Family Financing: The Importance of Communicating During Financial Hardship

When faced with financial hardship, many individuals attempt to hide their emotions in order to shield their family from the increased burden. However, what may begin with good intentions often creates even more hardship on the family. Parents under high amounts of stress may be less engaged with their children or react more harshly over small things. Peggy Olive, a Financial Capability Specialist from the University of Wisconsin, says, “It is important to remember that children sense the tension in the family and may feel less secure, but don’t know what to do about it”. Problems in the home only adds more stress to an already stressful situation. What can be done to bring stability to the family?

The solution depends creating open channels of communication within the family.

Regular family money meetings can help divide the stress of the financial burden into more manageable challenges. Open communication between older children and parents can help determine collaborative solutions to managing the family finances. Additionally, young children could be educated on the differences between wants and needs, and how family financial decisions are made. Family meetings may need to become more frequent during times of financial stress and other hardships. These meetings can be used to set attainable family goals and determine alternate activities for cutting back on back on spending. Finding inexpensive alternatives to family activities can help keep the brunt of the hard times from falling on any individual.

Difficult financial decisions can also be solved through collaborative family research into available financial support programs. Staying in contact with lenders is a good way to work on creating a realistic payment plan before the family falls behind. “This means that you have done the math and know that you can meet your basic needs, while doing the best you can to meet your financial obligations to your creditors”, says Olive. With the collaborative support and effort of the whole family, financial hardships will not seem insurmountable, and the situation will become less stressful for all involved.