Balancing Difficult Economic Times

by Lisa Thompson

It’s no secret that the U.S. economy is challenging, to say the least. In fact, our economy is currently as bad as it has been in recent history, and locally we are not immune to this downturn.

We’ve seen big box stores pack up and leave overnight, and watched some longtime favorite stores and restaurants fizzle out over long, hard weeks of struggle. Everyone has been affected by this current economic crisis in some way.

At my big girl job, I deal with this on a daily basis, watching business owners make the excruciating decisions to sell out, close their doors, or merge with larger businesses on a regular basis. Some are mom and pop shops and some are huge corporations; some are new and developing ventures while others are staples in our community that have sustained the ebb and flow of our commerce and trade industry for many, many years. No matter the situation, it never gets easier to experience someone who has to hang up his or her hopes and dreams because of an economic crisis.

In much the same way, many of us are experiencing similar crises at home. It is not a warm and fuzzy subject that we like to talk about and it does not make for good dinner conversation, but it’s time to get real and admit that times are hard for the middle class. For the record, I’m talking about the real middle class, not the households who bring in $200,000 annually that politicos like to lump in with us who are actually working-class Americans.

For those of us who are truly part of the American middle class, the past few years have caused us to become resourceful. We have to tighten our budgets, cut our frivolous spending and find new ways to save in order to continue living the lifestyles we want.

In 2009, my husband lost his second job six weeks after our first son was born. I was in graduate school, and it was ten days before Christmas. Needless to say, we had to make some adjustments to our budget, and we had to do it quickly.

Perhaps your family has had to deal personally with a layoff, a pay cut or another financial hardship in recent days. The following is a compilation of a few ways to be thrifty so that your household can continue running smoothly and you can reduce your stress level during the financial crisis:

Be up front with the bambinos.

It’s not an easy conversation to have with your six year old, much less your sixteen year old, but at some point you will have to tell them no. Perhaps it won’t be possible to pay the fees for Little League baseball this year, or maybe the big, blow out birthday party at Chuck-E-Cheese is out of the question. The best way to handle this is to let your children know well in advance that you will be tightening up. Explain what has caused the sudden spending freeze, give them some ways they can help, and make certain they feel reassured that they will have their basic needs met. It is important that kids know your decisions are made out of necessity, rather than based upon the specific item for which they are asking. This takes the emotion out of any spending decisions that affect them personally.

Be aware of how much you’re spending and what you’re spending it on.

This may seem obvious, but just like a business, every household needs a budget and an expense report to run effectively. Be vigilant about keeping track of where your money is going and you will be able to see areas you can cut and areas that are necessary.

When I did our taxes this year, I spent some time adding up various expenditures for my own book keeping purposes. I knew that we spend a lot of money eating out, but imagine my surprise when I discovered that over 12% of our annual income was spent at restaurants. Needless to say, we’re eating at home more this year.

Decide what is necessary- Do you have to have satellite television? Can you live without Internet at home? Perhaps you could make coffee before you leave home instead of that daily Starbucks splurge? It goes without saying that each of these items are of varying importance to each of us, but I would dare say there is something that each of us could do without and save some significant change.

Prioritize.

Along the same lines, take a look at what expenses are absolutely the most important. In my opinion, making your house payment, car payment, and utility payments are of utmost importance. In fact, I would say that all debts are at the top of the list. Buying gas to get to work and groceries to put on the table are also musts. In contrast, no matter how guilty you feel, you are not obligated to buy Girl Scout cookies, donate to your child’s classroom fund, or send a gift to every baby shower you are invited to this year. It may be a faux paus not to contribute, but foreclosure is much more embarrassing.

Save Money, Be Smart!

Instead of hiring a babysitter for date night out, invite a family over with their kids. The kids can play and the parents can visit.
Start a casserole club. Instead of buying dinner every night, make a casserole and swap with another family. An economical dinner is made for more than one night.
When choosing a night for the family to eat out, choose a restaurant that has a Kids Eat Free night!
Cut out impulsive spending!
Look for a second income: host a garage sale and get rid of all those old clothes and toys!
Start clipping coupons
Write a grocery list before going to the store and STICK TO IT!