Released February 18, 2009
UNIVERSITY PARK, Pa. — With job layoffs mounting by the thousands almost daily, many families worry that it will happen to them. So a family-finance specialist with Penn State's College of Agricultural Sciences points out that proactive strategies can buffer a family against looming layoffs.
Marilyn Furry, who develops financial-education extension programs as an associate professor in the Department of Agricultural and Extension Education, explains that facing a potential layoff together can reduce expenses even as it gives a family an active way to confront the fear that the threat generates.
"Once dollars become scarce, families have much less flexibility to determine which are necessary versus unnecessary expenses," Furry says. "Now is the time to plan new spending priorities, and to involve all family members so there is a shared approach to cutting costs. This approach fosters greater understanding of your financial situation and increases family cooperation. Older children can take an active role in deciding what goods and services have the highest priority and which purchases can be postponed or eliminated."
Furry advises families to start a "dollar watch" as a way to talk about how they can significantly reduce the expenses within their control, such as telephone services, recreation, entertainment, clothing and clothing care, household supplies, utilities, transportation and even food and eating out.
"Have each family member oversee a number of 'dollar watch' expenses," she says. "For example, one family member could check on lights and ways to reduce utility costs, investigate no-cost recreation and learn to perform services such as haircuts at home."
Furry warns that changing spending habits isn't easy, and a structured approach allows families to work out the inevitable disagreements while keeping family reduction plans on track. She offers a few techniques to help set spending priorities and reduce expenses:
- Practice smart shopping. Using a list any time shopping is necessary — not just in the grocery store — helps everyone to avoid making unnecessary purchases on impulse.
- Go on fewer shopping trips. Reduce the number of times you visit stores. "With fewer shopping trips, you may have additional time for more do-it-yourself projects," Furry says. "This also eliminates shopping as recreation, including window shopping or going to a mall to check on 'sales.'"
- Buy generic or store brands. Substitute store brands and/or generics for national brands of many items sold at discount and grocery stores or pharmacies.
- Avoid waste. "Your family probably has many opportunities to eliminate waste of any kind, especially when it comes to food, housing, transportation and energy," Furry says.
- Get more information. "There are many sources of information to help you make better choices in the marketplace for food, clothing, entertainment, telephone calling, personal care and other expenses," she explains.
- Adopt a do-it-yourself philosophy by increasing the number of things you make or do at home and buying fewer conveniences and services.
- Find it for free. "Goods and services you can get for free really help to stretch income," Furry says. "Tax dollars are allocated by the community for everyone to use, including a variety of free or low-cost recreational and entertainment opportunities, educational programs, health services, Penn State Cooperative Extension and other resources."
Furry and other Penn State consumer-issues faculty have created a series of 11 fact sheets titled, "Bouncing Back When your Incomes Drop," to help families that have to make adjustments in meeting basic needs when there is a job loss or some other event that causes an unexpected loss of income. The series and other publications and fact sheets are available online at http://consumerissues.cas.psu.edu/pubs.html.
Single copies also can be obtained free of charge by Pennsylvania residents through county Penn State Cooperative Extension offices, or by contacting the College of Agricultural Sciences Publications Distribution Center at (814) 865-6713 or by e-mail at AgPubsDist@psu.edu. For cost information on out-of-state or bulk orders, contact the Publications Distribution Center. Penn State Cooperative Extension county offices also provide a variety of educational programs to help residents improve their skills to stretch limited dollars.
--30--
http://live.psu.edu/story/37758/nw69
Contacts: Marilyn Furry, (814) 863-7428, mfurry@psu.edu
Gary Abdullah, 814-863-2708
Chuck Gill, 814-863-2713
