People across the globe have undergone drastic lifestyle changes due to the pandemic. Aside from health issues, we also have to deal with the socio-economic impact of Covid 19. I am just one of the millions of people whose income and livelihood has been affected by this pandemic. Mainly because of business closures which resulted in loss of employment and income opportunities. Thus, people had to scramble for alternative income sources and recalibrate the family budget to adapt to the pandemic situation.
Re-assessing the Family Income Situation
Family budget was not a concern before the pandemic because our income was more than enough to cover our basic needs and a few indulgences. Financial planning simply involved saving for annual travels or big-ticket purchases but not really saving up for the future. Our perspective changed during the lockdown when my husband’s take home pay was reduced due to shortened work periods. Along with that came an increase in family expenses due to disinfection measures done at home and protective gear for the family. We suddenly found ourselves with less income and more expenses. A dire situation compared to our pre-pandemic financial standing. At this point we are even worried about getting sick because our funds won’t be able to cover medical expenses.
Coping with Loss of Income
Although we didn’t totally lose our income, the reduced take home pay still had a great impact on our family budget. I found myself calculating everything from credit card bills, auto expenses, groceries, and utility bills down to the last centavo to make ends meet. Luckily we have skills fit for home-based projects and we are able to find freelance opportunities that can supplement our income. On top of these income adjustments we also have a number 1 rule for the budget. That is to always spend less than what we earn.
Savings Goal and Financial Planning
Aside from planned and calculated expenses, our recalibrated family budget now includes a savings goal. This means that we will be allotting funds for the future and for medical emergencies. Not just any amount but a pre-determined amount for savings. In order to accomplish this, everyone in the family needs to help in budgeting family funds or minimizing expenses. Involving the kids in the budget planning can make them understand the need to save and contribute to the savings effort.
Stretching the Family Budget
This is one of the smartest and most practical way of saving funds for the future. You can stretch the budget by keeping an eye out for discounts, freebies, and other deals that give you the best value for money.
The Covid 19 situation has forced us to recalibrate the family budget and make sure that we can still provide for the family despite the economic challenges we may yet face. But just like a machine, our family budgets need to be re-calibrated with any change in income situation or family needs.