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Balancing Family & Finances: How to Let Your Budget Breathe Under Pressure

August 03, 2017

“When I was your age…”         

We’ve all heard the stories about walking to school uphill both ways in the snow. Or how gas used to cost $0.50 and a Coke cost $0.25. Cue the eye roll and move the conversation forward.

However, there’s another type of comparison story that isn’t always as easy to brush off. With many families are facing tight budgets, looming debt, job loss, underemployment, medical costs, or just a string of financial bad luck, pressures, and expectations from extended family and friends can quickly move from an eye roll to hurt or even guilt. Too often, family members will tell hardship stories from when they were your age and how they “pulled themselves up by their bootstraps” while still being able to fulfill all of their obligations. Now cue the financial guilt trip.

Today, inarguably, is very different from the days of the past. Yet, society protocol tells us that at a certain age we should have achieved a certain goal and be at a certain financial point: college degree; married; pets; house; children; vacations; and retirement – all while having the latest gadget and keeping up with the latest trends.

Families expect loved ones to travel for every holiday, birthday, and celebration; remember obscure celebrations; participate in gift exchanges; and, through it, all, keep everything even between the various branches of the family. If you spend the holidays with your in-laws instead of your Mom? Guilt. If your brother, who is in dire financial straits, attends an anniversary celebration and you do not? Guilt. Not to mention, there is now the perception that your brother must know some budgeting trick that you do not.

Odds are, he doesn’t know a trick. Like many of us, he is compromising his financial situation to avoid conflict with the family. It is the easiest thing to do. No one wants to be the topic of discussion during family gatherings or be the only one to miss out on a big event.

Here are 6 ways to avoid being a family hot-topic and avoid getting yourself into a financial bind:

1. Create a Spending Plan: Whether you use a pen and paper or an app, having a spending plan in place will ensure that you are maximizing your financial potential. If you have debt obligations, you need to ensure that those obligations are being met. If there’s a reoccurring medical need, you’ll want to make sure to take care of it.

2. Prioritize: With your spending plan in place, now you can prioritize what you would like to achieve financially. Your spending plan is unique to you and your goals, whether it’s paying down debt, saving to travel, or taking up a hobby. Prioritizing your spending plan will allow you to meet your fixed monthly obligations and bills while saving for your goals.

3. Communicate: This can be very difficult as money is never an easy topic, but open communication is key to helping family understand your unique situation. If your budget is constrained, or you have more bills than you can handle, speak up. Making excuses about why you cannot attend a family function, or attending when you cannot afford the expense, will only further hurt yourself, and potentially others, in the long run. Your family ultimately wants what is best for you. It is your job to help them understand what is best for you.

4. Manage Expectations: Birthdays, holidays, and many other celebrations occur at the same time each year. If you know in advance that you won’t be able to attend an event, or that you cannot participate in gift giving, say so now. By providing advance notice, the party host can make proper arrangements for your absence or adjust plans to help you find a way to attend or participate.

5. Compromise: If you find it’s not feasible to travel to three different states or visit all of the extended family over all of the holidays, then compromise. Maybe your family plans one vacation where everyone meets at a central location. Or if you’re willing to host, invite your family to come to you. When there’s gift giving involved, and you simply do not have the extra funds for a material gift, offer a gift of service or time. Experiences are more memorable than things.

6. Be Guilt Free: There will be disappointment from the receiver of bad news. That’s to be expected. Recognize their disappointment and give yourself permission to forgive yourself. You know what is best for you and your situation. It is very intimidating to say no to the most important family celebration of the year, however; you are the best judge of your financial obligations. By incorporating the above steps, you may learn that those who are currently your biggest hinderers will turn out to be your biggest supporters.

Have you been faced with having to choose between your financial health and a family activity? What did you find most helpful in handling the situation?

Guest Contributor: Kara Schulte, AFC®


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