If you haven’t read the first part of this series, I’d suggest you do so first, to gain a perspective on my comments below.  If you are a business owner, executive, or manager, you may want to read the second of this series, which is written specifically for you.  Here’s my third and final part – in this one, I don’t focus on the “sales” issues, but rather on the personal challenges of trying to live, and guide a family, through these difficult times.

Q. I’m seeing a lot of anxiety and nervousness about the economy all around me. Do you have any thoughts on how to respond to this?

To my readers…This is the third of a special three-part series written in response to a question from one of you.  The question is this:

A little background.  At the onset of the last financial contraction – the 2008 real estate crash — just as this crisis was beginning to show itself, I wrote an email to my adult children addressing this issue.  What follows is that email edited a bit for you.

Be forewarned!  Because of the intensely personal focus of this message, I go places that I don’t normally go in this blog and discuss issues that I don’t generally address in this venue.

What you should do, personally…

1. Shore up your income stream.

If you have a job, keep it.  If you don’t, work hard at getting one, understanding that next year there will be a whole lot more people looking for work.

Take the attitude that you are grateful to be employed, and work hard at being a good employee.  Find ways to make yourself valuable to your employer so that when he/she is thinking about reducing the workforce, your position will be one of the last he considers.

Make yourself more valuable.  If you are in school, stay there and get a practical degree.  If you are close to a degree or certification in some fundamental skill, invest in yourself and gain that credential.  Look at it from the employer’s perspective:  With a world full of job candidates, why should he hire you?  What value do you bring?

At the same time, proactively expand your network.  Make it a point of meeting people who may be in a position to help you at some time in the future.  If worst comes to worst, you may need to rely on the people you know.  Therefore, know more people.

2. Harness all the resources of your household for the benefit of the household.

If you have a family, then everyone in the family should be contributing something to the sustenance of the household.  That means that children should also contribute.  Older children should look for jobs and, as soon as they are able, contribute to the household expenses by contributing a portion of their earnings to the expenses of the family.  To allow them to not contribute to the household is to develop in them an entitlement mentality, and encourage a sense of irresponsibility.  The most irresponsible adults I know were trained to be that way by parents who thought that expecting children to contribute was horrible.

If they are not old enough to work, they should be expected to contribute in other ways.  For example, they can learn to help care for younger children so that you don’t have to pay a babysitter.  Or, help with meal preparation and clean up, to allow those who are working to have a bit of a respite.  Or, they can help by doing things for neighbors or helping around the house.

In the bigger picture, your job is to use the economic circumstances you find yourself in to develop your children’s character.  This is an excellent opportunity to help them learn life-long lessons.

3. Change your lifestyle and reduce your cost of living.

You’ll have to make the same changes that we made, that your grandparents made, and that their parents made:  Tighten up, protect your core, and do away with most of the marginal discretionary expenses.  There is a time to splurge and treat yourself to some luxuries.  This is not it.  Specifically:

Stop eating out so often.

This is a huge expense.  Make meals in, and pack your lunch.  Eating out should be a treat, not an expectation.

Stop living on your credit cards.

I’ll say it again, although you have all heard me say it before.  Today, cut up all but one of your credit cards.  Stop, today, charging anything.  Keep the one for emergencies.  Work to pay off your debts.  As long as you are in debt, you will be a slave to your debtors and will not have the freedom to make other choices.  Debt reduces your options.

Create a budget and stick to it.

Sooner or later you will be forced to live on your income.  Do it now so that you don’t find yourself shackled in debt.  Decide which of you will be responsible for which bills, and allocate money from the family’s resources appropriately.  Decide how much you are going to spend on entertainment, food, clothing, etc.  Put that much money aside out of each paycheck.  When it is gone, it is gone.

See if you can do it, whatever it is, for less than you have budgeted.

If you have any money in that category left over at the end of the month, add it to your savings account, or use it to pay off your debts.  For example, for years, every time I brought or skipped lunch, I would put $5 into savings.  I figured I saved $5, and I split it with myself – $2 into savings, $3 for me.

4. Immediately, save something out of every dollar of income.  Create a savings account and put something into it out of every paycheck, even if it is only $5.00.  You will have emergencies and unexpected expenses.  You can either charge them, thus incurring more interest expenses and charges, or you can pay for them out of your reserves.  Start creating some reserves.

5. Look for every opportunity to make and/or save money.  Find bargains you can sell on E-bay and make some money.  Buy your casual clothes at resale shops.  Buy food in bulk and break it up into smaller portions for the freezer, etc.

6. Finally, but certainly not last in order of priority, get yourself right with God.  God uses adversity to bring people closer to Him.  When you are living a stress-free lifestyle and charging everything, it’s easy to focus on things and not on Him.  When you find yourself up against real adversity, you naturally seek Him.

Seek Him now.  Develop a relationship on which you can count.  Believe it; it takes time, work and energy to establish a close relationship with God.  If you have ignored Him for decades, don’t expect that He’s going to appear as a magic genie and sweep away all your problems.  We do, however, have a number of promises:

“But seek first His Kingdom and His righteousness, and all these things will be given to you as well.”          Matthew 6:33

“Do not be anxious about anything, but in everything by prayer and petition, with Thanksgiving, present your requests to God.”  Philippians 4:6

Establish that relationship now, so that you have it to rely on.

You can, of course, dismiss this as the ranting of a guy who is out of touch with reality.  That’s your choice.  I’d suggest that a more appropriate view is to recognize that I have a longer-term perspective on things, and some experience to share.  My belief is that human nature is the same generation after generation.  The reason we are in this mess is greed and stupidity on the part of a couple of generations.  It was predictable.  Your character will dictate your life’s situations.  Lack of character will bring adversity; sound character will bring prosperity.

In the next few years, you will be tested.  Let’s hope that you have the right stuff within you to come through this time stronger than when you entered it.