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Family Financing: The Importance of Communicating During Financial Hardship

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When faced with financial hardship, many individuals attempt to hide their emotions in order to shield their family from the increased burden. However, what may begin with good intentions often creates even more hardship on the family . Parents under high amounts of stress may be less engaged with their children or react more harshly over small things. Peggy Olive, a Financial Capability Specialist from the University of Wisconsin, says, “It is important to remember that children sense the tension in the family and may feel less secure, but don’t know what to do about it”. Problems in the home only adds more stress to an already stressful situation. What can be done to bring stability to the family?

The solution depends creating open channels of communication within the family.

Regular family money meetings can help divide the stress of the financial burden into more manageable challenges. Open communication between older children and parents can help determine collaborative solutions to managing the family finances. Additionally, young children could be educated on the differences between wants and needs, and how family financial decisions are made. Family meetings may need to become more frequent during times of financial stress and other hardships. These meetings can be used to set attainable family goals and determine alternate activities for cutting back on back on spending. Finding inexpensive alternatives to family activities can help keep the brunt of the hard times from falling on any individual.

Difficult financial decisions can also be solved through collaborative family research into available financial support programs. Staying in contact with lenders is a good way to work on creating a realistic payment plan before the family falls behind. “This means that you have done the math and know that you can meet your basic needs, while doing the best you can to meet your financial obligations to your creditors”, says Olive. With the collaborative support and effort of the whole family, financial hardships will not seem insurmountable, and the situation will become less stressful for all involved.

For more information on communicating during financial difficulties, including tips for conducting family money meetings, please go to:

https://fyi.extension.wisc.edu/toughtimes/talking-with-family-managing-stress/talking-with-your-family-about-financial-difficulties/

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Financial problems and challenges happen to everyone at some point, and the stress and worry can get to you. However, realizing that there is almost always a way out can help you not feel so depressed. You may be able to find the way out yourself, or you may need someone else's perspective to help you find a solution. Below we’ll show you how to overcome financial problems and difficulties and ease your stress. But, one size does not fit all. If your situation is beyond the general help provided here, we’ll also let you know who you can go to for more in-depth help.

1. Identify the Underlying Problem That's Causing the Difficulties

The first step to overcoming financial problems is to identify the underlying issue that’s causing the financial difficulties. Financial problems are usually a symptom of a bigger issue. To come up with solutions that work in the long run, take the time to identify the real source of your financial troubles. Here are some common things to think about:

Your problem may not be listed above or it may be more complex. However, the concept of identifying a specific problem is important because it is more likely to result in a lasting solution. Just like with a leaky faucet; placing a bucket below is temporary. Fix the tap and the leak will stop. Focus on solving the problem that’s causing your money troubles, rather than dwelling on your stress.

2. Create a Budget - Spend Money in a Way That Helps Solve the Problem

One of the best weapons for combating financial problems is a budget. A budget is a monthly spending plan for your money. Creating a budget is like turning the lights on to find your way around a dark room. You no longer need to wander in the dark; banging your shins, tripping over the furniture, and stepping on the dog. Instead, with the lights on, you can see what’s going on and prevent problems before they happen. A budget works much the same way; it guides your spending decisions so that you're spending money on what's really important to you. In this case, you'll spend your money in a way that helps solve your financial problem .

Click here to learn more about creating a budget , or try out our budget calculator that guides you through the budgeting process , points out common problems, and offers suggestions to improve your budget.

Track Your Expenses to Build a Budget That Works

As you create your budget, it’s important that your expenses aren’t just guesses – they need to reflect reality. You may want to track your expenses for at least a couple of weeks (a month is best) to objectively see where you are spending your money and how much you’re spending. Although you may think you know where your money is going, when most people tally up all their purchases for a month, they are usually quite surprised to notice that their spending doesn’t always match up with what they thought their priorities were.

3. Determine Financial Priorities to Guide Your Spending Choices

Steps to overcoming financial problems and difficulties.

4. Identify Small Steps You Can Take to Address the Problem & Achieve Your Goals

Look here to get ideas of where find some extra money each month , get the card paid off, and then permanently have $50 extra to use in your budget every month. However, if by the time you reach this goal you’ve learned to get by without this $50, then use it to accelerate the payment of another debt each month, and get all of your debts paid off more quickly.

Look for Things You Can Do, Even Temporarily, to Improve Your Situation

Here are more ideas or steps you can consider taking to improve your financial situation and alleviate difficulties:

As you look through your budget, ask yourself: Do I want this or do I need it? Will spending this money get me closer to my financial goals or further away? Can I live without it? Learn more about separating needs from wants .
Do you use credit cards for impulse purchases? This can contribute to a cycle of ongoing financial difficulty and add as much as 50% to everything you purchase . Learn how to reduce or change impulsive spending habits .
Ask yourself if you can downsize anything in your budget or switch to a less expensive option. If vehicle costs are straining your budget, can you downsize your vehicle, get rid of one vehicle (the average person spends over $9,000 per year to own and operate a vehicle), take transit (80% cheaper than owning a vehicle), or car pool? If your rent, mortgage, or home upkeep is bleeding you dry, can you downsize to something more affordable, rent out your basement, rent a room in your house, rent out the storage space in your garage, or can you take in a student for some extra income?
If debt is causing you financial problems, here are a lot of ways to reduce your debt or here are a dozen of the most effective ways to get out of debt .

Tools, ideas, and steps to help solve financial difficulties.

Can you take on a side job or create another source of income with something you know how to do well?
Look outside the box, ask yourself tough questions, invite a trusted friend to have a look at your budget and make suggestions, or sit down with a Credit Counsellor and get their suggestions .
Research viable options that will move you towards your goals. A consolidation loan , speaking with a Credit Counsellor , a Debt Management Program , or some other option may be a possibility.

While doing any of these can be an unappealing thought, don’t just dismiss them because they’ll move you out of your comfort zone. Keep thinking about them and give them some consideration. Come back to these ideas from time to time to see if you can come up with a new angle on decreasing your expenses or increasing your income that might just work for you. Remember, you’re trying to get through a tough a time; you don’t need to do this forever, just to get back on track. If you’re really struggling, an experienced Credit Counsellor can be a great, free source of suggestions .

5. Develop Your Plan to Overcome Financial Problems for Good

Once you’ve come up with some ideas for how to begin tackling your financial problems and difficulties, you can put together a realistic plan to accomplish your goals . Some goals will have a timeline of a few months; others will need a longer timeline, like 24 - 36 months. Write your goals down, but also write down where you’re at now in relation to each goal. For example, if one of your goals is to pay off a $4,000 debt, make sure to write down the current debt balance and your future goal of paying this down to $0. You’ll want to include in your plan the amount of money you’re going to pay on this debt every month so that you can pay it off within your desired time frame. For more help on setting goals, have a look at this . Here are also some tips on setting financial goals with your spouse .

If you’re really feeling overwhelmed and stressed by your situation, you can also reach out to a non-profit credit counselling agency for help . They have professionally trained Credit & Debt Counsellors who can review your situation with you, help you put together a realistic budget, and help you come up with a plan to solve your current challenges and get your finances back on track. Their help is usually free and is always confidential.

6. Review How Things are Going

The last step takes place once you are a few months into working on your plan. Every once-in-a-while, take a few minutes to review how things are going. Is your plan working? Are you making progress toward your goals? If not, you’ll need to take a closer look to figure out why not and adjust your plan. Your plan needs to be realistic, or it’s not going to work. It should also contain some things you weren’t doing before you put the plan in place.

