Very interestingly, family finance loopholes are often attributed to problems rooted deep in the financial habits of families rather than to the contemporary global financial situation. A very interesting but relevant observation will tell you. Various financial gurus opine that our kids imbibe the financial habits from us. It was during the1950s and 60s that parents in general were buying too much on their credit cards. What their parents did in moderation, the children did in excess while they grew up and thus we are grappling with overwhelming debt burden at present. Here is a look at the family finance loopholes and ways of addressing the same.
Understand what the problem is
One of the major problems of families is that they understand the symptoms of financial crisis and their consequences. However, they fail to identify the underlying cause of these problems. Your inability to pay your home loan for the first time might just be one of the initial symptoms of the crisis which might slowly lead to the repossession of the property. And what exactly is the cause of the problem? Taking a cue from what we have already mentioned in the first paragraph, we can say that it is the lack of financial discipline within the family that hurts family finances the most. The frequent use of credit cards (as already mentioned above), the inability to stick to a budget, bickering over financial problems instead debt relief options, are financial habits of parents that children are most likely to take after.
Fighting amongst yourself is not an escape from your financial problems. It can never be. The key is to be prudent with your financial decisions and not overestimate your repayment capacities. And, even if you have committed these gaffes to end up with a major financial crunch— bankruptcy should never be your go-to solution. There are several valid debt relief options including debt management, consolidation etc that allow you to resolve your debts in a systematic manner. Debt specialists generally try to lower your debts significantly by negotiating with your creditors. Do not file for bankruptcy before finding out whether you can qualify for debt relief program offered by a reliable organization or not.
You don’t have to give up on fun
You necessarily are not required to give up on your fun times during a financial crisis. Yes you have to cut down on your expenses. Try not to buy anything even if they are on discount. Plan a family staycation instead of going out on an expensive vacation (financed by credit) as a means to secure relief from your present financial crisis.
Consider taking help from a financial advisor
This is one of those investments that families refuse to make. You might as well find yourself spending way out of your reach with your credit cards! But no.. you are not ready to turn to the help of a financial advisor who can actually help you understand flaws in your money management techniques, guide you on smarter investments and help you manage your finances better. Why?