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Family Resource Management

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Family Resource Management

Introduction

COVID-19 is an uncommon type of human coronavirus is the causative agent of the

respiratory illness. Researchers are still investigating the roots of the virus. However, there is a

high likelihood that the virus was first discovered in animals. After infecting a person or many

individuals at some point in time, the animal eventually started spreading the disease to other

humans. The widespread distribution of COVID-19 has, amongst other things, throwing the

world economy, educational system, and political alliances into disarray. People have a hard time

functioning at work and keeping up with their everyday responsibilities. COVID-19 has

impacted people of all ages. However, it seems to have a greater impact on people of low socio-

economic status. Impoverished families have faced significant challenges at the onset of

COVID-19, and their financial resilience is fully stretched. Social institutions need to work

together in order to improve family resource management during and after the pandemic in order

to cushion impoverished families from a looming crisis

COVID-19 and Family Financial Resources

According to Gupta et al., the issue of the economic impact of COVID-19 on

impoverished families in rural areas is not fully understood. The authors argue that this is the

case due to a lack of detailed micro-survey data at the family level. Two of the factors that have

been demonstrated to contribute to the high rates of parental melancholy are economic hardship

and job insecurity (Gupta et al., 2020). Both of these factors have been worsened by the COVID-

19 pandemic, which has also increased the severity of both of these factors. 86 percent of parents

said that their work was impacted because at least someone in the household lost their job (Gupta

et al., 2020). Within the first number of weeks of the pandemic, families started to struggle with
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household items. Migrants, in most cases across the country, lost their jobs and aid, which left

them vulnerable to challenges such as homelessness. The authors propose that intervention from

social institutions in rural areas.

Due to the fact that their children are living at home, families are required to spend more

money on food, utilities, educational and recreational resources, and an Internet connection. The

increased difficulty in obtaining fundamental essentials like food, help, and educational

resources has had a detrimental effect on many families' physical and emotional health (Solheim

et al., 2022). The fact that children are in school does guarantee at least a meal through the

various social programs available. Solheim et al., denote how the pandemic impacted the

economic realities of immigrant families. Immigrants faced insurmountable obstacles in gaining

access to the support systems and safety nets that would have helped them weather the storm.

Providers also noted the families' strength and perseverance, noting that they supported one

other, their neighborhoods, and local organizations.

Credit and Indebtedness

According to Goodstein et al., there are stark disparities in the usage of formal and

informal credit between families of different races and ethnicities in the United States, which is

startling. The authors show that apparent differences across households may account for many

raw differences in loan use (Goodstein et al., 2021). Taking into account the area's demographics

helps bring the gaps closer together. However, the gaps between different races and ethnicities

are still rather wide. These variances are not due to hidden differences in family history, financial

literacy, subjective views, or credit ratings across families. Supply-side variables, such as racial

and ethnic inequalities in family exposure to marketing, are more likely to be responsible for
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these discrepancies. In the wake of the pandemic, the way households accessed loans impacted

their resilience. Therefore, the presence of such credit disparities is a topic of concern.

Mazelis & Kuperberg examine the relationship between college students' grade point

averages, the amount of debt they carry on their credit cards, and the stress that this debt causes

them. Given the increased dependence on the use of a variety of credit card types, this

relationship is becoming more important. In recent years, educational institutions have seen a

significant rise in the number of students who pay for their education using credit cards (Mazelis

& Kuperberg, 2022). This trend is expected to continue. Some have voiced concern about the

rising popularity of credit card usage among college students, claiming that this raises the risk

that students may rack up large amounts of debt and fail to properly manage their credit after

leaving school. Some people have claimed that this does not make it more likely that these

people would rack up a considerable amount of debt (Mazelis & Kuperberg, 2022). Others have

argued that an increase in the number of credit cards used by college students does not enhance

the likelihood that these people would amass a significant amount of debt. The truth of the matter

is that debts have made it difficult for students to transition to adulthood. The impact of the

pandemic on this population and the need to develop better recommendations on the same is

crucial.

Saving and Investing

Knowledge of money, credit, and debt management all come together to form financial

literacy, which is essential for making the daily decisions that affect our financial well-being.

According to Babiarz & Robb, the more a family is knowledgeable about finance, the better

prepared they will be for unforeseeable circumstances such as the pandemic (Babiarz & Robb,

2013). Debt reduction, budgeting, and familiarity with a range of financial products all contribute
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to financial literacy. Overall, knowing how to manage money significantly affects a family's

ability to pay bills, save for a down payment on a house, put money away for college, and secure

a comfortable retirement. People in both established and developing economies might suffer

from a lack of financial literacy. The pandemic illustrates a need for families to receive financial

literacy education.

