The past several months have been tough for many families. With COVID-19 forcing the closures of businesses and schools, so many aspects of our lives have changed. While many of us have reduced spending by being forced to cut extracurricular activities, travel plans, and shopping for anything more than the essentials--many of us have seen drastically reduced income during this time too! Today, I wanted to share a few quick tips to help you better manage your family's finances as you navigate this difficult time!
Revisit the Family Budget. While many of you may have a very detailed monthly or weekly budget that allows you to control your spending--if you do not have a written budget, it is vital to put one in place. Write down all of your fixed monthly expenses, like mortgage or rent payments, utility bills, car payments, grocery expenses, etc.--and, then, see where the "extras" fit into your budget. If you need help putting all of your monthly expenditures into balance with your income, use a budget calculator like the user-friendly family budget planning calculator from calculator.me.
Take a Very Serious Look at the "Extras." Do you need four individual music subscriptions? Is there a family plan that could save money, or could the subscriptions be eliminated altogether? Many of us sign up for subscription plans and forget to cancel--or forget to use them. Tough economic times are perfect times to take an in-depth look at everything that you are paying for and cut out any product or service that you aren't using or doesn't really fit the budget that you have created.
Ask for Help Before you Get into Trouble. Some creditors--like many student loan services--immediately put loan holder accounts into forbearance states that halted payments and canceled interest accrual. While many did--yours may not have. If you are struggling with a mortgage, rent, credit card payments, or even utility bills--call the provider and see if there are any options available to help you temporarily stop or reduce the debts owed each month. Your mortgage company may not publicize the opportunity--but may offer options if you ask! While there are many programs available to help you, it is in your best interest to ask for help before you fall behind on bills or obligations.
Take a Look at Your Emergency Money Plans. While you may not be able to add much to a savings account if you are already struggling to make ends meet--it is still an excellent time to set up a workable plan when your finances recover a bit. Do you have a retirement plan? Do you have enough life insurance for your family in the event of your death? Sometimes downturns are a great time to really evaluate your wants vs. needs! You may be surprised to realize that there is money available in your budget for that college fund or a new insurance policy with just a few budget cuts and changes. I think we are all realizing that many of the things that we valued earlier this year are not as important as they once were!
Significant Expenses Happen When you Least Expect. One of our cars is currently on its last leg. We had to replace a hot water heater at the very beginning of the pandemic. Life happens--and it doesn't always happen when you have a fat bank account and a thriving business! Those significant expenses may need to be financed rather than paid for outright. Sometimes, you may find yourself putting a large purchase on a credit card in a pinch, so take some time to look at a credit card calculator to see how to manage and pay off such a considerable expense over time.
My family life has changed a lot over the past few months. We have changed the way we budget our money and our time. We have discovered ways to do more for ourselves without paying outside services, and we have used the tips, calculators, and advice that I just shared to re-frame our finances to make it through until business picks up again. Even if your finances have seen little impact from recent events--you may find that you could still benefit from some budgeting and emergency money planning!
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