With the current crisis going on, we are certainly seeing individuals who are having trouble making ends meet. If you are unemployed or working less paid hours, today’s pandemic is potentially going to have a lifetime impact on your overall finances. For just as many, you are continuing to get paid. You may be working from home or be fortunate enough to have an employer who is continuing your wages even though you are not expected to have the same degree of productivity.
Working or not working right now each has its own set of problems. The uncertainty of children returning or not returning to school is producing anxiety for many. Trying to work from home while managing childcare and/or managing your child’s schooling is certainly not easy. With many families spending far more time together than usual, we have seen an increase in domestic violence on one side and an increase in families sitting down to family dinners for the first time in years on the other side. Many individuals are confined to their homes or rooms in nursing homes and suffering increases in depression and anxiety due to the isolation of being home alone all the time. The constant worry when you are out among people – who is wearing and not wearing a mask, is that person sneezing because of allergies or do they have the virus, what protocols are the places I usually visit taking to make sure that I stay safe and so many more worries running through our heads.
Talking finances – it is a great time to review your finances and make some long-term changes that can improve your financial stability. We are hearing from many they have more money in their checking and savings accounts than normal because they have been required to stay home. I think individuals realize how much “extra money” is being spent typically to fill their time from shopping when you do not really need anything, going out to eat as you run kids or yourself around after work or attending various entertainment events. And – we certainly hope we get to return to doing some of that soon, but maybe with a little more awareness of what we are spending over time.
We have been preaching a family financial meeting to several of you for years and now is a perfect time to start that practice. Our recommendation is – all family members should be required to attend a weekly financial meeting. Even if you are a family of one, this is a great practice to institute. This is a scheduled appointment that is on everyone’s calendar. If someone cannot make that scheduled time, it is their responsibility to get agreement from all for a new meeting time. For Lynn and me, that meeting time is 6:00 pm on Sunday evening. We do not skip it and have found it keeps us working together.
Depending on your children’s age, you may require them to be there for all the weekly meeting or part of it. Letting your children see you actively talking about and managing your limited funds creates the habit for them later in life. As they get older, they get more input. Kids having awareness can stop the constant – “I need this.” When they are younger, being involved might simply be a case of reducing the size of their Christmas list or understanding the need to choose between activities rather than doing them all. When teenagers must start making decisions about car purchases or what colleges to attend, the hope is cost will be part of that consideration.
Since many kids are more technologically savvy than their parents, their participation may open more opportunities online. Listening to these discussions can help children be aware that finances need to be managed and there is no “money growing on trees” in the backyard. You can have them be involved in making some decisions. Maybe giving them the choice of “A” or “B” for vacation or they can choose “A” or “B” after school activity while making them aware of the cost involved.
What do you do during your weekly financial meeting? Below is a list of several activities that I would suggest:
- Ensure that everyone is aware of what basic living expenses cost and both spouses should be aware of how they are paid. Is a check mailed? Does the company come and get the payment through an ACH? Do you use online banking where you send the payment? While one person can be responsible for regularly paying the bills, make sure that information is available if that person is unable to do so.
- What are long-term financial goals and how are you working towards achieving them? Are there major home improvement projects in your future you need to be planning for? Purchase of a home? College education? Travel? Weddings? Purchase of a new car? Other major expenses that need a long-term plan to achieve?
- How does everyone want to spend disposable income, that income remaining after necessities? Vacations? Entertainment? Travel? Eating out? Grandchildren? Extra activities? Having the discussion about what is available and how much each person gets access to versus what is to be available for family activities can help resolve issues before they become major points of contention.
- Review expenses – where can cost savings be achieved? Changing insurance companies? Reducing miscellaneous fees – ATM fees, installment fees, overdraft fees, late payment fees, etc. Review utility bills to find savings – cell phone, Internet, and cable bills all have lots of competition and can result in lower pricing. Shopping at different stores, using coupons, shopping online, and what apps can help save on everyday purchases and major purchases needs to be reviewed.
- Is it possible to negotiate lower interest rates on debt? Refinancing mortgages or home equity loans? Lower credit card interest rates? Are there ways to get the debt paid off faster? How do we avoid incurring more debt?
- Plan meetings to help educate those who need knowledge – terminology, concepts, and basics so that everyone understands and is working towards achieving the same family decisions.
- What is each person worried about when it comes to the family finances? How do you reduce that worry? Have family discussions to make everyone comfortable with the family finances.
- As issues arise – spend the time talking about them. Do you want to loan a family member money who is having financial trouble? Is one partner wanting to change jobs or reduce hours? Do you want to have a baby? What are the thoughts regarding how much to spend at holiday time? Does someone want to go back to school? What does each person consider important?
There are so many more topics. However, there are so many offshoots to these topics noted above. Some of them could take several meetings to discuss. Some of them will need to be repeated each year or several times during your life. These meetings can be whatever you need them to be if it helps everyone understand the family finances better. They are meant to be cooperative and not one person speaking at everyone else.
Everyone needs to know they will be heard to be willing to participate long-term. Having everyone be informed and making joint decisions gives everyone ownership and generally more buy-in for decisions. If you run out of items to review, you could elect to do biweekly meetings instead of weekly. Do not change to bi-weekly simply because you do not think you have the time to do it weekly. For this to be effective, you must commit the time. These meetings can also be an excellent way to pass along your financial knowledge to future generations.