If you keep doing what you were doing before, then you’ll continue to get the same result as before – problems. You’ve got to do something different to get a different outcome.

As you follow your plan and see improvements in your situation, be open to the possibility of fine-tuning the plan. Once you start making some progress, you may find you’re doing better than you thought, or you may come up with some new insights. Improving your plan so that you accomplish your goals more quickly is good as long as your budget can afford the changes and everyone who relies on your budget is okay with the more aggressive approach.

Preventing Future Financial Challenges

Unexpected financial challenges are bound to arise in the future - in fact, research shows that 6 in 10 Canadians will experience major life events that will challenge their prior financial plans . The key to tackling these challenges is to be flexible. Review your budget occasionally and make necessary changes. Build up savings so that you can handle unanticipated expenses without going into debt and putting yourself in a difficult situation.

Overcoming financial problems and difficulties isn’t easy, but by setting some clear priorities for yourself, identifying ways to achieve these goals, and persevering with your plan, you can overcome the challenges and at the same time, put an end to the financial stress.

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Add new comment

vivienne replied on Mon, 12/10/2018 - 4:59pm Permalink

how to overcome 8 types of financial problems

sagar pal replied on Tue, 05/28/2019 - 11:43pm Permalink

MyMoneyCoach Team replied on Wed, 05/29/2019 - 8:51am Permalink

Where to get help

Bandela Pratap replied on Thu, 03/05/2020 - 7:10am Permalink

Financial problems

MyMoneyCoach Team replied on Thu, 03/05/2020 - 8:40am Permalink

Finding help

Pushkaraj Sawant replied on Fri, 09/04/2020 - 7:21am Permalink

You should speak with a credit counsellor

Diganta Gohain replied on Sat, 09/05/2020 - 8:43am Permalink

Drastic financial problems

MyMoneyCoach Team replied on Fri, 09/25/2020 - 9:43am Permalink

Two places to look for help

Lanie Won replied on Wed, 05/04/2022 - 7:35am Permalink

Nina replied on Sat, 07/08/2023 - 10:42am Permalink

68 years old with little money for the golden years

MyMoneyCoach Team replied on Mon, 07/10/2023 - 2:58pm Permalink

You should speak with a financial planner

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Financial Distress & the Family

Economic hardship and financial distress can have devastating effects on families. In tough economic times, many families lose their jobs, homes, cars, retirement accounts, belongings, savings, health insurance, and more. Families often struggle just to meet their basic needs. Stay-at-home moms may suddenly find themselves searching for work or selling their prized possessions. Unemployed fathers feel like a failure, are guilt stricken and ashamed of losing their identity as the family's provider. Grown, adult men and women with children may find themselves moving back in with their parents until they can put the pieces of their lives back together; other families are moving in with each other. The shift from having "something," even moderate means, to having "nothing" is devastating. When families are faced with the grief of losing everything and the fear of never being able to recover, these uncontrollable circumstances have a drastic impact on families as a whole, on marriages, and on husbands, wives, parents, and children.

Common responses to such devastation include:

post-traumatic stress
severe grief
alcohol or drug abuse
overwhelming levels of stress
feelings of detachment
feeling surreal
over- or under-eating
inability to sleep (or excess sleep)
upset stomach
and other physical and mental symptoms of stress and depression

Families may become torn apart or separated. For example, children may move in with extended family or friends, or marriages may be extremely stressed and fall a part, and there may be underlying tension or feelings of despair. Parents may interact with their children in tense or punitive ways with a short temper; children may respond with negative behaviors and emotions, and teens may face problems in school, negative peer groups, lost self-esteem, and delinquency.

How do you know when to seek help?

If you or your loved one is experiencing any of these symptoms, it is important to seek help. Stress may feel overwhelming. Depression, if left unaddressed, could cripple one's ability to get out of bed, take a shower, put on clothes and look for a new job. In the worst case, if left unaddressed, depression can, in some cases, lead someone you love to committing suicide.

What options for help are available?

Medications are commonly used to treat anxiety, panic, depression, and other symptoms one is experiencing. While medication is helpful in restoring health and healing to one's physical body (the brain in particular), treatment is most successful when coupled with psychotherapy or "talk" therapy.

Talk therapy (psychotherapy) occurs in a relaxed, straightforward, and non-judging environment, in which you or your loved one will sit down with a therapist and discuss the things that are bothering you in a safe and private space. A therapist is skilled in helping to bring important issues to the forefront, and in helping each voice and perspective be expressed, heard, and understood.

Areas may include:

Financial health issues, such as instrumental and psychoeducational interventions, to aid job searching and financial management
Mental health issues, such as stress, anxiety, confidence and esteem loss, and depression, in adult and child family members
Behavior issues, academic issues, and issues of negative activities and peers, in children and adolescents
Couple and marriage issues, reducing financial strain effects on relationships
Parent-child relationship issues, parenting emotions and practices, understanding negative and positive parenting practices and effects
Family issues, including family counseling to reduce blame, to build resiliency, and activate family resources
Community issues, helping families to engage with community resources and increase social support

How can an MFT help the client and family?

A marriage and family therapist (MFT) can help you or your loved one and the family. MFTs are trained to understand the complex nature of problems, especially problems resulting from external social factors, such as economic hardship. They address problems that an individual may be experiencing, as well as difficulties in couple and parent-child relationships. An MFT can help alleviate symptoms like anxiety or depression through addressing the social or familial circumstances that may be contributing. They can help you to ensure that your children are buffered from the worst effects of financial strain in effective and concrete ways.

MFTs believe in the power of healing that occurs when treating and working with the whole family unit. Even though a particular family member may be the one who seems to be suffering the most, generally all family members are also affected in various ways. All perspectives and resources come together in family therapy to create positive and helpful changes in a shared and co-created vision.

MFTs can work with family relationships to restore trust, improve communication, increase satisfaction, and foster healthy ways of relating.

Clinicians are knowledgeable about research findings about what protects families from the adverse effects of financial strain.

Couple/marriage therapy . Couples who treat each other well in times of financial stress fare much better than those who argue and blame each other for problems. While some amount of argument about money is to be expected, how couples argue is important to relationship quality. Couples therapy can help spouses/partners communicate safely and effectively. Couples therapy can help couples work together to partner, support, and care for each other through difficult times.
Family therapy and parenting. Positive parenting practices and good parental relationships substantially protect children from the serious negative impacts of financial strain in families. Family therapy focused on parenting and parent-child relationships can go a long way in helping children. Clinicians may work with mothers and fathers to reduce irritability and stress expressed toward children, and to reduce negative parenting—aversive, punitive, arbitrary, coercive techniques (such as threats, derogatory statements, slaps)—and to build positive parenting—(reasoning and loss of privileges)— that is nurturing, affectionate, and sensitive to children’s needs.

Research indicates that parents, as well as children, benefit when parents feel more effective and capable, parent-child relationships improve, and parenting feels less difficult and more satisfying. In turn, as parental well-being improves, so does children’s.

Themes commonly addressed in therapy include grieving loss, confronting denial or unrealistic expectations, symbolism and meaning of money, restoring trust, emotion regulation and couples skill development, stress management, money management, job search skills, parenting skills, and children’s well-being.

