The savings for financial stability are intended to help us pay the current expenses of the house for 6 to 12 months for situations in which we will not be able to work and earn a living – for example during dismissal or a long illness. The current Covid-19 crisis has sent the world into disaster mode. People are losing their jobs and the money people have lost is colossal. Therefore, it’s important to look at how to keep afloat during these uncertain times.
Look At Your Savings
The savings replace our salary for a period of half a year to a year. A long enough period that allows us to get back on our feet, recover or find a new job that suits us. The amount of savings is the amount of the highest monthly income in a home multiplied by the number of months (6 or 12).
Insurance Is Key
Insurance is one of the important tools we have to protect the family from an economic collapse. An economic collapse occurs when the cost of the damage caused is so high that there is no possibility for the average person to pay it.
What insurances protect us from an economic collapse?
- Health insurance – life-saving insurance that includes transplants, over-the-counter medications, and surgeries.
- Nursing insurance (private) – insurance that helps finance the care for a nursing patient.
- Life insurance – insurance that provides a sum of money at the time of the insured’s death and allows for securing the financial future of the family.
- Disability insurance – for situations in which the insured loses his ability to earn a living from an occupation appropriate to their experience, education, and training. Please note that there are critical differences between private disability insurance and insurance built through the pension fund (disability insurance).
We must protect ourselves from economic emergencies. After all, if such a situation happens to us, we will have to get the money, and then we will have a much harder time.
Both because we will have to get a lot of money at once, and also because we will be at a very low energy level. We will need to contact all of our support circles and ask them to help us. Let’s not get to that position, because nobody deserves that. So what can you do to keep the family afloat?
Having to manage your budget on your own is sometimes complicated. So when you become a real family, with children, the complications multiply. So as not to let your budget drift, and to keep control of the main financial decisions, here are our tips to help you stay in control. You will see that managing a family’s budget is not that complicated as it seems.
Set A Budget And Follow It
First essential action to be able to manage the family budget well, to define one! It may seem simple, yet it is the first essential and often forgotten step for good household financial management. A budget is defined by listing in two columns, on one side the cash receipts, and on the other the expenses.
Go through your bank accounts for the past few months to list all of your recurring and regular expenses. Also note the income you have available, whether it is wages, pensions, or aid. The object of the game is to find the right balance. Define key expense items (food, insurance, housing) and stick to the numbers.
Anticipate Financial Changes So As Not To Have Any Surprises
Defining a budget is one thing, but you also have to know how to change it over time. For that, you must look at the anticipation. Your expenses as your income will change over time. In particular, anticipate replacement expenses (household appliances, car) or even expenses linked to a change in the situation (arrival of a child, moving).
Do not wait for change to see the financial repercussions, but try to anticipate them, so as not to find yourself in the red. If you receive aid, remember that these are not paid forever and therefore it’s important to see it as a means to an end. This is unfortunately what is occurring now with the crisis; although hopefully there is light at the end of the tunnel for many workers.
Finally, anticipate any profound change in your personal or professional situation. If your business is going badly, if you have health concerns or if the family balance is faltering, adopt a strategy of prudence with your budget.
Use the payment methods you really need. Look also at help available. What vouchers and online codes can you use? Many places offer discounts, so take a look at https://halfcooked.co.uk/nhs-discounts-in-the-uk/ for further information.
Managing Expenses In The Budget Every Month
To manage your budget well, the important thing is to find the right balance between cash flow and expenses. Exactly, when it comes to expenses, are you sure you have the right means of payment suited to your profile?
If you can spend it easily, avoid deferred debit cards, and prefer payment cards with systematic authorization, which allow you to avoid being overdrawn. Do you pay a lot of expenses by check? Note that for recurring expenses, especially for rent or insurance, bank withdrawals are often more suitable.
They limit the time between issuing and making a payment. Whenever possible, think about monthly payments for major expenses (taxes, car insurance) to simplify the management of your budget. Direct debits are often cheaper in the long run also. If you can’t pay any bills, however, you must specify this to the companies that you are struggling to pay.
Finally, use your credit to carry out certain projects but do not overspend on your credit cards. Also, do not take out a loan to compensate for a drifting financial situation, at the risk of permanently falling into over-indebtedness.
Use Your Current Account For Your… Everyday Transactions
Your checking account should be your bank account used to pay for so-called “current” expenses. It is not a tool whose amount can be varied without any consequences.
If you do not keep your deposit account in a credit balance, then you will have to pay premiums, possible fees, and face payment rejections! Conversely, if you have a comfortable advance, don’t use your checking account to let that money slip either.
Your account must have the necessary funds for your expenses, otherwise, you will find yourself in debt and a worse situation.
Place Your Savings In A Dedicated Account
Opening a savings product is the last tip, arguably the most important for your future. It is important to build up cash flow to be able to finance projects, but also to react in case of unforeseen circumstances.
Don’t think that your modest income is preventing you from saving. Even small savings with the sums that remain in the account at the end of the month, can create a small nest egg that will grow over time.
Establish A Household Budget
You will want to have a clear overview of your finances, which is why you should create a budget that takes into account all of the household income. Put a certain percentage in essential costs like food and mortgage payments, as well as clothes for the growing baby, savings, and chipping away from debt. This budget will help your family stay in financial control and make sure you can afford what you and the baby need.
Find Work Online If You Can’t Find Any Work Elsewhere
The first few days of parenting are sure to be stressful, but once things start to settle in then you might want to consider working online if you or your partner is at home. There are plenty of ways to make money online these days, with the option of taking as much or as little as you want.
Working online is a great way to boost your finances and might even give you enough to support the household if you decide to stay at home. Alternatively, your partner could stay at home full time and benefit from the savings together while you go to a job that is based out of the residence. Online jobs are very coveted today after Covid-19.
Financial Advice For New Parents
Covid has made life difficult for new parents. The uncertainty of financial stability is not easy, even without a pandemic! You are not alone if you worry about money (and a lot of other things) as a new parent.
To help you feel more in control, try some of the tips above to help improve your family’s financial situation. With less pressure from a monetary perspective, you are in a better frame of mind to live in the moment and enjoy those special first moments with your newborn baby.
Building a happy and healthy lifestyle for your child begins today. It’s time to take control of your life and finances and stay afloat for good.