a family - a business?

iVillage Member
Registered: 05-11-2005
a family - a business?
4
Tue, 03-14-2006 - 7:13am

I was laying in bed yesterday and I had a thought, which probably a lot of you already had and I would like ideas and input on it.... a family is like running a business. If you have a business and are so in debt that you can't get out anymore you go bankrupt. The same principles applies for managing the family finances. Its like a small company. Too much debt you go bankrupt. So the question is, can we use business sence and use what companies and firms teach us regarding business management and business decision or is there a difference after all?

Sushi

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Tue, 03-14-2006 - 7:42am

I think it's different in that there are emotional ties to some of the decisions.


For example - Let's say John Doe at your company wants to take a $100.00 seminar but you know you can't afford it, you don't really have any vested interest in saying No - it doesn't affect you emotionally.

iVillage Member
Registered: 05-11-2005
Tue, 03-14-2006 - 7:52am

I understand what you are saying, but I think I would tell my son "No" because we can't afford it. I have told my daughters no because we couldn't afford it and my husband and I have said no a lot to ourselves for the same reason. I suppose there is more emotion involved if it is your family and it hurts more to say no, but if you can't afford it you can't afford it.

I found out the other day that my now married daughter is deeply in debt and everything in my Mom-heart wants to help her, but I can't do it without breaking us. Wouldn't a business ac the same way? Make decisions of what can you afford and will it break you or make you?

Sushi

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Tue, 03-14-2006 - 8:44am

I guess it depends on the age of the kids in question.

iVillage Member
Registered: 03-17-2003
Tue, 03-14-2006 - 8:50am

Sushi, I am in total agreement with you for two reasons:

1. When I was a SAHM I jumped off the professional fast track to be at home full time. Running a home is no different than business management. You don't think there is an emotional tie to multi-million dollar investments that could land you in the line of the unemployed and doom your career (which has a direct bearing on whether Johnny gets braces this year or never)? Or legal decisions that can ruin a family owned business or a private citizen? Think again. The other side is how penalized SAHMs are when they decide to re-enter or enter the work force because they are deemed to have "no skills". My sister-in-law stayed home and raised 4 children, juggled schedules, household budgets, planned and executed church groups, Brownie and Girl Scouts, met deadlines, nursed the sick, you name it and when she wanted a receptionist job she was told she had no qualifications. The woman had been accomplishing more in one day than most employees, but the work she had been doing was not seen in the business-sense. Hogwash.

2. Anyone who has dealt wth debt, creditors, collection agencies, banks, unpaid bills, juggling month-and-money (what I call M&Ms) know darn good and well it is business. Creditors hope you make emotional decisions to spend. They will get your home equity if you buy into their advertising. They will tap your retirement accounts if they scare you enough. It's the business of emotional advertising. How many times have you heard the ad line "Don't leave home without it" When you hit a rough patch, just as a business does, your creditors want money, you signed an agreement that is slanted in a credit issuers favor and if you go back and read it you will see it is a legal document couched with legal terms and it is a business arrangement you entered into. Check your feelings at the door because dealing with finances in this country is NOT about feelings, it's about facts, credit-to-debt ratios, litigation over unpaid debt, wage garnishments, credit scores, credit reports, employment records and income, corporate finances, credit issuers traipsing on your rights (calling all hours of the day and night, threatening garnishments, taking your home) and anything else they can do to push your emotional buttons.

We want to do the best we can for our families but it is the business of personal finances and household management that keeps us in check and we refrain from blowing money, also called impulse control, because we FEEL we should do such-and-such.

So you have my vote sushi.

Carolyn

p.s. we have had some good threads on a sister board discussing this topic. http://messageboards.ivillage.com/n/mb/message.asp?webtag=iv-mldebtqa&msg=5420.1

And yes bankruptcy is a viable option and less than roughly .01 credit accounts in this
country are included in personal bankruptcy. Enron alone wrecked far more havoc with their corporate bankruptcy than any year of personal bankruptcy. Again, it's the business of debt and a purely business decision.