How To Protect Your Kids From The Recession

Whether you’ve been hit hard by the recession or not, kids and families may be reeling from the effects of the troubled times without a frame of reference for how tough it is out there.

Arun Abey, former investment strategist and author of the book How Much is Enough, from Greenleaf Book Group Press (www.howmuchisenough.net), believes that parents don’t just need to teach their kids about finances, but also about the relationship between money and quality of life.

“It’s not easy to say that money isn’t everything in a recession, but it isn’t,” Abey said. “It’s so easy to fall into the trap of making sure your kids understand the importance of making a good living financially, but if we leave out the part about lasting fulfillment in their careers, we’re shortchanging them. It leads to the avaricious corporate behavior that has been rampant in recent years where people pursue ever more money with no sense of meaning or perspective.”

Still, Abey also believes we need to get our kids smart about finances early to help protect them now and in the future. To that end, he offers some basic tips for families who want to get themselves – and their kids – smart now about financial matters.

• Don’t Let Money Be Invisible – Working-class families during the Great Depression routinely set jars out in full view of the family marked ‘Rent,” “Food,” “Clothes,” and so on, showing everyone where the money went. Today, money comes out of ATMs, and is spent via debit cards and credit cards – invisible to kids as to where it comes from and where it goes. Kids lack a frame of reference.

• Give Kids Responsibility for Spending – One of the ways to get kids smart fast is to present a situation in which real consequences exist, by placing them in charge of their discretionary spending. If they receive an allowance, then parents should require their kids to map out the money they have coming and also where it goes. Seeing it on paper or in a computer chart will give them a sense of reality about their money, and also build healthy financial habits they will cling to in later life.

• Teach the Power of Investment – A typical method parents use to get kids interested in saving money is to help them set up a savings account. The part that is often left out regard the value of that investment. Parents should spell it out. For example, a simple investment of $100 in a basic savings account can result in a balance of $12,000 after 20 years. If they invest that same $100 in a bond or a stock that returns merely 6 percent a year, that balance grows to $42,000-plus.

• For Love or Money? – Most affluent families try to direct their children toward high-earning careers, such as medicine, high finance or business management. Working class families stress education, and also try to drive their kids toward high-status career paths in an effort to help them get out of the pattern of hopelessness and disillusionment that characterizes many of their childhoods. However, there is an alternative method, which directs children toward career paths that stress their passions, what they love to do. This path stresses lasting fulfillment over financial rewards, even though, in many cases, people wind up with both by following this path. Ask your kids what they are passionate about and what they are good at. The answers to those questions will lead to a happier life and a better quality of life than one centered on the pursuit of the almighty dollar.

“I can’t think of a more important moment in America’s history to teach these lessons,” Abey said. “The current financial crisis, caused equally by reckless bankers as well as uninformed consumers, underscores the need for this kind of education and understanding. It’s critical not just for mom and dad, but for the whole family, if future generations have a hope of being spared the pitfalls that led to today’s crisis.”

Recession-Proof Your Credit

Instead of letting the recession get you down, take charge and get yourself under financial control. For most people in financial distress and falling behind on credit card payments, the natural response is avoidance. But putting it off until later won’t make it go away. Instead, the long-term effects are stress and damage to your credit history. If you are having difficulty making your monthly credit card payments, address it right away – before you miss payments and your account is reported as past due to the credit bureau reporting agencies. Once your account is reported, it could negatively impact your credit rating, which may then affect your ability to get additional credit in the future. However, there are simple steps that you can take to keep or get your payments back on track. Citi Cards offers these tips:


1 Talk it out. Financial troubles can happen to anyone. So don’t be embarrassed to explain your situation – honestly and immediately – with your credit card company. The sooner you talk to them, the better they’ll be able to help you get your finances under control.

2 Work it out. Most credit card issuers want to work with you to come up with a payment plan to keep your account current. Many people experience tough times, but no two situations are exactly alike. So work with your card issuer to see what temporary payment options may be available to you, such as:
· Lower monthly payments
· Reduced interest rate
· Waived late fees and over limit charges

3. Keep track of your account -- automatically. Once you’ve set up a payment plan, help stick to it by signing up for free online tools offered with your credit card. For example, Automatic Alerts notify you via e-mail or text message about important account activity such as due dates, current balance or payment notifications. Additionally, some issuers offer customers an Auto Pay feature ensuring that you’ll never miss a payment.

4. Stay the course. Once your payments and account are back on track, resolve to use credit wisely. For free helpful information on credit and financial management as well as interactive tools, go to www.UseCreditWisely.com


Citi urges its cardmembers approaching or in financial distress to call immediately to work out special payment arrangements that best fit their individual needs. As the world’s #1 credit provider, Citi is committed to providing a range of services so that customers can take proactive measures to protect the health of their credit and take control of their financial well-being.

How To Weather A Stormy Recession

Author Suzanne Caplan, chief blogger and founder of www.womenetcetera.com, an Internet business portal and social networking site for women over 50. Caplan believes that there are ways people can limit the damage of the recession and come out on top.

In the storm of a recession, Caplan believes higher ground does exist. You just need to know where to look for it. She offers the following tips:

• If you are doing nothing because you think it can’t get any worse; be assured that it will. Now is the time for action. Action is always preferable to inaction, because inaction spawns a pattern of victimization, and pins us down into a habit of only reacting to the bad, instead of planning for the better.

• The unknown is likely to be less threatening than you expect. This is particularly true about creditors; they have far less power than you may think. Tune out the noise until you are ready to work on a plan. Decisions made out of fear and anxiety are almost always the wrong ones, so take a breath and a blank piece of paper and write down a list of your liabilities and your assets and take stock of everything you can do to get the two lists to cancel each other out.

