Adjusting to Suddenly Reduced Income
Setting Goals to Target Limited Money
"Goals reflect what is important to you and help you get what you need and want."
When an income loss occurs, it is not only a time to reassess daily spending patterns, but a crucial time to rethink goals. People often create goals unconsciously, but at times of income loss it is important to discuss them with others who are affected. Doing so will focus the use of the reduced amount of money available during the next several months.
Goals reflect what is important to you and help you get what you need and want. They give direction and meaning to how you spend your money. They need to be specific. For example, rather than, "We are going to reduce our spending," a more specific goal would be, "Each of us will identify two ways we can reduce or stop spending for the next two to four months."
Discussions about goals need to involve all who will be affected. Reducing spending patterns is most effective if decisions are made together. Unplanned income changes often affect the goals of individual family members, the mutual or combined family goals, and the goals of the family business or enterprise if there is one.
Identifying Goals
Goals reflect what is important to you and help you get what you need and want.
You will need to identify goals at the personal level and the family level. If you are part of family business or a farm enterprise, you will also need to identify goals at that level (Figure 4). Discussion and agreement of mutual goals is needed at both the family level and the business/enterprise level. It is harder to decide on mutual family and business/enterprise goals than personal goals because the whole group needs to agree on them. However, setting these goals together will allow you to use money more effectively and reduce the possibility of conflict in the group. Worksheet 2 can help you target where your limited money resources need to go in the next few months. This worksheet is best completed alone so other people cannot influence your goals.
Figure 4. Three Steps to Setting Mutual Goals
How Men and Women Set Goals
Research has indicated that men and women tend to look at things differently and, thus, they may have different types of goals. Womenhave been socialized to take care of others' desires ahead of their own. It is often very hard for them to know clearly what they would like for themselves. They often go along with their spouse's expectations only to experience considerable resentment later. Therefore, it is critical that the woman figure out for herself what her goals are in light of the income loss and how they can best be met.
Men, on the other hand, are mainly task-oriented when communicating and making decisions. Doing what needs to be done to put the finances in order seems the most logical thing for them to do. They take a business-like approach to most family situations. It is important for men to consider the expectations of other family members and share ideas about adjusting to the family's income loss.
Family Discussion of Goals
Personal and family goals need to be shared. The family discussion lets all family members know which personal goals of individual family members and which agreed-upon family goals will need money resources in the near future. Children need to be involved, too. Their goals may be more simple and less expensive, depending on their ages and needs. Not being able to buy the special shoes may be important to them. When children are included in discussions, they will see what the adults are giving up and understand why they must give up something, too. Once family goals have been talked over, those involved in the family business should meet to discuss their agreed-upon business goals and how they are affected by the income reduction.
Setting personal, family, and business goals in this manner makes it easier to identify each person's goals, whose need has not been met, or who must be involved to meet a given goal. Many times families or family businesses discuss goals together without having considered their goals at either the personal or family level. This becomes very confusing because individuals are not clear about which goals are personal, which are family goals, and which are business goals.
Without clarifying this first, agreeing on mutual goals for the family or family business is very difficult and often cannot be accomplished. When this happens, one person may dictate the family goals or the family business goals. Instead of having resources of time, money, energy, and skills focused toward agreed-upon goals, family members compete for these resources to meet conflicting goals.
Having mutually agreed-upon goals does not mean everyone works on each goal all the time or in the same location. It may even be that you agree to live with some disagreement. Concretely, it may mean that someone who is good at numbers does the financial record-keeping for the family and others agree not to spend more than a specified amount before consulting the rest. In a family business it may mean that each person will contribute to the family business according to his or her skills or interests. For example, someone may work primarily with the machinery and another deals with the customers.
After goals are identified, you can begin to allocate the money and other resources to meet these goals. Worksheet 3 guides you through this process. The more concrete you can be about the goal and the steps needed to achieve it, the quicker you will begin to take action to reach it.
