What they cannot go without is the family unit.
Have a clear mind of what needs to be done. The kids WILL survive.