• Being Proactive is far better than being reactive. Once you know what you need to do with regard to any of your challenges, you should be the one to take the first action. Make it bold and with confidence. The more you play on your side of the field, the better off you are. Offense is easier to play than defense in this situation; you get to set the pace.

• If you are working in an industry at risk or for a company that seems vulnerable, now may be the time to move out on you own. Great fortunes are started in down times. Remember that most everyone shares one common trait with every successful entrepreneur – at one point or another; they’ve all worked for someone else, too.

• Think about taking over an existing business; there are owners who will finance the cost, particularly if they are close to retirement. Assets are very cheap at this point. Many business owners own more than one, and sometimes they are willing to sell off a profit-generating business in order to cover the losses of another. Take advantage of that condition to find an opportunity that matches your education, background and talents.

• The more diverse your clientele, the less likely you will be without sufficient income. Remember to market for growth. Don’t simply cater to your existing customer base, but rather, open your business aperture to include non-traditional potential clients. Those customers represent growth and prosperity. Do not put all your eggs in one basket.

• If you are living in or driving an asset which is overleveraged (you owe more than it is worth), give serious thought to getting out from under it. Like many large concerns, it is better to take a one-time hit to dump an upside-down asset than it is to continuing to allow it to pull revenue away from you a little at a time.

“In a storm, people can either be victims, or they can take positive steps to rescue themselves,” Caplan said. “The idea of mastering your destiny instead of letting circumstances master you is not a platitude or a bumper sticker. It is very real, and many of the most successful entrepreneurs discovered this reality at a time when they were at their lowest ebb.”

Recession Got You Down? Don’t React – ACT!

Connie Podesta, business consultant, speaker and author believes that even the least advantaged worker has the power to be proactive in protecting livelihood and career, even in the most trying of situations.

Podesta’s real world tips include:

• Take charge of your personal life - As one CEO said, “I want people working for me who come to work ready to get the job done - people whose personal life is stable and healthy enough that they can direct their attention and energy to their work, their customers and their colleagues.”

• Demonstrate your added value - Employees have to recognize that every one of their decisions, ideas, actions, and plans must be linked to the long-term financial stability and growth of their company. According to a business owner, “We are looking for employees who not only understand the need for us to remain financially sound, but who are actively involved in finding ways to help us do that.”

• Have a positive impact - Employers do not have the right to evaluate our inner attitudes, beliefs, and feelings, but they DO have the right to evaluate how we behave and perform on paid work time as a result of those attitudes, beliefs, and feelings. Employers expressed an overwhelming preference for employees who model a positive attitude through their performance and behavior.

• Embrace and initiate change - Change can be frightening and change can be exhilarating. But one thing is certain: change has become a permanent and necessary fixture in today’s business environment. Employers will keep employees who can adapt to all the changes their organization is going through with professionalism, determination, and optimism. They need employees who are resilient enough to face change boldly without resorting to complaints, apathy, anger, or fear.

• Work smarter, harder, faster and better - One manager stated, “Which employee would I keep? Why, of course, the one who can get a quality job done - on time. I need employees who aren’t afraid of hard work, who can be counted on to do the job right, and who don’t need constant reminders or supervision. They know what needs to be done and they do it - it’s as simple as that.”

• Communicate openly and directly - Employers want people who can most effectively communicate their needs, preferences, ideas, and feelings to their customers, co-workers, and management team without manipulation and game playing. In order to achieve this level of assertive, open, and honest communication, however, a climate of trust and mutual respect must exist throughout the company.

• Look for leadership opportunities -“Which employees would I keep?” One business owner replied, “The ones who are willing and able to assume a leadership role and take charge when necessary and appropriate, regardless of their job title.” Good leaders are positive role models and relationship builders who can be counted on to be trustworthy, resilient, optimistic, enthusiastic, and visionary.

Is the Recession a Holiday Gift?

"We assume the recession is a bad thing, but it may actually be a blessing," says Sharashkin, editor of The Ringing Cedars Series (Ringing Cedars Press, June 2008, ISBN: 978-0-9801812-0-3, $15.95). "Why? Because it forces us to re-evaluate the way we live. As a culture, Americans need to slow down, cut our consumption, rediscover our spiritual selves. Most people spend too much money mindlessly, and worse than that, we spend our precious time mindlessly. The recession can inspire us to get mindful about both."

Sharashkin offers the following hints for unearthing the recession's hidden gifts:
Re-evaluate your work life. Are you working too much? Does what you do make you unhappy?
Make a conscious decision to consume less.
Quit spending so much money on the people you care about. Instead, spend time with them.
Take a TV sabbatical. Watching TV saps your time and energy. It overstimulates your senses, making relaxation more difficult—especially close to bedtime. And it's particularly harmful to children, whose minds and value systems are highly impressionable.
Create and nurture a vegetable garden. The Ringing Cedars Series frequently references Russian Dachniks—gardeners who live on small plots of land and spend much of their free time cultivating abundant fresh food gardens that produce the majority of the fruits and vegetables that make up their diets.

"Suffering has a purpose: It signals the need for change," he says. "And it's often the precursor to immense growth. The pain America is feeling from the recession is telling us we must change our unsustainable ways.
"You may think, well, I can't change America, but you can because we're all connected," adds Sharashkin. "You can change your own life. Your family can change theirs. Your neighbor, inspired by how much happier you seem, can change his. Every life touches other lives, which in turn, touch still other lives. And if the recession can facilitate this kind of change, it's a great blessing indeed."