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Safe harbor in a storm

Economy | More families than you will hear about have found ways to recession-proof their finances

Issue: "Geo-gizmos," April 25, 2009

Tune in to any 24-
hour news outlet and you will hear that hard times are forcing more and more families to turn to the government for help-but families that are making it on their own get little attention. I asked four families in the middle of the country how they are getting by.

John and Tiet Parsons, married in 1977, are Baptists who have lived in their home in Arlington, Texas, for 30 years. John directs an agency that helps people who have fled other countries to start their lives over in the United States. Tiet, who fled Vietnam when it fell to Communism in 1975, is a homemaker and a homeschooler. They have raised four children in a single-income home by emphasizing careful spending: "We haven't paid a late fee or finance charge on a credit card in 20 years. . . . No debt. We buy things when we have the money to do so."

Tiet points out that many Vietnamese families living in America either have their home paid off early or save up their money to buy their house. "Families with two incomes usually manage to live with one and save up the second income to pay off the house," she said.

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Sergio and Tracie Leal, who married in 1991, own "Leal's Tortilla Factory" in Muleshoe, Texas, a West Texas town of 5,000 people where Sergio and Tracie married in 1991. The factory has 20 employees and has been in the Leal family since 1957. The Leals have five children, all of whom attend public schools. Tracie works at a junior high school one or two days a week, but her main job is as a stay-at-home mom. The Leals have house debt and car payments but owe nothing else. The tortilla business is doing well, Sergio says, but with family spending they still "watch things closely." He fears that "looking to the government for help fosters a dangerous dependency."

Rick and Vicky Williamson of Mountain Home, Ark., have been married for 24 years and have two children. Rick, a Roman Catholic, owns a small business with three employees that sells standup arcade games, pinball machines, pool tables, and other supplies for games. Vicky teaches a computer class for kindergarten students in a public school. When Rick saw a slowdown coming, he began repairing and refurbishing games and pinball machines and gave bonuses to his employees for learning to do repairs. He says, "I don't owe anybody a dime. . . . I'm tired of the government bailing everybody out. I was born working and I've worked for what I have now. . . . Just because I have enough money in my pocket to go buy a pizza doesn't mean I should go buy a pizza instead of a tank of gasoline. Save before you spend."

Garry and Roberta Grau in Lubbock, Texas, have two children, both grown. Garry, a Presbyterian, is vice president of a small business that handles tax preparation. His wife is retired from Lubbock State School, a state facility for mentally handicapped children and adults. Their home is paid off and they are debt-free and able to carry through on vacation plans this year. Garry said his longtime plans for retirement have been affected by the stock market plunge to the point that he doesn't see retirement happening for some time. Yet he still seems relaxed about financial losses: "I believe the market will come back eventually, but more than anything I trust in the Lord."

All four of these families have minimized debt and emphasized savings and careful spending. Other families have faced job losses and may not have had an income that allowed them to develop any cushion. For these four families, though, careful stewardship is allowing them more easily to endure the hard times currently wrecking many other families.

Five rules for recession-proofing your life

Tiet Parsons escaped the fall of Saigon in 1975 and arrived in the United States a 21-year-old Vietnamese refugee. Two years later she married American John Parsons and the couple has raised four children on a single income, she says, by applying standards from Vietnamese culture-"We cut corners here and there just like the ants stashing up bits here and parcels there"-and by following "the biblical teaching that declares that the borrower is the slave to the lender and not to be anyone's slave." WORLD personal finance writer David Bahnsen adds that for those feeling the effects of the recession, other specific principles to consider include:

1. Eliminate or reduce debt. Often recessionary times take away the resources and means most needed to reduce debt, but the fact remains that through sacrifice and thorough evaluation it can continue. Incomes often contract during recessions, but if you can reduce your debt service expense, you will be much better off.

2. Never, ever abandon investment and savings commitments (when you still have the resources to fund them). Most money is made coming out of recessions; if you can maintain your investment contributions during hard times, you will see exponential benefits. Be opportunistic.

3. Be conscious of how the recession is affecting causes and institutions you care about. No one hurts more during economic slowdowns than the churches and schools and nonprofits that rely exclusively on donor giving.

4. Prioritize your various financial goals. Something may have to go. Carefully evaluate what goals belong where on your financial totem pole.

5. Don't lose faith. Prayerfully consider what God is doing in your life and in the bigger picture around you. He knows the hair-count on your head, and He has plans to prosper you, not to harm you.

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