Financial Planning Association (FPA): The primary professional organization representing financial planners.
Financial Planners: Offers a list of financial planners by geographic location.
Comptroller of the Currency Administrator of National Banks: This site assists customers of national banks and helps them find answers to national banking questions.
Family and Consumer Sciences: Information for all audiences about the wise use of credit. Topics include credit reports, credit scores, avoiding credit pitfalls, getting out of debt and bankruptcy.
Institute for Financial Literacy: The mission of the Institute is to make effective financial literacy education available for all American adults.
MyMoney.gov: The U.S. government's Web site dedicated to teaching all Americans the basics about financial education.
National Endowment for Financial Education: This site offers help in learning to manage money, no matter the financial challenge. Articles, tools and other resources are available

financial problem in family essay brainly

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Families’ Financial Stress & Well-Being: The Importance of the Economy and Economic Environments

Terri friedline.

1 University of Michigan School of Social Work, 1080 S. University Avenue, Ann Arbor, MI 48109 USA

2 University of Southern Mississippi School of Social Work, Hattiesburg, USA

So’Phelia Morrow

The Great Recession and the unfolding COVID-19 Pandemic Recession—two major disruptions to the economy that occurred just one decade apart—unequivocally confirm the importance of the economy and economic environments for understanding families’ financial stress and well-being. However, recent published literature places too little emphasis on the economy and economic environments and instead focuses on explanations rooted within individuals and families. In this article, we review research on families’ financial stress and well-being published in JFEI between 2010 and 2019, which analyzed data collected during the Great Recession and were subsequently published in the shadow of the economic downturn. We discuss the economy and economic environments as gaps in the literature and encourage future research to focus on these explanations of stress and well-being, especially in response to the pandemic recession.

Introduction

As one of the most significant macroeconomic events of the last century, the Great Recession that began in 2007 undermined the financial well-being of millions of American families. This widespread economic downturn disrupted families’ financial well-being, defined as being able to “fully meet current and ongoing financial obligations” (Consumer Financial Protection Bureau [CFPB] 2015 , p. 18), when banks’ and financial institutions’ predatory and subprime lending precipitated the foreclosure crisis and forced families into borrowing debt (Mian and Sufi 2014 ; Federal Reserve Bank of New York 2019 ). The extraordinary rise in subprime mortgage lending precipitated the equally extraordinary rise in default rates: Nearly 4 million homes were foreclosed at the height of the Great Recession (Mian and Sufi 2014 ). Suggestive of their need to cope with economic hardship, families increased their borrowing in the years after the economic downturn. Total consumer debt rose from approximately $7 trillion in 2003 to $12 trillion in 2008 and $14 trillion in 2019 in inflation-adjusted dollars (Federal Reserve Bank of New York 2019 ). These effects were experienced more acutely by those who were targeted by banks and financial institutions for subprime lending and that had the fewest financial resources to spare, including Black and Brown families (Faber 2018 ; Hamilton and Darity 2017 ), lower-income families (Pfeffer et al. 2013 ), and families headed by women (Baker et al. 2019 ).

The effects of the recession precipitated by the global pandemic in 2020, caused by the rapid spread of the coronavirus COVID-19, will be far more severe than those of the Great Recession. American families never fully recovered from the Great Recession to begin with, as evidenced by continued rising consumer debt and wealth losses (Baker et al. 2019 ; Federal Reserve Bank of New York 2019 ; Hamilton and Darity 2017 ). Without strong and aggressive government intervention, families are likely to be completely financially devastated by the unfolding Pandemic Recession. It will be years and decades before the full, lasting effects of the Pandemic Recession on all aspects of life are understood; however, early reports of families’ lived experiences are already revealing their immediate financial devastation. While the lessons that are still being gleaned from the Great Recession can inform current and ongoing responses to the Pandemic Recession, much more extensive and grassroots-focused policy responses will be needed to stabilize and shore up families’ financial well-being.

Since its inception in the late 1970s, the Journal of Family and Economic Issues (JFEI) has been dedicated to the important academic mission of exploring and understanding families’ financial well-being within the contexts of their economic environments. The journal’s literature published within the most recent decade—a time period that encompasses the Great Recession—continues this legacy and has made important contributions on a range of topics including income, wealth, and debt (Addo et al. 2019 ; Fan and Chatterjee 2019 ; Hancock et al. 2013 ), economic hardship (Lucero et al. 2016 ; Schieman and Young 2011 ), financial stress (Kramer et al. 2019 ; Valentino et al. 2014 ), and strategies for coping with hardship, like saving money (Fisher and Montalto 2011 ; Fontes 2011 ; Haron et al. 2013 ).

At the same time, we contend that recent published literature on families’ financial stress places too little emphasis on economic environments and, by extension, the economy (Friedline, Nam et al. 2014 ; Lai 2011 ; Rauscher and Elliott 2016 ; Thorne 2010 ; Vesely et al. 2015 ), and often focuses on explanations rooted within individuals and families (Deidda 2015 ; Gjertson 2016 ; Park and Kim 2018 ; Romo 2014 ; Stein et al. 2013 ; Tobe et al. 2016 ; Valentino et al. 2014 ). This lopsided emphasis is common for articles in journals whose scope is similar to that of JFEI, such as journals focused on family or household finance, counseling, and planning. The effects of Great Recession and the unfolding COVID-19 Pandemic Recession on families’ financial well-being—two major disruptions to the economy that occurred just one decade apart—should unequivocally confirm the importance of the economy and economic environments. The gaps created by the focus of JFEI’s recent published literature provide opportunities for the journal to extend its mission and focus on the economy and economic environments in which families are situated.

In this article, we review research broadly captured under the umbrella of financial stress and published in JFEI between 2010 and 2019, and which were mostly conducted in the United States. These 23 articles were assigned to us by the special issue editors to focus on financial stress. The articles analyzed data collected during the Great Recession and were subsequently published in the shadow of the economic downturn. Therefore, a focus on the economy (national and global macroeconomic sites of labor, production, and consumption) and economic environments (local and regional economic sites) is even more consequential. We discuss these gaps in the literature and encourage future research on families’ financial stress and well-being to emphasize the economy and economic environments, especially in response to the Pandemic Recession.

A Literature Review of Financial Stress and Well-Being

The literature we reviewed that broadly focused on financial stress and well-being can be grouped into four categories: income, wealth, and debt; economic hardship; financial stress; and coping strategies. We attempted to create a temporal ordering of families’ financial stress by grouping the literature into these categories. For example, families with inadequate income, wealth, or debt may experience economic hardship that precipitates stress when they struggle to afford their current and ongoing financial obligations. Families use a variety of strategies to cope with these circumstances. Table Table1 1 lists these articles and provides a summary of their research questions and main findings. Given that these articles covered broad and overlapping topics, several were grouped into multiple categories.

Summary of reviewed literature

Income, Wealth, and Debt

The Great Recession weakened the financial well-being of many families, placing them at risk by destabilizing income-producing and wealth-generating mechanisms (Friedline et al. 2014 ; Lee and Kim 2018 ; Rauscher and Elliott 2016 ; Rhine et al. 2016 ). Families experienced significant changes or disruptions to their income, wealth, and debt during and after the economic downturn (Federal Reserve Bank of New York 2019 ). One basic way that families attempted to establish and maintain their financial well-being was through savings account ownership (Rhine et al. 2016 ). Savings provide families with liquidity for supplementing their income and making further investments. Those with savings accounts were able to take better advantage of these assets for buffering against some of the negative effects of the economic downturn (Friedline et al. 2014 ); although, families who were positioned to take better advantage of these assets benefitted from intergenerational wealth transfers (Friedline et al. 2014 ; Rauscher and Elliott 2016 ).

