sealPurdue News

March 1999

Plan, don't procrastinate, when income plummets

WEST LAFAYETTE, Ind. -- There are many things a family can't control, but how you deal with a reduction in income isn't one of them.

"Don't waste energy blaming yourself or others," says Janet Bechman, Purdue University Extension Specialist in consumer sciences. "Set your mind to deal with the situation as it is, not as you wish it were."

Bechman recently completed a tour of the state, advising hog farmers and other producers how to manage their family finances. Pork producers nationwide faced near ruin as farmgate prices for swine plummeted to the lowest levels since the Depression. Pork prices dropped as low as $8 per hundredweight in December, and they still hover below what it costs to raise a pig.

Jane Zook, a farm wife from Flora, Ind. says the reality isn't always easy to accept. At the hog and grain farm that she and her husband, Sam, own, expenses went up at the same time that pork prices fell. "You always think it's going to get better," Zook says. "You want to stay optimistic."

However, Bechman says quick action is one of the best weapons in handling a loss of income. "People who make changes early are more satisfied than those who make changes later on. They feel more in control of their finances," she says.

Bechman says the first move should be getting all the information about your finances down on paper. "When you write down your resources, assets and expenses, they become more real," she says. "A little knowledge goes much further than either imagining the worst or ignoring reality."

Once you see the figures in black and white, Bechman says, the next step is to plan. "Communicate with family members and include them in the decision-making process," she suggests. "Family members need to agree and work together to carry out the decisions made."

Questions to ask include:

  • Which expenses are most important?
  • What can we do without?
  • What purchases can we delay or replace with cheaper substitutes?
  • What talents and skills do we have that might be used to produce additional income?

The Zooks decided to sell a truck to raise some cash. "I also took on a part-time job," Zook says. "The whole family has had to adjust to a new routine with me working three days a week."

When communicating about finances, Bechman says, don't forget to talk to creditors. Worrying about overdue bills is one of the most stressful outcomes of a loss of income, she says. She suggests reading over credit contracts to find out what happens if you miss payments.

"If bills are overdue, contact your creditors before they contact you," Bechman says. Most creditors will work with families to come up with a reasonable way to pay off debts. Zook negotiated a payment plan with her family doctor when her daughter broke her arm. "And rather than take all five of our kids to the dentist at once, we've spread out our visits. It's less convenient, but more affordable," she says.

Other tips for reducing spending include:

  • Cut back on trips to the grocery store. Make one big shopping trip when you receive your paycheck and then don't go back every few days for just a couple things.
  • Take a list to the grocery store and stick to it. Zook says that if she needs only a couple items, she sends her son into the store and he buys only the things on the list.
  • Record all purchases you make in a week -- even the little ones. Bechman says it may surprise you how the money spent on gum or soda pop can add up.

Outside of the immediate family circle, there are community resources that also can be tapped in times of need. Services include free or low-cost health care, food assistance programs, local thrift shops and financial counseling services.

"Remember, don't suffer alone," Bechman says. "See if you can swap items or services with friends or neighbors." She says communicating with others about the problem can open doors and provide new ideas or support.

Sources: Janet Bechman (765) 494-8309

Jane Zook, (219) 967-3041

Writer: Beth Forbes, (765) 494-9723; e-mail,

Purdue News Service: (765) 494-2096; e-mail,

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