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Finances: Are You On the Right Path?

September 4, 2012
By Erin Flynn Jay , forParentsOnline.com

Here is an excerpt from Erin Flynn Jay's chapter "Finances: Are You On the Right Path?" from her new book "Mastering the Mommy Track: Juggling Career and Kids in Uncertain Times."

These are trying financial times for countless working mothers in the United States and their families. As of summer 2011, eight million former US workers are searching for jobs; an astounding six million have given up. Corporations have matched earnings

reports from 2006, but with 2.5 million fewer workers. Most workers who lost their jobs during this recession have been unemployed for over six months a majority over 12 months and are fearful they will never recover economically. And the companies that show the most dramatic increases in profitability also add the fewest workers.

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In January 2011, I read in the Philadelphia Inquirer about how the long-term jobless were losing hope and prospects. This resonated with me because my husband Jason had been out of work for so long, and we both were discouraged about his full-time career prospects. The article featured Donna Oxford, a 53-year-old who was laid off from an e-commerce company in December 2007. Six months after she was laid off, she gained custody of her two-year-old grandson to keep him out of foster care. She wrote a moving

poem, "Today I Lost a Tooth," that recalled her state of poverty, lack of medical and dental insurance, and so forth.

I read this in a local Starbucks with my two daughters and was moved to tears by her story. Millions of mothers single and married have found themselves in unfortunate situations today, concerned about how they will support their children. I knew that cold day in January I had to write this book to address these unprecedented obstacles women were facing.

Sally Andrews (name changed), a working mother who lives north of Boston, is one mother who has learned how to trim expenses. Married with an eight-month-old child, she recently left the big corporate job for a job at a small company closer to home. She wanted to spend more time playing with him rather than commuting back and forth from her corporate job.

"I took a good-size pay cut when I changed jobs so we've had to really watch our spending. I used to buy my lunch every day, but now I make it at home, which has increased my grocery bill some, but it's manageable,' she said.

Andrews also learned she doesn't need to keep up with "the Jones."

"Buying things from the Dollar Store or discounted places doesn't make me cheap or poor I think of it as thrifty. I've taken in a lot of hand-me-downs for my son and have shopped at consignment shops. Babies outgrow things fairly quickly so some items don't need to be purchased brand new," she admitted. "I found a great consignment shop in a well-to-do neighborhood that has brand name items for my son at a fraction of the original price. They've been gently worn but no one can tell unless I tell them."

Andrews thinks you just have to know where to cut corners and where you cannot skimp: "I will skimp on clothing and housewares (superficial things) but I won't skimp on food or healthcare (things that directly affect me and my family's health)."

Jason and I have held back on what now seem to us to be frivolous purchases such as clothing, dinners out, vacations and travel. We won't cut corners when it comes to our family's wellbeing. Quality food and healthcare are imperative.

Revised Spending Plans

How has the Great Recession affected other working mothers' financial decisions? Kimberly Foss, CFP, a personal finance expert in Roseville, Calif., said almost all of her clients,working or retired, have put into place a revised "spending plan" that matched their incomes either as W-2 wages or retirement income. On average, Foss has seen her clients cut usually 20 percent to 30 percent of their spending plan's expenses over the past 36 months.

"My mothers are much more cost conscious and are making purchases in bulk, placing what could be "wants" on a "watch list" for 30 days before purchasing the items," Foss said. For example, perhaps a new suit for work would be placed on the watch list. After 30 days, they revisit the items and typically the mother forgoes the new items because she has spotted a suitable replacement at a consignment store."

Deana Arnett, CFP, a senior planning consultant at Financial Planning Services in Northern Virginia, said the Great Recession has caused people to hold onto their money more tightly.

"Mothers tend to be less of a risk-taker than fathers, and the recession has intensified that tendency. Mothers are inclined to look at ways to juggle all of the household responsibilities getting the kids to school, making dinner, paying the bills," she said. "The Great Recession has forced them to look at how they can do things more efficiently and trim the fat."

These challenging economic times have changed the advice some finance experts offer. Foss has advocated even if you have $5 million in the bank, to cut your spending down to 65 percent "needs," 20 percent "wants," and 15 percent "savings," for example.

Erin Flynn Jay is a writer and publicity expert. Since 2001, she has been promoting authors of new books and small businesses in all industries. Erin's articles have appeared in diverse publications including careerbuilder.com, MSN Careers, Brandweek, Costco Connection, Opportunity World, Sales and Marketing Excellence, The New York Enterprise Report and Wealth Manager. Erin received a B.A. in Communication from the University of Scranton in Pennsylvania and lives in Philadelphia with her family. www.flynnmedia.com; erinflynnjay.com. Order Erin's book at Amazon.com: http://amzn.to/PWThUb.

 
 
 

 

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