One way families tried to maintain their financial well-being in response to the Great Recession was through opening lines of credit and applying for small loans. However, families’ participation in these types of wealth-building and debt accumulation mechanisms was restricted to those who were able to participate in lower-cost, higher quality financial services. Instead, many families used higher-cost, lower quality financial services like payday, installment, and auto title lenders. For example, households with constrained credit were more likely to use payday loans than those who were not (Lee and Kim 2018 ). In the years following the Great Recession, many households reported that a payday loan was the only option available to them (Lee and Kim 2018 ).

Families struggled to manage their debt during the economic downturn and turned to public welfare for support (Kim and Wilmarth 2016 ). Public welfare can help families avoid debt or help them to repay current debts. Kim and Wilmarth ( 2016 ) found that 54% of the households receiving public welfare were able to meet debt-to-income guidelines compared to only 46% of households who were not receiving assistance, thus showing the government’s role in helping households manage their debt especially during an economic downturn. Some families had been accumulating debt when the Great Recession began and were therefore more vulnerable. In their exploration of the determinants of filing for bankruptcy, Bauchet and Evans ( 2019 ) found that having higher credit card debt was positively associated with filing for bankruptcy while having higher asset amounts was negatively associated. Moreover, having educational debt from student loans was negatively associated with filing for bankruptcy, potentially highlighting that certain types of debt could have differential effects on the likelihood of filing for bankruptcy.

There were also differences in income, wealth, and debt by race, class, and gender identity (Malone et al. 2010 ; Rhine et al. 2016 ; Rauscher and Elliott 2016 ). For example, compared to White families, Black and Latinx families were less likely to own a savings account and had less access to liquid assets like money market, mutual fund, or retirement accounts (Rhine et al. 2016 ). Higher income households had more financial resources to buffer them from income and wealth losses compared to lower income households (Rauscher and Elliott 2016 ). Gender differences in real wages also suggest that the Great Recession affected men’s and women’s wages differently. Women spent more time on activities like cooking meals and childcare than men (Kuehn 2016 ). Time spent caring for children was consistently negatively associated with real wages, such that more time spent caring for children resulted in a decrease in actual wages (Kuehn 2016 ).

Economic Hardship

Economic hardship, also referred to as material hardship, refers to families’ inability to meet their needs such as food, clothing, and health care (Mimura 2008 ; Rios and Zautra 2011 ). Closely related to poverty, economic hardship is a multidimensional construct and has been assesssed by a host of measures that go beyond traditional poverty measures that are based primarily on income thresholds. Because the construct taps into multiple, distinct dimensions of well-being (Iceland and Bauman 2007 ), economic hardship has been frequently examined in the aftermath of the Great Recession to gain nuanced understandings of families’ experiences. Examples of economic hardship reviewed in the literature include food, housing, health care, education, and bankruptcy, which together reflect families’ difficulty in meeting their needs (Heflin 2016 ).

Many Americans experienced abrupt changes in employment, income, and wealth during and after the Great Recession that were associated with their economic hardship (Bauchet and Evans 2019 ; Deidda 2015 ; Heflin 2016 ). For example, Heflin ( 2016 ) found that experiencing income losses and having a person with disability join the household were associated with hardships related to housing, health care, and other essential expenses like food. Analyzing data from five European countries, Deidda ( 2015 ) found that housing costs were a financial burden and were associated with economic hardship, such as preventing families from spending money on health care, education, food, and clothing. Findings from these studies converge to suggest that many families lived in a time of financial instability and were vulnerable to financial shocks. Changes in life circumstances can easily place households at risk of experiencing economic hardship, ranging from diffculty in covering basic needs to filling for bankruptcy (Bauchet and Evans 2019 ; Deidda 2015 ; Helfin 2016 ).

Economic hardship inevitably places stress on family relationships (Masarik and Conger 2017 ; McCubbin et al. 1980 ), which can make some more vulnerable to abuse and violence (Lucero et al. 2016 ; Showalter 2016 ). Lucero, Lim, and Santiago ( 2016 ) examined the link between economic hardship and intimate partner violence with a sample of 941 women in committed relationships. The longitudinal data analyzed in this study allowed for an examination of economc hardship over a 10-year timespan between 1999 and 2010 that included the Great Recession. Continuously high levels of economic hardship over time elevated the risk of intimate partner violence, implying that ongoing economic hardship can be an additive stressor that subjects women to intimate partner violence.

Financial Stress

Families experience financial-related psychological stress or distress when they do not have adequate income, wealth, or debt to afford economic hardship (Lai 2011 ; Park and Kim 2018 ; Thorne 2010 ; Sweet et al. 2013 ). A concept that is related to well-being (CFPB 2015 ), financial stress arises when families are unable to meet their current and ongoing financial obligations. Financial stress is often operationlized as the physical or mental health symptoms that arise from having difficulty meeting basic needs, difficulty paying bills, and money leftover at the end of the month (Afifi et al. 2018 ; Ponnet et al. 2016 ; Romo 2014 ; Valentino et al. 2014 ). These indicators that measure the extent to which families lack the financial resources to afford current or persistent obligations help to explain why greater income and wealth are often associated with lower financial stress (Lai 2011 ; Romo 2014 ; Valentino et al. 2014 ).

Financial stress presented differently among individuals within and across families. Women, for example, experienced the effects of financial stress by having poorer physical and mental health when compared to men (Afifi et al. 2018 ; Lai 2011 ; Park and Kim 2018 ; Stein et al. 2013 ; Thorne 2010 ). In heterosexual couples, women reported higher levels of stress and anxiety than their partners in anticipation of having conversations about money (Afifi et al. 2018 ). Women’s higher levels of financial stress could have been partly due to the fact that they were responsible for managing their households’ finances during economic hardship. Thorne ( 2010 ) interviewed couples who were filing for bankruptcy, finding that women were often solely responsible for financial decision-making during this time and that they experienced severe stress. Overwhelmed with the responsibilities of paying taxes and responding to creditors, one woman prayed she would die during an upcoming surgery to escape her financial stress, “I was to the point where when I went in for surgery, I prayed to God that I didn’t wake up…I just didn’t want to come home…I wanted to have an easy suicide” (Thorne 2010 , p. 194).

There were also differences in financial stress across racial groups (Afifi et al. 2018 ; Park and Kim 2018 ; Serido et al. 2014 ; Valentino et al. 2014 ). For instance, White young adults exhibited higher rates of alcohol use and heavy drinking in the presence of financial stress when compared to their Asian, Black, and Latinx counterparts (Serido et al. 2014 ). In a study that examined the communication patterns and stress levels of White and Latinx heterosexual couples, Latinx couples often presented as a united front, used humor, and blamed the Great Recession for their economic hardship (Afifi et al. 2018 ). Couples that adopted these communication patterns also exhibited lower cortisol levels. A study that examined financial stress longitudinally found that Black mothers displayed higher rates of financial stress over time, whereas White mothers’ stress was stable yet persistent (Valentino et al. 2014 ). For White mothers, their stress could be explained in part by their depressive symptoms. However, depressive symptoms did not predict Black mothers’ stress (Valentino et al. 2014 ), which might be better explained by disparities in income, wealth, and debt (Hamilton and Darity 2017 ; Pfeffer et al. 2013 ) and could indicate that popular scales validated on White populations are inadequate for measuring Black women’s depression (Jones and Ford 2008 ; Watson and Hunter 2015 ; Woods-Giscombé and Lobel 2008 ).

