A leading cause of stress in many households often revolves around money. Unnecessary financial hardship can be difficult for anyone, especially given how this past year's economic downturn shifted from Wall Street to Main Street.
Some of your closest relationships may have suffered setbacks, too.Here are some ideas for talking with family, friends and your closest loved ones about money matters and smoothing out rough patches.
1. Your Marriage. When money is tight, it's easy to play the spousal blame game: "You talked me into this expensive house, and now look at the pickle we're in." or "You were sure this retirement investment was a good thing, but now we'll have to work another 10 years." Unfortunately, assigning blame won't solve your problem. "You signed up for ‘for better or worse' so why not accept your financial mistakes and move forward to fix them - together?" says J.J. Montanaro, a USAA Certified Financial PlannerTM practitioner. There are a few ways to do that:.
• Make financial dates. Commit to regular time together, without kids or the distraction of TV, so you can map out your personal financial recovery. For instance, what's one task you can tackle right away? Do you have a monthly budget? If not, take out the yellow pad or, if you're tech-savvy, visit sites such as Mint.com, Yodlee.com, Geezeo.com or Wesabe.com.• Get outside help. If you're really locked into money struggles, an accredited financial planner or a marriage counselor who specializes in financial issues can help you sort out practical solutions and defuse intense emotion.
2. Your Aging Parents. If you haven't yet had "the talk" about your parents' money and their future, this is a good time to broach it. Start slow. Money can be touchy, so tackle other issues first. Ask your parents if they've thought about where they'd like to live if they're less independent in the future, or what their wishes are regarding burial or cremation. If a friend or other loved one of theirs dies, that's often a good time to bring up this sensitive topic.
Over time, ease into questions about money.
Or cut to the chase. If your parents are openly worried about their assets, help connect them with good resources. A financial planner, tax professional or elder-law attorney can help your parents evaluate their financial picture and perhaps ease their fears.
3. Your Kids. Many children are aware that something unusual is happening in the financial world or have friends whose parents are laid off. Since they already sense that something is up, be up-front with your children about any changes in your own family's finances.
See this as a teachable moment. "Allowing children to see the family work through a rough financial patch is something that can help them down the road," says Gail Cunningham, vice president for the National Foundation for Credit Counseling. If your kids someday face money challenges, they'll take strength from recalling how your family successfully tackled them together.
Let kids help. Call a family meeting and ask kids to suggest some ways to cut back so they'll feel like part of the team. "At the end of the month, celebrate your savings with a pizza and a rented movie, or whatever would be special to your family," Cunningham suggests. Also, let tweens or teens manage a piece of their own spending, such as clothing. They quickly become careful spenders when it's their money they're using.
4. Your Free-Spending Friends. Right now, frugal is cool so it's easier than ever to get out of expensive dinners and vacations with friends. If you still have a few clueless pals, it may be time for some straight talk.
Decide how much you want to say. Montanaro says you don't necessarily have to lay out all your financial problems. "You can simply say, ‘We're tightening our belts right now. Instead of XYZ restaurant, how about a barbecue at our house?'" he suggests. Your friends will understand that the cost is an issue, but you still want to see them.
Axe the guilt. "Remember there's no shame in admitting what has happened. You didn't ask to be laid off or for your retirement nest egg to shrink," Cunningham says. "Those friends who are still spending freely may be the next ones to experience a setback. No one is immune." If you're candid about your challenges and efforts to get back on track financially, your spendthrift friends may someday call you for cost-cutting advice.
This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.USAA means United Services Automobile Association and its insurance, banking, investment and other companies. Banks Member FDIC. Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers. USAA Financial Planning Services® refers to financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California), a registered investment adviser and insurance agency and its wholly owned subsidiary, USAA Financial Advisors, Inc., a registered broker dealer. Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and Certified Financial Planner TM in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements