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Finance

How to Write a Monthly Family Budget during the Crisis Times

05/25/2020

Every family should have some kind of budget plan. We’re not saying you should count every cent that you spend, but you should be wise about the way you spend your money. This is why a family monthly budget is a great way to control your money, create a savings fund, and make sure you know where you spend your money. But, what happens with this plan during crisis times?

A crisis demands a different budget plan to be created. With a crisis such as the one caused by the COVID-19 pandemic, your family’s budget may suffer and you need to act on it. This article will help you write a monthly family budget plan during a crisis.

Let’s take it one step at a time.

1. The Effect of the Crisis

Let’s start from the basics and focus on the core of the problem. There’s a crisis happening and you need to analyze its effects on your family.

So, before you make any budget-related decisions, you need to know your facts:

  • the cause of the crisis
  • its effect on your family
  • its effect on your investments
  • the estimated length of the crisis

In addition to this, it’s very important that you stay informed on the latest events related to the crisis.

For example, if the COVID-19 pandemic caused all the restaurants to be closed and you work as a restaurant waiter. In that case, you should listen to the predictions about when are things expected to be back to normal.

2. Before & After

The next step you want to make is creating a detailed report of your family’s monthly budget before the crisis, and compare it to the newly developed situation.

The most important things you need to analyze are:

  • your monthly income
    Create a report on the monthly income of all working members of the family before and after the crisis. If the crisis caused anyone to lose their job or lose some percent of their profit, note it down.
  • your monthly expenses
    If we analyze the average household before the COVID-19 pandemic, we can see that they spent money on traveling, entertainment, eating outside, going out, etc. The pandemic caused them to stay home, cancel their travel plans, and stay put.

    Your monthly expenses in some sectors might have decreased. Note down how the crisis affected your monthly expenses.

Now that you’ve analyzed the newly developed situation, you know how much has changed in your family budget. Based on that information, you’ll write your plan.

3. List Your Priorities

Now’s the time to actually start writing your monthly family budget. That means you’ll take your monthly income and decide how and when to spend it in order to have enough to cover all your expenses.

The most important is to list your priorities, that is the things you can’t live without or you have to pay for:

  • groceries
  • the minimum amount for your debt payment
  • home supplies
  • personal hygiene products
  • bills

Once you create a list of the things you simply need to pay, you’ll see where you stand with your budget. If you don’t feel you’ll fit your estimated budget, you need to make some cuts.

4. Save Money

There are several ways for you to save money or find help during the crisis period, so don’t despair. Here’s what you can do to make sure you have enough money to get through the crisis period:

  • make cuts
    All family members will have to sacrifice some of the things they like but can live without, just for a short period. It could be as simple as a magazine subscription, but when everyone unites it will add up to a pretty solid amount of money.
  • get help
    If your business budget is suffering due to the crisis, like it’s the case with many businesses and COVID-19, you can apply for help. You might receive some money from the government and deal with the crisis easier.
  • ask for a break

If you have a student loan, credit card debt, mortgage debt, or any other type of debt you have to pay, you could ask for a break and a pause until the crisis is over. This will help you stay on your feet and make a successful recovery.

During the COVID-19 pandemic, governments all over the world are issuing suspensions of debt interests, authorizing breaks in paying off debts and helping people get out of the crisis with minimum damage.

Final Thoughts

A crisis may cause you to rethink the way you spend your money but it doesn’t have to cause you to lose your mind. Just make sure you’ve done everything that’s in your power to assess the situation and make all the right calls regarding your family budget.

Use the advice we’ve provided above to write a sustainable, solid monthly family budget plan during the crisis times.

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