Coping Strategies

Families experienced econonic hardship and mounting financial stress in the post Great Recession era. A stream of research has investigated how individuals and families coped with economic hardship and financial stress, especially focusing on certain demographic groups or social identities such as low-income households (Bauchet and Evans 2019 ; Gjertson 2016 ; Kim and Wilmarth 2016 ; Tobe et al. 2016 ), immigrants (Vesley et al. 2015 ), women (Menclova 2013 ), and young adults (Stein et al. 2013 ). The coping strategies that individuals and families adopted varied to a great extent, with some similarities.

Faith and religious beliefs were a commonly investigated and discussed coping strategy. For example, Tobe et al. ( 2016 ) observed families receiving counseling services and found that they used faith to build support systems through new relationships with others. Similarly, Stein et al. ( 2013 ) described how college students used religious coping strategies to make sense of the economic crisis and loss. College students that responded to surveys perceived the economic crisis as a punishment from God; although their religious perceptions did not appear to be associated with self-reported well-being (Stein et al. 2013 ). Reliance on family and relationships were observed among economically distressed families: Strong family relationships helped to sustain those under emotional and financial stress among Midwest families (Tobe et al. 2016 ) and immigrant mothers (Vesely et al. 2015 ).

Families also coped financially by borrowing from payday loans, filing for bankrutpcy, using government susidies, changing jobs, or saving for emergencies (Gjertson 2016 ; Lebert and Voorpostel 2016 ), espeically among low-income families (Kim and Wilmarth 2016 ) and families with credit constraints (Bauchet and Evans 2019 ; Lee and Kim 2018 , Tobe et al. 2016 ). These coping strategies align with the literature on economic hardship, which concludes that many families remained financially stressed during the illusory economic recovery. Notably, these coping strategies were closely linked to the recession. Specifically, the likelihoods of using payday loans and filing bankrupcy were higher among families with damaged credit and credit card debt (Bauchet and Evans 2019 ; Lee and Kim 2018 , Tobe et al. 2016 ). Studies imply that the magnitudes of these associations increased strongly following the Great Recession. In addition, race and life circumstances seemed to matter when it came to using these strategies. For instance, given the constraints created by discrimination and inequality (Shapiro 2017 ), Black respondents and households with a dependent child had higher likelihoods of using payday loans (Lee and Kim 2018 ). Having a new child enter the family was associated with an increased possiblity of filling for bankrupcy, while retiring was associated with a decreased possiblity of filing for bankruptcy (Bauchet and Evans 2019 ).

Public welfare was an important strategy for families who utilized these government-sponsored programs to cope with economic hardship and financial stress. Studies suggest that public welfare helped families to manage their debt (Kim and Wilmarth 2016 ), as well as to improve their physical health outcomes (Menclova 2013 ). These findings are especially relevant given that participants included low-income families (Kim and Wilmarth 2016 ) and women (Menclova 2013 ), who were disproportionately impacted by the Great Recession (Baker et al. 2019 ; Pfeffer et al. 2013 ). For families that used public welfare, these government programs were just one component of a series of supports that they cobbled together to cope with econimc hardship and financial stress (Vesely et al. 2015 ; Tobe et al. 2016 ), suggesting that public welfare in and of itself was far from sufficient (Edin and Shaefer 2016 ).

The Invisible Hand(s) of Financial Stress

The current focus of JFEI’s published literature aligns with a neoliberal perspective of financial stress, which locates the responsibility for experiencing financial stress with individuals and families as opposed to the economy and economic environments (Abernathy et al. 2019 ; Lin and Neely 2020 ). The market forces of neoliberal capitalism are rendered invisible. This perspective deemphasizes or ignores macroeconomic trends from a capitalist system that raises the stakes on individuals and families and contributes to their financial stress, such as reduced collective bargaining power (Jacobs and Myers 2014 ; Western and Rosenfeld 2011 ) and low and stagnant wages in the labor market (Mishel et al. 2012 ); widening income and wealth inequality (Kim and Sakamoto 2008 ; Piketty 2014 ); subprime financial products promoted by banks and lenders (Baradaran 2017 ); gentrification and rising housing costs (Maharawal 2017 ; Moore 2009 ); and environmental hazards like air pollution and lead-tainted water (Benz 2019 ; Mohai et al. 2009 ; Pulido 2016 ). Moreover, given that the published literature often attempts to understand differences in financial stress by race, class, and gender, a lack of consideration to the economy and economic environments may unwittingly advance harmful stereotypes by placing blame on families for their lived experiences with systemic racism, classism, and sexism (Hamilton and Darity 2017 ; Walsdorf et al. 2020 ).

The Great Recession—as the COVID-19 Pandemic Recession will become—is a critical backdrop in the literature on economic hardship, income, wealth, and debt, financial stress, and coping strategies. Recognizing the importance of the economy and families’ economic environments, most authors of the articles we reviewed justified their current data and analyses in reference to the Great Recession and situated their findings within this context (Bauchet and Evans 2019 ; Thorne 2010 ; Vesely et al. 2015 ). Though, despite this contextualization, authors often explained families’ financial circumstances by using language like choices, preferences, values, and information. This language situates explanations within the individual or family, while deemphasizing the economy and economic environments.

There are numerous examples of the literature’s de-emphasis of the economy and economic environments in favor of adopting individualized explanations. For instance, Kim and Wilmarth ( 2016 ) examined the relationship between receiving public welfare and households’ debt-to-income ratios. By exploring public welfare, Kim and Wilmarth ( 2016 ) explored the potential role of government in supporting families who were experiencing economic hardship. An acknowledgment of government’s role aligns with the perspective that the welfare state adjusts for the failures of capitalism (Azmanova 2012 ). However, in discussing possible interventions, the authors concluded that financial educators, counselors, and coaches could also assist families in managing their debt, writing, “Promoting better financial management for households could assist in saving resources from the government” (Kim and Wilmarth 2016 , p. 357). In other words, individualized interventions like financial education or coaching may assist families in responding to macroeconomic contexts that prevent them from meeting their current and ongoing financial obligations. In another example, Rhine and colleagues (2016) examined whether savings account ownership was associated with preventing wealth losses during the Great Recession, writing “…families recognized the value of possessing a savings account even as wealth or income may have declined to some degree” (p. 345). The authors inferred that there was an individualized, value-based explanation for rates of savings account ownership and or wealth during the Great Recession, despite reporting on disparities by household income and race that were evidence of classism and racism (Rhine et al. 2016 ). In a similar exploration of savings account ownership among young people, Friedline et al. ( 2014 ) wrote: “The wealth and resources of [their] households likely help them establish their savings accounts as children” (p. 406). While employing an explanation that hints at the ways the economy and policies enable intergenerational wealth transmissions, the passive language used by Friedline et al. ( 2014 ) discounts the centrality of this capitalist system.

There are some examples of how the reviewed literature emphasizes the importance of the economy and economic environments. For example, Lai ( 2011 ), Thorne ( 2010 ), and Vesely et al. ( 2015 ) wrote explicitly about the economy in which families were situated. In exploring the experiences of older Chinese immigrants in Canada during the economic downturn, Lai ( 2011 ) wrote: “Challenges related to institutional racism, mistrust of the system, inadequate knowledge of services available…The recession can further contribute to the discrimination against older people, particularly those who come closer to the retirement age in the work force” (p. 521, 522). By first identifying institutional racism and discrimination, Lai ( 2011 ) recognized macroeconomic explanations for older Chinese immigrants’ experiences while acknowledging the existence of individual explanations like knowledge of available services. Vesely et al. ( 2015 ) interviewed low-income immigrant mothers who moved to the US from Latin America and Africa, writing, “…ecocultural theorists account for the ecological factors, including ‘institutional forces’ that impact families’ daily lives, and in turn, individuals’ wellbeing” (p. 515). Vesely et al. identified “institutional forces” to emphasize the importance of the economy and families’ economic environments for understanding their well-being.

