How to Manage Your Family Finances During a Crisis
A financial or health crisis can take a major hit on your family’s finances. During these times, you may be wondering how the global pandemic will impact your household budget and spending.
In light of the current crisis, many parents are seeking ways they can cut down on spending and protect their money. Luckily, you can still be conservative with your funds while continuing with life as usual. To help, here are a few ways you can manage your finances through trying times:
Grocery Shop Strategically
As most restaurants are closed or only offering takeout, you’re probably cooking more meals at home. Eating at home is already a great way to cut down on food costs, but by watching your spending at the grocery store, you could save even more.
It’s common for families to shell out a few extra bucks for products that seem familiar and well-known. However, buying generic rather than name brands could slash your food budget by thousands each year. In addition, taking inventory of your pantry and planning meals ahead of time can also help you avoid impulse buys at the store.
Use Your Emergency Fund Thoughtfully
Most families have at least some money saved up for unplanned expenses. If your family has been financially impacted by the crisis, you may need to tap into these funds to keep afloat. After all, that’s what an emergency fund is for. However, if you tap into this account, you should still be mindful of your spending, so you can stretch your fund until you’re back on your feet.
If you don’t have an emergency fund, now would be a good time to start one. You can jumpstart your savings with the money you normally would’ve spent on family activities outside of the house (i.e. dining out, going to the movies, or visiting the zoo) or with your stimulus check.
Leverage Market Conditions
While there’s a lot of uncertainty during crises, some of its effects could actually be advantageous. During economic downturns, the government lowers interest rates, making borrowing terms more favorable. These market conditions present a good opportunity to leverage your home equity and cushion your finances in the short-term or consolidate debt.
By using existing equity to restructure your mortgage or to secure a loan, you may be able to lock in lower rates and lower your overall monthly expenses. But, note that you should always discuss your options with a financial expert to ensure you make the best choice for your needs.
Bundle Your Services
Individually, services like Netflix, Disney Plus, Spotify, and Amazon Prime can cost you upward of $100 per month. However, you may rely on these to keep you and your family entertained, especially when you’re stuck at home during a crisis. Consider researching bundled subscriptions or tiered offerings. You may be able to switch to a lower, more cost-effective plan that better suits your lifestyle and budget.
Services like Spotify and Hulu have already teamed up to offer bundled subscriptions at a lower cost. So, if you already subscribe to some of these services, you could potentially save a few extra bucks by looking into similar bundling opportunities.
Take Advantage of Teachable Moments
A crisis doesn’t have to be a learning experience for just you. As you navigate through the times, look for opportunities to teach your kids about money. Doing so may help them better understand the context of the situation and expand their financial knowledge.
Even if you’re struggling financially, remember to keep your composure. Remain calm and instead open up to your children about any financial implications that may affect them. Especially during a time of crisis, discussing money matters is a great way to educate your children while getting through the times together.
As a parent, there are many things you can do to help ease the burden of an economic crisis. By being strategic with your spending, exhausting your resources, and taking advantage of teachable moments, you can navigate the times together.
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