Family Budgeting During and After Coronavirus
INSTAGRAM PINTEREST
INSTAGRAM PINTEREST

Family Budgeting During and After Coronavirus

June 30, 2020

Family Budgeting During and After Coronavirus

It goes without saying that budgeting isn’t always the most fun activity. I get it. It’s not fun figuring out how much you have to spend on necessities, and then even less fun realizing how much less you have to spend on your wants! We often associate having a budget with lacking the resources to live as we please, but this couldn’t be any further from the truth! Budgeting is essential for living the kind of life we want now and—more importantly—in the future.

Budgeting is even more imperative when you are supporting dependents. The Covid-19 crisis has negatively affected many families in ways that they never imagined. Whether you’re in that category, or you’ve been lucky enough to escape all the furloughing, layoffs, etc., it’s easy to see the relevance of budgeting in these times.

As society begins to reopen its doors towards some return to normalcy, it is more crucial than ever that we take a minute and re-evaluate our budgets!

Understand Your Family’s Financial Situation

Covid-19 has affected families in various ways and to different degrees. For the fortunate ones, no source of income has been affected so far—to those, I say congratulations! But having a job and avoiding a pay cut is no reason to slouch on your budgeting. You need to save more money than usual. Many industries are still struggling in the wake of the pandemic, and it is important to get ahead (just in case).

The reality for many other families, however, is that they’ve lost at least one source of income. I understand how that feels, and it can be jarring. The first thing you need to do to help manage your finances is take inventory of your situation:

 

 

Limiting Your Spending

Even if you’re doing relatively well, it pays to play safe. Limiting your spending is an important part of managing your budget. When people think of limiting spending, the first thing that often crosses their minds are needs or missing out on some of the other little comforts they have (like Netflix). While those are noble considerations, they are typically not necessary unless you’re in dire straits.

What is most important—especially if you’ve just lost income—is to avoid going into high-interest debt, e.g. credit card debt. Write down a list of all your subscription services (including the essential ones) and call your service providers to see what options are available. Some services allow you to defer payments, reduce usage, or even all-out cancel them without penalties.

It would help if you also cut down spending on non-essentials like maid services, nails, etc. I understand that a lot of people want to help service industries during this time, but making sure you have enough money to pay off your bills needs to be your first priority.

If necessary, you may also need to stop contributing to 529 college savings, or 401k/403b retirement savings account. Those can typically wait until things return to normal.

Prepare Your Emergency Options

Regardless of what your situation is, you should (always) prepare in advance for emergency situations. How much money do you have in your emergency savings account? How long can the money in your emergency savings cover your expenses? Are you comfortable with how much you have saved up? And if you’re not, what can you do to add to it? These are all questions you need to answer to be able to comfortably ride out emergency financial situations.

I believe a true emergency is when you lose the ability to afford something you need to maintain a comfortable (albeit, potentially reduced) quality of life. For instance, if I couldn’t afford to pay for my rent, mortgage, groceries, or utilities, I’d consider that an emergency. Keeping an emergency fund can help you soften hard landings like a pay cuts or periods of unemployment.

Other sources of emergency funding that you can consider are access to credit cards, a personal loan from family, HELOC, etc. The idea is not necessarily to begin to use these sources immediately, but to have them outlined just in case.

 

Be Honest with Yourself About Your Priorities

One of the mistakes we often make with budgets is that we make them so strict that we’re eventually forced to break them. Being honest with yourself about the luxuries you can commit to rationing is a tactic that will significantly improve your chances of success. Understandably, you have things you enjoy doing, and while they may not be essential, they may be critical to your mental or emotional well-being. If these activities are too expensive for your current financial means, try to see if you can find a more affordable substitute for them.

For example, if you like getting your nails done, buy a nail polish kit and join the DIY nail community. There are tons of fun tutorials on YouTube and social media.  I’m loving Olive and June lately. If you like eating out and are not a fan of cooking, try limiting eating out to once a week and use a slow cooker or pressure cooker at home for affordable, delicious meals.

Don’t forget your values

The most important guidance I can give you is to figure out what matters most to you, and spend your time, money, and energy in that category. For me, my favorite thing to splurge on is traveling. My work conferences and vacation spots that were planned for this year have been postponed until 2021, or even 2022. Since my family and I have decided not to get on a plane until 2021, we are splitting our savings between small home improvement projects and future travel plans, so that we’ll be financially ready for a vacation when it is safe to travel again. Take the time to figure out what you don’t miss and what you can afford to live without.

This period has taught me that I don’t need a ton of new clothes. I typically shop only a few times a year, beginning of the four seasons. I don’t miss my gym membership either, and I’ve switched to using YouTube or workout video sessions with home equipment.

I do miss traveling, but it’s not a huge void in my life. But getting my hair done—that’s something that I will not give up long-term or ever (ha!). I also miss walking on hiking trails; they are crowded nowadays so it’s something that I hope I can do again in the fall safely without the crowds. Whatever your values are, do you! Find YOUR joy!

Save Money

I’ve already mentioned this, but it’s so important that it deserves an entire section to itself. Americans love buying things. From the latest high-tech gadgets, to the $1 bin at Target, to frequenting our favorite restaurants, we love buying stuff. However, in the current climate, I urge you to slow down and prioritize your needs over your wants.

When it comes to gadgets, unless they’re broken or can no longer serve their primary use, it’s best to keep using them. Most new devices only offer marginal upgrades in the first place. Even if the deal being offered is a huge discount, an important thing to remember is this: money spent on a discounted purchase is still money spent!

For now, your order of spending should be: needs, savings, wants. Have a specified percentage of your earnings that you’re putting towards your emergency savings account. Once you’ve handled your essentials, save a percentage of the money, and spend the rest on treating yourself.

It’s essential to think about your future. If you received refunds for plane tickets, summer camps, and the like, save everything you can after paying off your needs. Whatever you save today could help you out six months from now, or down the line in another crisis.

Go Set Your Budget!

A budget is not a one-time affair but a continuous process. You will need to keep evaluating periodically. Considering the current state of the world, I suggest assessing your budget plan every month or two. The world is changing rapidly, make sure you stay ahead of it.

For those of you interested in earning some extra credit: stay tuned for my upcoming money challenge in September. This will be a five-day exercise to help you dive a little deeper into figuring out where you are financially and where you can afford to save money in the short term.

Get your Digital Learning Resource List FREEBIE!

This comprehensive list has dozens of website links and costs (if any) for many topics and all age groups. Such a big help whether you're homeschooling, distance (remote) learning, in school or something in between. Free updates!

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Leave a Reply

Your email address will not be published. Required fields are marked *


Warning: count(): Parameter must be an array or an object that implements Countable in /nfs/c12/h05/mnt/225384/domains/mompoweredlife.com/html/wp-content/plugins/popups/public/includes/class-spu-rules.php on line 672

This site uses cookies to enhance user experience and gather analytics data. For additional information, see our privacy policy. By clicking, “I Agree,” you agree to the use of cookies on Mompowered Life.

Whether you’re homeschooling, distance learning (aka remote), in school or something in between, finding good learning websites for the kids can be a chore. We have a lot of experience and done our research to share with you for free. You’ll love these amazing digital learning sites for all age groups. We’re in this together!

Get your freebie and we’ll send you free updates!

I want mine!