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Family financial health benefits from checkup
By Patti Drapala
MSU Ag Communications
MISSISSIPPI STATE – When fights about money break out in a family, it is time to schedule a financial checkup to treat the problem.
Financial problems can put a terrible strain on family life, said family resource management area agent Susan Cosgrove of the Mississippi State University Extension Service.
“Many people don't track their spending,” she said. “They place importance on convenience, such as eating out and entertainment, rather than basic necessities.”
Others get so stressed out from swimming through an endless sea of bills and borrowing that they ignore other issues that need attention. The pressure builds within this vortex further and drives the family apart, Cosgrove said.
A financial meltdown introduces a new twist into this scenario.
“Couples who can't afford to follow through with divorce have to stay together, and this can lead to more serious problems for everyone in the family,” she said.
The American Psychological Association's 2007 Stress in America survey reported that money and work are the top sources of stress for almost 75 percent of Americans. Even if a family manages to stay together, its members face greater risk of developing depression, anxiety, anger, suicidal thoughts and physical illness. Not even children are spared.
“Children are much brighter than we give them credit for,” said Extension child and family development area agent Carla Stanford. “They often will mimic parents' stressful behaviors, create their own rendition of the problem or withdraw from their parents.”
The downturn in the American economy has created lean times and more financial hardship for many families.
“When families have less money to live on each month because of increased costs, some can't pay all their bills,” Cosgrove said.
Some individuals have altered their spending habits to get bills paid.
“Some couples have a rule that they will not make a purchase over a certain amount without first discussing it,” said Extension family resource management specialist Bobbie Shaffett. “Others have an emergency savings account that can cover from three months to six months of living expenses.”
There are individuals who continue to behave like the proverbial grasshopper in a popular children's fable. Rather than save money and resources for lean times, people spend all they have without considering what they may need in the future.
“Some people foolishly think they have money to spend on payday,” Shaffett said. “Those who have a spending plan usually know that the money is already spent or designated for certain expenses.”
All families have the power to put their finances in good order by going back to the basics of budgeting and frugality.
“Keeping a journal of all spending, including who spends what, is a good eye-opener and can be a guide for changing bad money habits,” Stanford said.
A family budget can ease financial burdens if all family members buy into it as partners. Working together is one key. Establishing open communication is another.
“Children should not be sheltered from the truth if they are able to understand,” Stanford said. “The right dose of responsibility could be just the thing to empower a child and allow him or her to develop a higher level of self confidence that will carry into adulthood.”
The MSU Extension Service has several publications available to families seeking help with their finances. Some suggestions from family resource management specialists include Publication 545 Managing Your Money – A Family Plan, Publication 2398 Financial Fitness – Exercises to Shape Up Your Spending, and Information Sheet 1762 Financial Fitness Checklist.
“Getting back to the basics of understanding the differences in wants and needs and re-establishing family values is a good starting point for families,” Cosgrove said. “Have a financial checkup to get a picture of your overall monetary health. Families can control their financial situation if they plan carefully.”