Preparing for an economic downturn and relationship stress
Many economists are predicting that the economic ‘bubble’ will burst (if not, saying that it has already burst) – What does this mean for relationships? When the economy experiences a downturn, it doesn’t only hurt our hip-pocket, it also affects our relationships with our spouse, friends and family. Extenuating financial pressures, increased interest rates, potential employment instability, frivolous spending and money disagreements often results in the break-down of the marriage or union. With enough stress (of any kind) over a sufficient period of time, a relationship will crack.
With Australian divorce rates at just under 50%, how can you avoid joining this statistic? If you think that your marriage is on tender hooks, try to save it by ‘preparing for the worst’.
If you can see tough times coming, start:
- Communicating clearly. Be honest and open about your concerns. Try to avoid blaming anyone - don’t be emotive, be factual and find a solution
- Avoid downloading your frustrations on to your spouse or family. By all means, talk openly and be civil. If there is something that you can do to improve the situation, then do it
- Dating each other again. It can be as simple as a cheap eat, walk together, enjoying each other’s company. Strengthening your relationship is just as important as saving money
- Actively saving money and selling unwanted goods. Put this money into a ‘rainy day’ account and save it for when you are desperate for the cash injection to keep a roof over your head
- Writing your budget and sticking to it! Use the Divorce Answered Budget Tool to assess your income and outgoings. Balancing your finances may make the difference between running into debt or saving for the future.
- Planning for the worst, expecting the best. Have your contingency plans in place so that you can action them as necessary - a list of government agencies and charities that can assist you and your family should you require those services, review your housing, transportation and education costs…
- Reviewing your financial liabilities:
a. Refinance your mortgage while interest rates are low - Demand a better rate
b. pay off as much high-interest debts as you can
c. consolidate your debts
d. pre-pay expected large bills when you can
No one wants to be ‘one pay check away from poverty’. Fortifying and strengthening your relationship while actively reducing debt and becoming financially buoyant will assist in placing your relationship in a healthier place during a challenging economic downturn.