Toward an Emphasis on the Economy and Economic Environments

Families are situated within specific historic, cultural, social, political, and economic contexts. An emphasis on the economy and economic environments illuminates or makes visible some of these contexts and policy decisions that are responsible for families’ well-being, which is especially important in the wake of the Great Recession and COVID-19 Pandemic Recession. While explanations rooted in individuals and families—such as focusing on a family’s budgeting or observing their levels of financial knowledge—can decontextualize and flatten families’ experiences, an added emphasis on the economy and economic environments offers more holistic and accurate understandings.

The Economy of Capitalism

Families’ financial stress and well-being are influenced by the economy and associated policy decisions (Baradaran 2017 ; Mian and Sufi 2014 )—the national and increasingly global macroeconomic sites of labor and production, trade, and consumption of goods and services. For example, policy decisions to reduce workers’ collective bargaining power altered how labor for production was compensated and contributed to declines in union membership, decreased wages, and rising inequality (Western and Rosenfeld 2011 ). Over time, families experienced these policy decisions as declines in their income that occurred simultaneously with the rising costs of goods and services, compelling them to borrow debt to cope financially (Federal Reserve Bank of New York 2019 ). Therefore, the economy and related policy decisions are key drivers and explanations of families’ financial stress and well-being.

The United States’ economy is capitalist, and policy decisions are made in relation to capitalism. In its simplest definition, capitalism is an economic system where the means of production are privately owned (Hahne and Wright 2016 ; Wright 2018 ). That is, individuals do not realize the profits produced from their own labor; rather, private companies keep these profits in exchange for paying modest wages. Moreover, the current version of capitalism emphasizes individualism or personal responsibility and relies on finance for economic growth. Capitalism’s neoliberal paradigm emerged in the 1970s to emphasize individualism or personal responsibility, and has been characterized by limited state public welfare provision, privatization, deregulation, and free market competition (Abernathy et al. 2019 ). Neoliberalism’s related policy decisions have intensified financial pressures on families vis-à-vis the state’s withdrawal. Capitalism also requires the pursuit of income and profits for economic expansion (Friedman 1962 ; Romer 2014 ), which is increasingly driven by finance where income and profits are generated through financial channels instead of through labor and production (Lin and Neely 2020 ).

Capitalism pursues and creates profits by assigning difference, using social constructions that confer hierarchies of desirability or worthiness onto traits and characteristics for stratifying economic value (Cottom 2017 ; Robinson 1983 ). Capitalism’s differential economic valuations are discriminatory, enabling and even requiring people or property to be valued differently based on their proximity to social constructions of whiteness, maleness, and other privileged identities (Garrett-Scott 2019 ; Robinson 1983 ; Wang 2018 ). Many scholars criticize capitalism as a racialized and gendered project (Garrett-Scott 2019 ; Wang 2018 ). For example, the use of credit scoring assigns differential economic value to individuals based on a range of factors like borrowing debt and paying bills, and influences how banks make lending decisions (Lauer 2017 ; Nopper 2019 ). Credit scoring models assign higher values to Whites while assigning lower values to Black and Brown peoples that limit their lending options and contribute to their higher likelihoods of using payday loans (Lee and Kim 2018 ). Differential economic value enables a house to be valued more highly when it is located near desirable amenities like a park or central business district, or near socially-constructed desirable traits like communities with wealthier and whiter populations (Rothstein 2017 ; Taylor 2019 ), which has implications for access to credit and net worth accumulation. Therefore, a critical analysis of capitalism is important for understanding families’ financial stress and well-being, particularly for identifying evidence of discrimination in observed the differences by race, class, and gender (Afifi et al. 2018 ; Park and Kim 2018 ; Thorne 2010 ; Lai 2011 ; Vesely et al. 2015 ).

Economic Environments

In addition to the broader macro economy, families are situated within local and regional economic contexts. These economic environments—and the resources and opportunities available within—influence families’ financial stress and well-being. Decades of research in sociology (Sharkey et al. 2017 ; Small and McDermott 2006 ), social work (Green and McDermott 2010 ; Kang et al. 2019 ; Trattner 1999 ), geography (Galster et al. 2016 ; Hedman et al. 2015 ; Pike and Pollard 2015 ), and public health (Dankwa-Mullan and Pérez-STable 2016 ; Pérez and Martinez 2008 ; Shore et al. 2015 ) have emphasized the importance of families’ environments for understanding various aspects of well-being.

Financial services are one type of resource or opportunity within economic environments that may influence families’ financial stress and well-being. Mounting evidence confirms the importance of financial services within local economic environments. For instance, the presence, absence, or relative mix of financial services provide various resources and opportunities for families to supplement income, access credit, accumulate wealth, and cope with economic hardship. Individuals who live or grew up in communities with at least some bank branches are more likely to use these services, have bank accounts (Celerier and Matray 2017 ; Goodstein and Rhine 2017 ), and have higher credit scores (Brown et al. 2016 ). Moreover, the presence and concentration of higher-cost, lower quality financial services like payday lenders in economic environments undermine families’ financial stress and well-being. The concentration of higher-cost, lower quality financial services is associated with increased use of these services, and their use is associated with having lower credit scores and struggling to pay bills (Bhutta 2014 ; Melzer 2011 ).

One reason that a focus on economic environments is so important is because resources and opportunities are highly variable from one community to the next. Racism and classism have created stark geographies of segregation (Faber 2018 ; Rothstein 2017 ), meaning that there are vast differences in families’ economic environments that can explain differences in their financial stress and well-being. Policy decisions like those that created redlining, for example, codified racial and economic segregation into the geographic landscape. Redlining refers to a set of intentionally created and mutually reinforcing policies and practices implemented by banks, lenders, real estate agents, and government that excluded Black and Brown borrowers from the mortgage lending market (Rothstein 2017 ). The Home Owners Loan Corporation’s (HOLC) residential security maps assigned differential economic value to communities, where communities “greenlined” were predominantly White while communities “redlined” as hazardous for were predominantly Black and Brown (Baradaran 2017 ; Rothstein 2017 ). Since banks and lenders would not originate new loans in redlined communities, Black and Brown borrowers were excluded from the mortgage market and from the benefits of wealth via home equity (George et al. 2019 ).

Segregation shapes the resources and opportunities within local economic environments (Faber 2019 ; Rothstein 2017 ). For example, higher-cost, lower quality financial services like payday lenders and check cashers tend to concentrate in Black and Brown communities that are avoided by banks and credit unions (Baradaran 2015 ; Celerier and Matray 2017 ; Faber 2018 , 2019 ; Jorgensen and Akee 2017 ). Even the availability and use of digital technologies are subject to spatially organized segregation. Increases in communities’ Black and Brown populations are associated with decreases in high-speed internet access, online banking, and mobile banking; though, the relationships are opposite for increases in communities’ white population (Author). Whether families can apply for a low-cost loan at a bank or manage their money online depends to some extent on how segregation determines the resources and opportunities within their communities.

