My dad lost his job when we were kids. My mom was staying at home to raise us, so there was no other income. Now, my dad was an executive with a big corporation, and he left with a decent severance package, as well as unemployment benefits. But he made it look like the sky was falling on our heads – like we were on the verge of getting evicted and thrown out on the street.
It was very unsettling. We were homeowners in one of the best neighborhoods of Paris. My sister and I each had our own room, and there was a fourth spare bedroom as well.
Well, after dad lost his job, some things changed and some didn't. We were still going on holidays. And we still did a ton of extracurricular activities – some of them pretty expensive, like horse riding and private piano lessons. At the same time, my dad was rationing toilet paper and screaming at us when we would leave a light on in a room we weren’t using.
I was 11 or 12, and that year, Saddam Hussein invaded Kuwait. Everybody was talking about World War III. There were news clips of French people ransacking supermarkets and stockpiling flour, sugar, and oil. On top of that, I'd just read Anne Frank’s diary and another half-dozen war stories. Those made me freak out even more.
I thought we’d have to move to a farm in the country to be able to survive.
Meanwhile, as summer approached, we were making plans to stay on a Mediterranean island for a month, as usual. Something was off.
What I didn’t get back then was that my parents had ruthlessly cut on every nonessential spending item – that is, what they considered nonessential. Everything changed when dad lost his job. Spending on private school, piano lessons, and holidays? Those were essentials. Brand-name clothes, premium food, and four-ply toilet paper were not. Because I received no explanation, I felt a bit lost.
On the plus side, it made me want to go out and get a job. A year or so later, when my dad still hadn’t found a job, I offered him all my savings – around $2,000 – to keep us afloat a little longer.
He looked at me, puzzled. He crunched the numbers to see how on earth a 12-year-old could have $2,000 in her piggy bank.
Then he said, “It’s good to know we have that added safety net. Thankfully, we don’t need it just now.”
I think that’s when I realized that our financial situation wasn't so dire. We were doing okay. However, the impact it left on me when my dad lost his job has been lifelong and life-changing. I would feel broke if I didn’t have enough to cover next year’s expenses in my investment accounts.
Different Childhoods, Different Attitudes
My little brother, who's 17 years younger than me, grew up under a different, more fortunate set of circumstances. As a result, he is pretty careless with money. When I took him hiking around the Grand Canyon for two weeks as his graduation present, he couldn't understand why I refused to spend on expensive restaurants and hotels. “We’ve already crossed the ocean and rented a car. And we're lucky I can afford to treat us to a two-week holiday. But I don’t think it adds value to the trip to have a $150 meal,” I would explain.
Sometimes he got it. Sometimes he just wanted me to buy him this or that, and there was no reasoning with him.
I often wonder if we would’ve been equally indifferent to our parents if they'd explained the adverse circumstances to us. Now that I'm a grown woman who knows much more about life and money, I wish they had treated the emergency a little differently.
A Final Thought
For anyone who finds themselves in similar situations, I would advise that you try not to dramatize your situation too much if you encounter hardship – even if that may be your first instinct.
Instead, calmly explain the facts. Show a can-do attitude and assure your kids that things will get better, even if they have to tighten their belts for now. Children understand and change according to the challenges they face. And if you take them into confidence and make them partners in dealing with the situation, they might even develop a healthy attitude towards money in their adult life.