The Effects of economy crisis on Families and How to cope

During any economy crisis, news stories about unemployment and inflation figures take center stage while the families dealing with the crisis suffer, often quietly. People work hard just to stay afloat in hopes that the economy will turn around soon, but often to no avail.

While many families do their best to carry on as if nothing is wrong with the world, economy crisis can have a profound effect on their day-to-day interactions and the way they live. Families may not be able to avoid the effects of the crisis, but they can make changes that can improve their situations and help them prepare for the future, while they wait for an economic upswing.

The Effect and Strategies to Cope

 Jobs and Employment

Job loss affects the stability of families and individuals. Our status, self-worth, health, and well-being can be drastically impacted by the loss of a job while many who lose their jobs use the time for growth and exploration, many suffer with depression, alcoholism, and denial.

With unemployment and inflation rates running extremely high during a economy crisis, individuals and families struggle to find work to pay the bills each month. The inability to find work can be frustrating, terrifying, and depressing, and can lead to even more problems. When a parent is unemployed, things can seem bleak.

Tips and Strategies:
Short-term solutions might include, borrowing money from friends or family, and taking a lower-paying job to keep family together

Long-term solutions can include working closely with headhunters and recruiters to find a higher-paying job taking a vocational training and relocating to other state or town where cost of living is not too high. The relationships fostered with headhunters can help with a job search but the process takes time.

Instead of waiting for the perfect job to appear, consider taking a part-time job to bring in some income while working with a headhunter to find the right career. Going back to school for additional studies can also help with a job search. It might be time to transition to a new line of work. Choose new career paths wisely, based on the job market and the outlooks for greater career.

Moving to a new town for a job can open up new career opportunities as well. Relocating shouldn’t be seen as a last resort. In fact, being open to job opportunies  in different areas and can significantly widen a job search.

 Family Life

The stress of not finding work, and a loss of income, can lead to damaging inter-family relationships that can take years to mend. Sometimes families must borrow money from relatives and families, which can result in tense situations.

Some families must change their plans, switch schools, and cancel vacations. In other households, there is even an unfortunate increase in child abuse case or child labour.

Tips and Strategies:
Families can work together to cope with the changes brought on by an economic downswing. In fact, a crisis may positively impact a family, as families tend to stay home together, and spend more time together.

Instead of pricey nights out at restaurants, take the family to a local park for an evening picnic or have a cheap family game nights in your  home

Look at the experience as an opportunity to spend more time with the children, and make the most of the time spent as a family.

 Lifestyle Changes

Reduced income leads to reduced entertainment, dining, and extracurricular activity expenses. People cut back on extras during  economy crisis, so many families must make drastic changes to their pre-crisis lifestyle. This means fewer trips, shared experiences, and missed opportunities because of a lack of funds.

Tips and Strategies:
The lifestyle changes brought about by a crisis will include a period of adjustment. Families must allow themselves time to adapt, and understand that children may not fully understand the financial implications affecting the family. Talk with children about how things will change, and be realistic about expenditures and outcomes. It’s a great time to teach your kids about money management.

Don’t build up expectations about what might change in the future. After a period of unemployment, belt-tightening may still be necessary, as the impacts of unemployment can be far-reaching. Instead, focus on changes that need to happen now, and how the family can make the best of the situation.

Investing

family budgets may not accommodate short and long-term non-residential investments during economic crisis. Families may put investment accounts on hold, hoping to play catch-up at a later date. Families may also be tempted to invest money because of the reduced expense of stocks, but without any expendable income, investing may not be feasible.

This can have devastating effects on retirement accounts and savings accounts. It may also become necessary to tap into investments and retirement funds for cash.

Tips and Strategies:
Using retirement funds to pay bills should be a last resort, because the economy  might not pick up in time and the loss of future income. If using money earmarked for retirement becomes unavoidable, withdraw small amounts, and only use the money to pay essential bills, like the rent, school bills, and utilities.

 Determining Necessity

Families must understand the diffrence between needs and wants during economic crisis. Families need a safe place to live, clothing, food, and access to affordable health care. As priorities shift for many families during an economic downturn, they can focus on the necessities, and learn more about their innate survival skills.

Tips and Strategies:
Learning how to prioritize expenses, adapting to a loss of critical income, and making lifestyle changes will be hard. Families can cope during this period of adjustment by relying on each other, becoming a true support network. Celebrate successes as a family, and acknowledge each other’s’ efforts to become solvent. Take control of the situation to reduce the negative impacts of the economic crisis, and to set a good example for the rest of the family.