It’s a common story, a family that works hard and budgets will still get into debt problems. Why is this? Well, it’s often a number of factors that come together causing a financial crisis. Luckily, it can be weathered if you prepare financially before having kids and follow the family finance secrets below.
Watch out for student loans
For many people, one of the largest debts they have to pay off every month the student loan. This applies particularly to married couples and families because the repayments are calculated on the household income and not the individual wage of the person that is earning them. That means if one of you makes less, or is staying at home with the kids you will still be expected to keep up with your loan repayments, and if you don’t you run the risk of being in default.
To find out how this applies to your situation look up info on student loans and marriage, and how one affects the other. As well as consulting services that can negotiate a more favorable repayment situation. Something that can take off some of the pressure on your family finance situation, and may just be enough to keep you afloat during the tough times.
Family finance: Bankruptcy isn’t always the answer
For many families, it seems like bankruptcy is the only answer when they have overwhelming debt. Being bankrupt is when you declare that you have no more capital to pay off what you owe. Your debtors are legally entitled to seize your assets in lieu of payment.
However, going bankrupt is a serious thing, and it can affect your credit rating, getting a job, and even have a heavy emotional impact on the family. Especially if they have to move from their home and lose items that they are used to having. That is why it’s always best to consider the other options before going down this route.
For example, a debt consolidation agency can help you manage what you owe better, without having to declare yourself bankrupt. The idea is that they take on all of your debts, and then you pay then one monthly fee. It can be easier this way because they will assess how much you can actually afford to pay each month, rather than your fending off multiple demands that you can’t fulfill.
So, bankruptcy may seem like the only option to help you get through financial problems, but it’s best to hold off on this unless it’s 100% necessary.
Are second jobs good in an emergency?
Consider too the option of getting a second job when times are tough. To do this, you can take on overtime in your current position or earn some extra bucks by answering surveys, or website testing online.
Yes, it can be tough to fit in even more work, especially when you have loved ones to look after. Although, remember it’s not forever, just until the family finance crisis has passed. Also, by working online, you can remain in the family home. You won’t have to spend too much time away from the kids and can still earn enough to get through that financial crisis.
Great read! Thanks for sharing!
As someone who went through a foreclosure many years ago, I wish I had known I could sell my home for cash to protect something like a foreclosure. I am the owner of 919 Real Investments and I help struggling homeowners in Raleigh, NC, by buying their homes for cash.
Excellent advice here!! Thank you for this 💙💜
And thanks for taking time to read posts this weekend, Laina! <3
You’re very welcome! Thank you for everything you do – your blog is incredible 💓
I feel that way about your blog too! <3
Feeling such good vibes! Basking in them and sending more your way! 💕💕🤝💕💕
Awww thanks! <3 :)
Your knowledge never ceases to amaze me. I can’t even imagine how much time you put into creating and researching these posts. Fine material for a self help book my friend. <3
A general rule of thumb that I learned from Mum…
If you don’t have the money to pay for it DO NOT
buy it. Buying on credit is the fastest way to trouble.
Having a credit card isn’t the problem, but overusing
one is. Credit card fraud & identity theft are the
fastest growing realities today. Using a debit card
everywhere you go is asking for trouble irl & online.
Making a budget & using cash makes a person much
more likely to think twice before parting with money than
just swiping a card & seeing how fast the interest adds
up on a monthly statement. Even those “Cash Back”
claims have an *, which says the “cash back” is deducted
from the next statement. So in fact these commercials are
100% false advertising since there is no real cash back.
My mom has the same rule – be able to pay off those credit cards at the month’s end! It’s a great way to keep you within your budget :) Moms are the best! Thanks for sharing your views here!
I grew up with a “cash on the barrel head” example and philosophy. I worked 4 days a week in college, and had no student debt. Yes, it was EXTRA hard, but I was young, and had the energy. I also worked extra hard in college and won some bursaries. I was debt free when I began a career.
The money lenders have become sharks.We have become desirous of an affluent lifestyle at a young age. They win.
Wow, that’s determination and you can hold your head high with that debt-free story, Resa! xx
Hard to do in today’s society, but having been born before it’s evolution, I was one, probably now few and far between people, who was brought up on the principle of, if you could not afford it, as in pay for it fully at the time, you didn’t buy, didn’t get. Put simply, you lived within your means. You weren’t judged on materialism so much then, as what appears to be case now. People knew and understood the word ‘No’. Could also be one of the lessons of ‘tough love’.
The only people that benefit from debt, are the people that lend and they know it. They prey on people’s (not the people’s fault) weaknesses, ‘want now’ desires, more than likely making them very, very happy when someone cannot meet repayments.
In saying the above, a great many, as what I will refer to as ‘support mechanisms’ have changed (don’t think it for the better either), over the years, as in, for example, if you wanted to progress through further education (college, university), you were supported more by the authorities, rather than having to now, as more than likely is the case, rely on family, placing oneself into debt.
If education is of such value to organizations, should it not be supported fully as such, by the organizations?
Appreciate the share, Michael!
I suspect that this is happening more and more these days. Things are getting tight for us all. Good read though, and good advice.
There are important things to consider. It is not always easy accommodating changes, but you have offered some good suggestions.
Had to share this on my Facebook page this morning. Great content. Keep it going. 😌
Thanks for the share, Jay, and the kindness you continue to show :)
Me & ex we did cut back on the car usage & other bits but got stuck in a rut using money lending websites..not a place to be but we managed to get through it & back on track with finances…
Some interesting thoughts here, Christy. I have always subscribed to living below your income so if some variable changes like interest rates, you will still be okay. I suppose that is spoken like a true accountant and I do know that it is not always that easy.
Great points, Christy. It was important to us to be able to send our kids to college without needing to get student loans. We started saving for them when they were little. I’m very thankful that we were able to achieve our “no student loans” goal. Young people have enough expenses to deal with without having to worry about loan repayments, too. I realize this approach is not doable for everyone, but it was a huge priority for us. We do live frugally in many ways in order to be able to meet our financial goals. It’s all about priorities and trade-offs, when possible. Thank you for your great insights!
At my age i can say these are all things to watch out for, along with all the unexpected things that occur – medical bills, car breakdowns, loss of job, appliance repairs, etc. I’ve dealt with them all.
Hi Christy! Amazing post, for us, in order to survive going down to one income during my maternity leave, we got rid of our car loan which is the best thing as we had less debt to pay. Declaring bankruptcy is definitely a scary thing. My friends family declared this 10 years ago and he had to buy a house for his whole family at only 20 years of age. They lost everything. It is so sad :(
Yes it is a common problem that is highlighted in post. Really we should care about.
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