How to Maintain Balance in Your Life While Making Major Financial Change

The following is a guest post by Rich Avery from Life Compass Blog. As we've seen, making major financial changes can be quite stressful.

If you’ve hung around here at FreeMoneyFinance for long, you know its purpose is to help you “grow your net worth.” And one of the most basic things you can do to grow you net worth is to eliminate debt and create a surplus by spending less than you earn.

Have you ever noticed how easy these two things sound from a mathematical perspective (I can make anything work on paper, can’t you?), but how challenging they can be from an emotional perspective?  And not just for you but for everyone in your household.

Eliminating debt and spending less than you earn can mean radical changes for some – especially if you do it with “gazelle-like intensity” like Dave Ramsey talks about:  eating beans and rice and rice and beans, selling so much stuff that the kids think they’re next, getting extra part-time jobs, etc.

And it can cause a lot of stress and frustration if all those involved are not on the same page, don’t adjust their expectations to the new reality, or get discouraged from how long the process takes.

It’s ironic isn’t it:  we seek to eliminate stress and frustration in our lives by getting out of debt and creating a surplus, and yet we can end up - if we’re not careful - increasing our stress and frustration in the process.

For example, the Smith family decides it needs to increases the family’s income in order to eliminate debt, so Mr. Smith takes an extra part-time job.  It’s OK at first, but after a while, Mr. and Mrs. Smith are really feeling the effects of not being together as much as they used to be.  Mrs. Smith is tired of hauling the kids to all their after-school activities by herself, and the kids hate it that their dad is missing many of their sport or school activities. And everyone is frustrated that Mr. Smith doesn’t have the time or the energy to get stuff done around the house that needs to be done.

The Johnson family decides to focus on creating a surplus by reducing their expenses.  On paper, it looks OK and everyone feels they can live with the cuts they’ve decided on. But after the first few weeks, Mr. Johnson is frustrated that he can’t eat out as often as he’s used to with his co-workers.  Mrs. Johnson is really missing the $4.00 coffee drinks she had grown accustomed to when she went out with her girlfriends one night a week, and the kids hate it that the pay-TV was canceled and they can’t go to movies as often as they used to.

Is it possible to make major change in the financial area of life, without it leading to more stress and frustration in other areas, like marital and family relationships?

Best-selling author Patrick Lencioni, in The Frantic Family Model, suggests you can eliminate this stress and frustration by helping your family to see your financial goal (in this case, to eliminate debt and create a surplus by spending less than you make) as your major family focus for the next season of life, which could be the next 3 months, a year, or beyond. 

Here are some suggestions, based on ideas in his book, on ways you can bring the entire family along on the journey and keep them from mutinying or jumping ship:

1. Hold a major family meeting to discuss your current financial situation and suggest proposed solutions.  In the case of our examples, the proposed solution is to eliminate debt and increase surplus by reducing expenses.

2. Help everyone understand why this solution is important for the family, what role they play in helping to achieve it, and what it will mean for them in the future.  You need to give them a vision for how being debt free and having a surplus will give the family more freedom, less stress, and more opportunities and options down the road.

3. Convert the proposed solution to a seasonal goal for your family to focus on during the next season of life:  could be three months, six months, or a year.  If the goal will take longer than a year to complete, you might want to break-up your goal into a series of smaller, attainable goals in the three to six month range. 

4. Get everyone to commit to focusing on this goal as a family for this next season.  Make a chart or a sign or something that helps your family to rally around this goal, and keep it at the forefront of everyone’s mind.

5. Identify attitudes, expectations and actions that will need to change in order for your family to achieve this seasonal goal.  If you don’t make adjustments in other areas of your life, you will probably increase stress and frustration.  So this is where they kids need to understand that Dad won’t be around as much, they’ll need to do more around the house, they may need to cut back on after-school activities, etc. 

6. Identify milestones along the way that will show your progress, and decide as a family how you will celebrate these.

7. Schedule regular family check-ups – perhaps every two weeks or at least once a month – to monitor progress and see how everyone is doing. It is important to remember that, while you’re focusing on your finances for this season, you still need to make sure you are giving attention to the other key areas of your life.  The journey to financial freedom isn’t worth it if your marriage, health, and family suffer along the way.

Want to make major change in the financial area of life?  Give these suggestions a try and I believe your family can not only survive, but thrive through the process.

Comments

[Pam]

I agree that it is very important to have a specific goal in mind when trying to save. It truly motivates a person to make sacrifices in order to achieve it. Without a specific goal it is almost impossible to save for most people.

[MasterPo]

Just keep in mind the new "balance" point may be *considerably* lower than what you previously were acustom to.

[Holly]

We're struggling a lot with our goals when it comes to saying 'no' to the kids' requests. I have to admit to spoiling them w/clothes, 'goodies' at the grocery store, fast food on occasion, and a little extra spending $ for the movie nights and field trip souvenirs.

It's all changed and I think they're feeling some resentment.