We are currently living in uncertain times. While health and protecting loved ones are our main concerns during the coronavirus pandemic, we also need to think about and protect our current and future finances. Whilst we all have different circumstances, overall the economy is shrinking, so the saying that we apply in general to Covid-19 – “Hope for the best, prepare for the worst.” also applies financially. Here are five things to consider when planning your family finances during the coronavirus pandemic:
Consider Your Current Circumstances
The first thing you need to do at this time is to assess your current situation. Is your current job secure? Is your business doing well? Have you been furloughed? Are you likely to be made redundant? Will your business struggle to pull through during these times? Are you struggling to work without childcare? Once you’ve assessed your situation as accurately as you can discuss it with your family and begin to make plans.
Think about what is important to you and your family. What does your future look like ideally? What things are you happy to compromise on?
2. Find Out if You’re Entitled To Help
During these unprecedented times, the Government has announced ways they will be helping people. This advice varies depending on which country you reside in within the UK.
Advice for businesses and employees in Scotland.
Citizen’s Advice has a lot of advice about Coronavirus and what it means for you on their website too.
3. Use a Family Budget Planner
Once you’ve assessed your overall financial situation and found out what help is out there for you it’s a good idea to use a Personal Budget Planner to really get organised with your current finances. Of course, you can design your own Budget Planner on Microsoft Excel or Google Sheets. However, there are certain advantages to using Pigly’s free calculator which enables people to estimate their biweekly, monthly or annual income & convert that to budgetary guidelines recommended by Dave Ramsey to see how their spending habits compare against others
4. Cut Down on Outgoings
Some people have said that they’ve found it easier to cut down on outgoings during this time. They are saving money while leisure activities such as eating out, trips to the theatre and the cinema have been on hold. For others, their outgoings are sneaking up unless they take control. This is especially a problem for families as the price of food shops and household bills increase while there are suddenly more people at home all the time. I’m not going to suggest a “no spend” rule as there are things we need but definitely be savvy before you spend- lookout for savings before you buy. The price of food is going up but you can meal plan to reduce your food waste. Follow Jack Monroe’s Cooking on a BootStrap for budget recipe ideas.
5. Save Money
I know when times are hard it’s more difficult to save, but if you can manage to put money away each month, start now. Financial advisors recommend that we should all have at least 3 – 6 months of living expenses saved as an emergency fund. Now, I realise that will take a while to save that amount but the sooner you start saving and the more you can put away, the better. If you receive any refunds from trips or tickets cancelled due to coronavirus, consider classing them as money already spent and put into savings rather than spending. Unfortunately with interest rates down again, you’re not likely to make much interest back but over time your money will accumulate, and be there to help you if needed in the future.
There are a lot of ways you can start saving more money as a family. If, for example, your mortgage is due for renewal, then it might be time to hunt around for a better deal. Using a quick mortgage calculator can help you work out how much you could save with a better mortgage deal. Use any money you save to put straight into your savings – you won’t miss it as you were paying it anyway for your mortgage!
What tips do you have for planning family finances during this time?