Future Directions and Conclusions

The literature on families’ financial stress and well-being can be expanded upon and advanced by focusing on the economy and economic environments. We offer three possibilities for future directions, including applying or developing theories, measuring variables and incorporating them into models, and analyzing policy decisions. These future directions are especially important for research that attempts to understand differences by race (Faber 2018 ), class (Pfeffer et al. 2013 ), and gender (Baker et al. 2019 ).

Future research should develop or apply theories that incorporate the economy and or economic environments into explanations of families’ financial stress and well-being. The existing literature relies on family stress theory, life cycle theory, and ecocultural theory (Kim et al. 2016; Masarik and Conger 2017 ; Tobe et al. 2016 ). While ecocultural theory accounts for economic environments (Vesely et al. 2015 ), neither life cycle theory nor family stress theory were designed to take the economy or economic environments into consideration. By failing to apply theories that incorporate these explanations, research instead focuses on individual-level solutions to larger social and economic problems. For instance, the evolution of the stress paradigm shows that a focus on stressful life events can obscure the role of larger social and economic factors on physical health and well-being (Link and Phelan 1995 ). Theories such as ecological systems theory (Bronfenbrenner 1975 ) can account for the interaction between an individual and their environment. Ecological systems theory posits that an individual’s environment comprises multiple systems, including a macrosystem characterized by rules, laws, and unwritten norms (Bronfenbrenner 1979 ). The economy and an individual’s economic environment are part of this larger macrosystem. Therefore, a focus on theories that do not consider the economy and economic environments can obscure the role they have in explaining families’ financial stress and well-being.

Research can also measure and test macro economic and environmental variables as explanations of families’ financial stress and well-being. The existing literature published in JFEI rarely measures macro economic or environmental variables, despite describing the importance of these contextual factors. The ramifications of the Great Recession such as income and wealth losses, home foreclosures, and rising debt have been widely experienced and contributed to a multitude of families’ economic hardships and financial stress (Mian and Sufi 2014 ). Nevertheless, the literature keeps the macro economy in the background or simply discusses these factors as missing variables (Heflin 2016 ). The absence of variables measuring the economy and economic environments is a critical gap and presents an opportunity for future research. Future research can measure and test variables on the economy and economic environments to more fully understand financial stress and well-being. Examples of such variables include job losses, housing costs, home foreclosure rates, loan originations, and access to financial services.

Future research should also test the effects of policy decisions on families’ financial stress and well-being, such as the policy decisions that codified redlining (Rothstein 2017 ), enable payday lending (Bhutta 2014 ), precipitate home foreclosure (Bauchet and Evans 2019 , or implement public welfare programs (Kim and Wilmarth 2016 , Menclova 2013 ). While extant studies examine home foreclosure and debt (Bauchet and Evans 2019 ; Kim and Wilmarth 2016 ), they fail to test the effects of policy decisions on financial stress and well-being outcomes. Similarly, policies regulating payday lending can have widespread impacts on families’ financial stress and well-being (Melzer 2011 ). However, few studies within the JFEI literature have investigated how payday lending regulations affect financial stress and well-being—even as these lenders expanded during and after the Great Recession (Faber 2018 ). Similarly, as public welfare programs appear to help families cope with economic hardship (Kim and Wilmarth 2016 ; Menclova 2013 ), research should examine how variations in public welfare policy implementation impact financial stress and well-being. Longitudinal studies are usefiul here given that a longitudinal framework is often needed to examine changes in the economy and in policy decisions over time. Future research should address this knowledge gap by testing the impacts of relevant policy decisions.

Lastly, racism, classism, and sexism at systemic levels mean that families experience economic downturns differently. As evidence of disparate impacts (if not discrimination) during the Great Recession, subprime lenders targeted Black and Brown communities for lower-quality, higher-cost loans (Faber 2018 ; Hamilton and Darity 2017 ) and women accumulated significant amounts of debt to support their families (Baker et al. 2019 ). Racial and economic segregation may further force the concentration of these differential experiences. Any future research that attempts to explain differences in families’ financial stress and well-being by race, class, or gender must take into account systemic explanations, like forms of discrimantion and the economy and economic environments. A failure to develop or apply theories, measure variables, or test policy decisions—even while describing these differences—risks blaming families for the discrimination and marginalization that they experience.

In conclusion, this paper fills gaps in the existing JFEI literature on families’ financial stress and well-being by emphasizing the importance of the economy and economic environments. A focus on the economy and economic environments has always been important. However, now, this focus is especially necessary for understanding the immediate and prolonged impacts of the COVID-19 Pandemic Recession given the absence of public welfare and skyrocketing unemployment and debt. Future research must not ignore the contexts and policy decisions with regard to the COVID-19 Pandemic Recession that contribute to families’ stress and well-being. We therefore encourage researchers to incorporate and or investigate explanations of families’ financial stress and well-being that are rooted in the economy and economic environments.

Biographies

is an Associate Professor of Social Work at the University of Michigan. Her research focuses on financial system reforms and consumer protections. She holds an MSW and PhD from the University of Pittsburgh School of Social Work, and is an appointed member of the Consumer Financial Protection Bureau’s (CFPB) Academic Research Council.

is an Assistant Professor at the University of Southern Mississippi School of Social Work. Her research focuses on understanding financial behaviors and decision making and interventions that promote financial inclusion and economic security for low-to-moderate income individuals and families. She holds an MSW and PhD from Louisiana State University, and received postdoc training at the Center on Assets, Education, and Inclusion housed in the University of Michigan School of Social Work.

is a doctoral student in the joint PhD program between Social Work and Sociology at the University of Michigan. Her research interests include understanding the relationship between wealth health among Black women. She holds an MSW (‘17) from the University of Michigan School of Social Work and an MPH (‘17) from the University of Michigan School of Public Health. So’Phelia is also a Rackham Merit Fellow.

No funding was received for this literature review article.

Compliance with Ethical Standards

The authors have no conflict of interest to report for this literature review article.

No animals were involved in this literature review article. This literature review article does not contain any studies with human participants performed by any of the authors.

Informed consent was not applicable for this literature review article.

This is one of several papers published together in Journal of Family and Economic Issues on the “Special Issue on Virtual Decade in Review”.

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Contributor Information

Terri Friedline, Email: ude.hcimu@ildeirft .

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Impact of Financial Problems

Even the youngest children can pick up on the stress parents or caregivers feel as a result of the economy and personal financial anxiety. Our experts recommend using simple, clear terms to explain the situation in a sensitive manner.

Signs that Children are Struggling with Excessive Stress

Parents and caregivers should be alert to these warning signs that children are struggling with the stress of the family financial situation: changes in eating patterns; changes in sleeping patterns; increased clinginess or whining; regression, or a return to behavior characteristic of a younger child; increased fear of separation from parent; appearance of new fears; increased aggression; decreased cooperativeness; increased irritability, fussiness; decreased frustration tolerance; withdrawal/subdued or sober mood; and increased behaviors parents/caregivers view as “attention-seeking”.

Talking to Children about Financial Stress

Younger children may benefit from simple, clear words to explain what already is or is reasonably sure to occur. They are often reassured by descriptions of the concrete details of what will happen to their belongings and with their routines (e.g. where their bed will be, who will make their dinner, the fact that their special bear is certainly coming along). Young children look to trusted adults in order to draw conclusions about whether they are safe or need to be worried or fearful. They operate according to the principle, “I’m okay if you’re okay.”

