Lots of things can cause strain in family relationships and one of the more troubling revolves around financial issues. Regardless of the difference in income, debt, and financial situations, every household is vulnerable to economic stress. One financial setback can wreak havoc even in families with higher incomes.
Money problems in the family have an impact on the well-being of its individual members. Based on the American Psychological Association (APA) survey, 64 percent of respondents reported money as a significant source of their stress. It affects not only the elders, but also the kids in the collective since they can pick up on the stress parents feel due to these financial problems.
Such economic stress can manifest differently in every family, but the good news is, there’s always a way to address the problem. This post will tackle the top financial issues families face and will outline ways to fix them. Read on and find out what you can do if you find your household in the same situation.
Having an income that doesn’t cover all your monthly expenses is a common problem in many households. Despite having a regular job, 61 percent of employed people are struggling to keep up with basic living expenses and other financial obligations, according to a Financial Wellness Report. This can add pressure to the situation and cause a lot of fighting between couples.
Creating a budget can help eliminate the stress, especially when money is tight in the family. It will help you better understand how much you’re earning and where your money is going. Once you have a complete picture of your finances, you can adjust or eliminate discretionary spending, such as eating out, entertainment, and subscriptions when finances are limited.
This remedy is dependent on how much leeway you have between your monthly income and expenses. If adjustments don’t work, getting a second job or having a side hustle may help. You can also request to work overtime or ask your employer to give you a raise, if at all possible.
Unexpected Job Loss
An unexpected job loss is among the biggest challenges families encounter. It doesn’t only hurt the self esteem of the person who lost the job but the family finances as well. A survey by the Pew Research Center revealed that around four in ten adults report that they or someone in their households lost a job due to the recent pandemic.
Even if losing your job isn’t your fault, recovering from this can be tricky if you’re not prepared. Add to that the possibility that it can take an average of five months to find a new job, and you’re likely to have a really stressful home life. Planning can help minimize the impact such an event has and help your family overcome this financial crisis.
There’s no guarantee that business is favorable all the time. Whether employed or self-employed, anyone’s job status can change without warning. This is why it’s always a good idea to have a rainy-day fund in place. This is even more important if your household budget depends on a single income source.
Besides unemployment, families may also deal with several other emergency expenses. A sudden hospital visit, home repairs brought about by natural disasters, and other unforeseen events can be overwhelming and cause a strain on your finances.
This is where having an emergency fund comes in handy. Unfortunately, not every household has that type of financial safety net to protect themselves from the unexpected. Having access to fast and easy payday loans is the most viable solution for many families. If your family needs quick cash to cover an urgent financial issue, these loans can be a good source of funds.
Even with such an option available to you, it’s still best to start building an emergency reserve that can cover at least three months’ worth of your family’s living expenses. This can help your family survive any financial-related issues. Every little amount you set aside for can add up in the long run, creating a financial cushion for your family.
Facing financial setbacks can happen to any family. Although they are inevitable, your family can take steps to prepare for them. Remember that an honest and healthy conversation with family members about money is essential. It may not be easy but find a way to talk about your financial goals, issues, and even habits from time to time.