When analyzing financial knowledge, interest, compounding, inflation, diversification,

and bond prices are among the topics in the exam taken by consumers. Van Rooij et al. indicate

that test scores were connected with important measures of financial competence (van Rooij et

al., 2011). Many families in the US have basic knowledge of literacy, indicating widespread

financial illiteracy and a need to improve these levels (van Rooij et al., 2011). Some shifts in

purchasing patterns and the availability of financial services have made it more challenging for

Americans to keep their money in order. Daily transactions were often conducted with cash

alone in the past. People rely more and more on credit cards as a payment method nowadays.

The convenience of online purchasing has made it all too simple to overextend one's credit while

making purchases.

Purchasing a Home

According to Burns et al., a well-balanced, nutritious diet seems to be becoming more

expensive, while high-calorie, low-nutrient meals are becoming more affordable. So that those

with lower incomes can afford to buy nutritious food, it has been suggested that policies be put in

place to increase the availability of good employment, higher pay, and more comprehensive

social services (Burns et al., 2013). Social policies, social marketing campaigns, and public

health education should be implemented to encourage those with fewer socio-economic

resources to adopt a healthy diet. Considering the frequently socially imposed desires for luxury
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or the need for comfort from social marginalization, both of which drive food purchases for these

customers. Nutritionists may not approve of many energy-dense meals, yet these foods play an

important part in the cultural and social life of economically disadvantaged people.

Levy et al. conducted to understand better the factors that influence a family's decision to

change or maintain their current housing situation. They shed light on the structural aspects of

family decision-making, which reveals very little about the emotional struggles and emotions at

play during the purchase activities. Social collectivities matter in the decision-making process, as

illustrated by the fact that extended family members and friends may and do weigh in on home

decisions (Levy et al., 2008). Unexpected outcomes may arise when persons from outside the

immediate family intervene in what had been a methodical and rational search procedure.

Conclusion

During the COVID-19 epidemic, the level of life for low-income households dropped

dramatically. Those already disadvantaged were almost three times more likely to say their

situation worsened during the COVID-19 lockdown. Rising costs of living and stable or falling

wages have weakened the financial foundation of many low-income families in recent years.

Many families were already on the brink of financial ruin before the crisis hit because of recent

changes to the social security system that have made it more difficult to acquire aid. Studies

highlighted in this paper have shown that many low-income households use monetary resources

such as credit cards, overdrafts, and informal loans from friends and family to get by. As one's

financial situation deteriorates, their mental health tends to suffer as a result.

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References

Babiarz, P., & Robb, C. A. (2013). Financial Literacy and Emergency Saving. Journal of Family

and Economic Issues, 35(1), 40–50. https://doi.org/10.1007/s10834-013-9369-9

Burns, C., Cook, K., & Mavoa, H. (2013). Role of expendable income and price in food choice

by low income families. Appetite, 71, 209–217.

https://doi.org/10.1016/j.appet.2013.08.018

Goodstein, R. M., Lloro, A., Rhine, S. L. W., & Weinstein, J. M. (2021). What accounts for

racial and ethnic differences in credit use? Journal of Consumer Affairs, 55(2), 389–416.

https://doi.org/10.1111/joca.12343

Gupta, A., Zhu, H., Doan, M. K., Michuda, A., & Majumder, B. (2020). Economic Impacts of

the COVID−19 Lockdown in a Remittance‐Dependent Region. American Journal of

Agricultural Economics, 103(2), 466–485. https://doi.org/10.1111/ajae.12178

Levy, D., Murphy, L., & Lee, C. K. C. (2008). Influences and Emotions: Exploring Family

Decision-making Processes when Buying a House. Housing Studies, 23(2), 271–289.

https://doi.org/10.1080/02673030801893164

Mazelis, J. M., & Kuperberg, A. (2022). Student Loan Debt, Family Support, and Reciprocity in

the Transition to Adulthood. Emerging Adulthood, 216769682210800.

https://doi.org/10.1177/21676968221080007

Solheim, C. A., Ballard, J., Fatiha, N., Dini, Z., Buchanan, G., & Song, S. (2022). Immigrant

Family Financial and Relationship Stress From the COVID-19 Pandemic. Journal of

Family and Economic Issues. https://doi.org/10.1007/s10834-022-09819-2

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van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market

participation. Journal of Financial Economics, 101(2), 449–472.

https://doi.org/10.1016/j.jfineco.2011.03.006