Children at about six years and up can be increasingly engaged in discussions that anticipate adversity and that can effectively serve their intended function of preparing them. One useful lesson that children can learn from difficult circumstances is that families pull together – although parents need to clearly convey that they are ultimately responsible for managing the situation and that they are figuring out how to do that.

All children benefit from opportunities to express their feelings through words and/or play, from patience in the face of their negative emotions, and from the feeling that they are understood. Research shows that steady, responsive, sensitive parent-child relationships can buffer children from the effects of excessive stress and can promote children’s own sense of competence and effectiveness.

Decreasing Household Stress

Using words to label children’s feelings can help them feel more organized, and parents’ empathy can help them settle (“I know you are disappointed,” “I can see that you are really mad right now!”) Parents should also maintain everyday routines as much as possible. Some sense of predictability, even in the midst of great change, helps all of us across the lifespan retain a feeling of security.

Include other people who spend time with your child in your circle of support. This includes, perhaps especially, child care providers and teachers. Think with them about how they can support your child during this period when your family is struggling. Tell them to expect some regression or challenging behavior. Let them in on what you know and have noticed about your child’s behavior and needs, what they may see that indicates that your child needs some extra support, and what you do at home that seems to help.

Taking Care of Yourself

It is important that parents do what they can to take care of themselves when they are under stress, so that they are in a better position to recognize and meet the needs of their children.

Some suggestions for taking care of yourself are:

Reach out to family and friends for support
Get sufficient sleep
Practice relaxation techniques (yoga, walking, relaxation breathing, etc.)
Keep a diary
Keep your sense of humor
Keep your perspective: there are no perfect parents, and fortunately children do not require perfect parents

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Family Financial Problems

Many things can place a strain on the family bonds. Health concerns, psychological disorders, disciplinary issues with the children, and financial problems are some obstacles can affect any family. Financial problems can have many causes, and produce disastrous results when not handled promptly and properly. Families can take several steps to try to avoid problems or dig their way out of them.

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A 2009 Gallup poll lists lack of money, excess debt, the cost of owning or renting a home, job loss and healthcare cost as the most important financial problems families face. Families to worry more about basic economic problems than they do about specific concerns, such as the high gas and oil prices, or taxes.

Many families experience financial problems because they don't have good money management skills and make unwise decisions about how to use income and credit. Uncontrollable factors such as unemployment can add to families' financial problems. Lack of communication can cause problems when shopping gets out of control. Other causes of family financial problems include addiction, emotional problems and stress that lead to irrational spending patterns.

Family financial problems can lead to stress. Some couples fight over spending habits instead of searching for solutions to their money-related issues. Sometimes disagreements over money become so severe that they lead to divorce. Children may feel caught in the middle of the arguments, and feel guilt when they benefit from purchases, or disappointment when money problems prevent them from having certain things.

Prevention/Solution

because the financial problems affect the whole family, have a meeting to explain the financial issue and make a plan to solve it. Create a budget to eliminate debt and save money. Implement good record keeping practices, then establish priorities and stick to them. Viewing last 6 months bank statements, monthly bills, and monthly income information will help determine the family's budget needs. Family heads can work to create a budget to eliminate debt and save money. Then, implement good record keeping practices and establish priorities and stick to them. If credit issues are out of control, contact creditors to make manageable payment arrangements or seek professional help through Consumer Credit Counseling.

Create a safety net

Families should have a savings account with 6 months worth of living expenses in case of sudden job loss or other unforeseen circumstances. Don't be tempted to live off your credit cards in an emergency.

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Home — Essay Samples — Sociology — Family Relationships — The Importance of Family Problems and their Solutions

The Importance of Family Problems and Their Solutions

Categories: Family Relationships

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Published: Feb 7, 2024

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Families play a vital role in society, financial difficulties are a leading cause of family problems, the effects of family problems can be far-reaching and long-lasting, solutions to family problems vary depending on the nature of the issue, prevention is always better than cure.

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Issue No. 1: Not Enough Income. Each year, Americans say lack of money and too much debt are their biggest financial challenges. Adding to that stress, about 25 percent of families rely on just one source of income, which can make it feel impossible to save money, reduce debt and increase your net worth. Solution: Embrace a Tough Reality Check ...
Impact of Financial Problems
Impact of Financial Problems. Even the youngest children can pick up on the stress parents or caregivers feel as a result of the economy and personal financial anxiety. Our experts recommend using simple, clear terms to explain the situation in a sensitive manner.
Sample story of financial problems
Expert-Verified Answer. A family facing financial problems grapples with job loss, mounting bills, and strained relationships, creating a poignant narrative of resilience amidst adversity. In the quiet suburb of Elmwood, the Anderson family found themselves ensnared in the throes of financial hardship. John, the family's sole breadwinner, lost ...
How much financially a family falls behind due to breakup?
The financial impact of a breakup on a family can vary significantly depending on various factors such as the individuals' financial situation prior to the breakup, the division of assets, and the presence of dependents.. While some families may face significant financial setbacks after a breakup, others may navigate the transition more smoothly. In this argument essay, we will explore both ...
This Is The Real Reason Your Family Struggles Financially
Camilo Maldonado. A report by the JPMorgan Chase Institute explains why it's so difficult for families to plan for their monthly expenses. The problem arises because household expenses fluctuate ...
Mastering Budgeting: Lessons from Childhood to Adulthood Free Essay Example
Mastering Budgeting: Lessons from Childhood to Adulthood. Categories: Family Finance. Download. Essay, Pages 5 (1100 words) Views. 4962. Doing a budget for my family or even for personal use is not a new experience for me. At a very young age, I was taught by my parents how to wisely manage my money so that I would have something to pull out in ...
Family Financial Problems
A 2009 Gallup poll lists lack of money, excess debt, the cost of owning or renting a home, job loss and healthcare cost as the most important financial problems families face. Families to worry more about basic economic problems than they do about specific concerns, such as the high gas and oil prices, or taxes. Video of the Day.
The Importance of Family Problems and Their Solutions
A family problem can be defined as any issue that disrupts the harmony and well-being of a family unit. Whether it be financial difficulties, lack of communication, infidelity, addiction, or cultural differences, family problems can have significant effects on individuals and the family as a whole. It is essential to address these issues before ...
Why financial problems contribute to family conflict
See answer. Advertisement. farah18. Financial problems is the most conflict to famlies. It is because they dont have money, some kills their family members because they want money and can cause conflict. Its true that "Money is the root of all evil." And when we talk about evil, it applies to families wherein they fight because of money.
essay about family problems
Essay about family problems - 9764782. Due to people's hectic lifestyles, family issues are becoming more and more prevalent without any apparent solutions.Both mothers and fathers work these days, and as a result, they don't have as much time to spend together, unwind more, travel, mingle with people, discuss personal issues, or look out for one another.
Describing the Financial Problem in My Family
My family of four living with a poverty level income of $1500 per month would be spending approximately $550 on renting out their half of a duplex. The utilities would be covered in that $550. We would then be spending another $450 on food. And then another $300 on car insurance and car pay...
As a student what can you do to help solve your family's financial
As a student you can help solve your family's financial problem specially these times pandemic by Lowering your expenses, Stop taking on debt, and only buy needs. Explanation: Advertisement Advertisement creatthie creatthie ... Brainly.ph. PL: Brainly.pl ...
teenager's financial problem essay
Answer: One main issue is earning money. Teens may need to earn money to help their families meet expenses, pay for car insurance and gas if they have a car, save for college or pay for personal expenses or entertainment outings. Finding ways to earn money can be tough, especially when juggling a full-time school schedule.