Upsides of the Downturn

By Susan Gregory-Thomas

The boom times of the '90s were not just an economic story; they changed the lives of families too. Dads jetted around the country, moms could afford to give up their jobs, and families everywhere dreamed about new diplomas and big promotions. But family life was transformed again when the current slowdown began in March 2001. Two million Americans lost their jobs, while others saw their paychecks shrink. How is the changed economy affecting their emotional welfare? "Money is the physical manifestation of who you are. It defines you," says certified financial planner and best-selling personal-finance author Suze Orman. "When you lose it, you lose part of yourself." That may be true, but an economic setback can also give families an opportunity to figure out what really matters in their lives. And some are finding that there can be upsides to the downturn.

PUTTING FAMILY FIRST

David Wu's career thrived in the '90s. In just three years, he went from being a mid-level performance analyst in Washington to being a general manager for Allied Signal (now Honeywell) in Shanghai. The management job came with a mid-six-figure income, but it also required David, 45, to travel almost constantly, averaging 80 hours a month on planes. In 1995 David, his wife Elly, now 42, and their three children, Letitia, 14, Lawrence, 12, and Lennifer, 10, moved to China, hoping David would be able to spend more time with the family. But he wasn't, and the effects began to show. Letitia and Lennifer stopped doing homework, and Lawrence started getting into fights. "I was concerned about the kids' issues, and David wanted to deal more with them, but he was too busy," says Elly. After four years the Wus decided to return to Virginia. David quickly found a comparable job at Teligent, and when that company went bankrupt just 10 months later, he signed on with Tyco. The hitch: he would have to resume a hectic flying schedule. So, when all three children were selected to join the prestigious American Youth Orchestra as violinists, David missed their concerts. He was also away for their basketball, soccer and volleyball games. And when he was home, he was so jet-lagged that he often fell asleep while watching movies with the family. Elly was worried about what kind of message he was sending to the kids. "I told him, 'If someday you feel like the kids only need you financially, don't get upset with them, because that's what you taught them.'"

Then last spring news about the alleged mishandling of company funds by Tyco's top management began to leak out. David wanted to leave the company but was afraid he would not find work in a bad economy. Elly encouraged him to make the break, but David waited until the school year was over to ask the kids how they would feel about his quitting. "My children were mature enough to tell me, 'Daddy, you told us we have to pursue what we want to do; you should too,'" he says with emotion.

Since David had been with Tyco only a year, he didn't have much retirement savings in the company's deflated stock, and he had put aside enough to live on for a year if the family budgeted carefully. The Wus have cut out vacations, and instead of playing games on the latest souped-up PC, David and the kids are working on a less pricey 3,000-piece jigsaw puzzle. But the transition hasn't been easy. Elly admits that she had got so used to his not being around that she sometimes forgets to involve David in family decisions. The kids, while happy he's home, sometimes don't know how to treat him either. "He's been trying to make it all up in a short period of time," says Elly. "We all need time to warm up again." David is doing some consulting, but he has started thinking about how to look for a job in an economy in which so many executives are competing for work. "Right now I am almost guaranteed that my compensation will be low," he says. But even if there's an opportunity to earn more, he has decided that he will not travel until the kids are of college age. "My family is growing up on me," he says. "They have to come first."

MAKING A FRESH START

Having your own business is the dream of millions of Americans, and Michael Ross realized his when he and a partner launched a film-production company in New York City in 1999. Michael, now 39, was not raking in a six-figure salary like his ecounterparts in nearby Silicon Alley, but his income was comfortable enough so that his wife Cindy Cordes, 31, could stay home with their daughter Ella, 4, and the couple could afford to send Ella to a $7,000-a-year private preschool, have regular dates at nice restaurants and take advantage of the booming market by investing in mutual funds. But by the time their son Asher was born in February 2001, the economy was running out of steam, most of Michael's clients were running away, and the family's investments were tanking.

Cash flow became so unpredictable that Cindy sometimes had to buy groceries with credit cards. When she couldn't pay the bills, she turned to her mother, a double-edged resource. "I was grateful, but I also hated that she knew how much trouble we were in," Cindy says. "It somehow gave her permission to criticize us, and that was hard on our egos." The couple, who had always been able to talk calmly, started arguing about what to do next: Should he get a "real" job? Should she go back to work? Then came the World Trade Center attacks, which Michael and Cindy witnessed from their living-room window in Brooklyn Heights. Michael and his partner had taken out personal bank loans to keep their business afloat, but their few potential clients disappeared. Michael and Cindy began to fantasize about getting away from it all. Last May, Cindy called her high school alma mater in Hawaii to see whether there were any teaching openings for Michael, who at one point had taught an undergraduate film course at Boston College. He got a job teaching English at summer school, so the couple sublet their New York apartment at a profit and moved into a condo in Honolulu that had belonged to Cindy's grandmother, who had recently died.

Hawaii's beach culture was soul soothing; so, to their delight, was Michael's new job. "Michael is an intellectual, and he just bloomed in the school environment," Cindy says. "I saw him happy at work for the first time in years." Still, they knew a teacher's salary would be untenable in pricey Honolulu. Then through friends Michael landed a job in Emeryville, Calif., combining his background in film production and teaching, at LeapFrog, an educational-toy company, at a salary comparable to his old New York income. "I think we're more confident in our abilities to cope with change," says Michael. "We've ended up in a much better situation, but we had to be willing to break completely from what we knew."

BUILDING NEW SKILLS

Overtime was the secret to Elizabeth and Cameron Eyhorn's financial stability. For a while, Cameron, 25, was earning enough of it as a machine operator for International Food Solutions to let Elizabeth, 23, quit her job as a cashier at Home Depot and stay home with the couple's three children, Caleb, 7, Hannah, 2, and Chloe, 8 months. But as the economy withered, so did the extra hours, and Cameron's $12-an-hour pay is no longer enough to support them in their small town of Udall, Kans., outside Wichita. To improve his chances of getting a more lucrative job in his company's machine-maintenance department, Cameron is earning a technical certificate at a vocational institute. The 14-month course costs $14,000; a combination of grants and loans is paying the tuition. "My first thought was, 'Oh, no, not more debt!' but now I feel like it's going to improve life a lot," says Elizabeth. "Because of the recession, we realize that he needs to have more options to make more money, so we don't have to worry so much about the future."

In the meantime, the Eyhorns are learning how to budget both money and time. Elizabeth has reduced the monthly grocery bill to $100 by using cheaper ingredients and food stamps. Cameron works from 6 a.m. to 2 p.m., gets home by 3, then heads for school at 4:45; he's home by 11. "On the weekends, when I don't have to go to school, I try to give Elizabeth a break and get up with the kids," he says. "Oh, no," she counters. "Cameron has a much harder time than me." They feel lucky that Elizabeth's parents are willing to baby-sit and help with diapers, groceries and emergency expenses, like Cameron's eyeglasses, which broke recently. Still, help can sting slightly. "I don't like borrowing money from anyone because I feel like I should be able to support my family on my own," says Cameron. "But I'm very grateful that I have such an understanding family." Says Elizabeth: "I know it sounds cliched, but it has helped us appreciate the smaller things in life."