Crunch Time
Wow. My last post was September 24, 2019. So, where on earth have I been? Well, it's been quite a time for the Pennies family. On September 25, 2019, we learned the joyous news that The JuJuBe will be a big sister! I have thought about this blog very often. I have so many topics in mind to discuss, but growing a human is physically exhausting - especially while raising a toddler. Many, many of you out there can relate! But for now, I am back and I hope to be more consistent with my posting.
Right now in the world there's a lot going on. (That is a huge understatement!) I'm not about to launch into my opinion on COVID-19. I'm not a doctor, politician or statistician. I am simply a wife, mom, teacher and budget enthusiast. Times are difficult. Many are unable to work, are laid off, stuck at home, etc. I am going to offer some actionable steps to those who may need it.
Crisis Mode
We know many people who have lost their jobs or taken huge pay cuts - and these are not just people in the hospitality or food service industries! These are people with otherwise completely stable careers. If you or your spouse are in this boat, here's the best plan I can offer:
1. Find an income stream
A historic number of people have applied for unemployment to help relieve financial strain. In the mean time, pursue other sources of income if you are able. I know that many, many parents are having to provide childcare and homeschooling until school resumes. That's a huge chunk of time to have to work around. Find something (anything!) that can work for you and your family.
For the future: When income becomes stable again, you will be able to restart working your baby steps. Quick review: Baby steps 1 through 3 are to be done in order and individually. Baby steps 4, 5 and 6 are to be done at the same time. Baby Step 1: Have a mini emergency fund of $1,000.00 saved. Baby Step 2: List your non-mortgage debts smallest to largest. Throw any and all extra income towards your smallest debt until it is gone and then move up the list. Baby Step 3: Have an emergency fund of 3-6 months worth of expenses saved. Baby Step 4: Save 15% of your income into a retirement account. Baby Step 5: Save money for future school expenses for your kids (College Savings). Baby Step 6: Pay any extra to your mortgage. Baby Step 7: Live and give like no one else.
Also, please note that there is no shame in pausing your baby steps. We have been in "Stork Mode" since September. We are just aggressively saving money in case we have to cover any unexpected expenses. Pause the steps if you need to. There will hopefully come a time when you can hit the "Start" button again.
2. Keep up the four walls
This piece of advice comes from Dave Ramsey. What are your four walls? Food, Utilities, Shelter and Transportation. If you made a budget and you simply don't have enough to cover some of your extras, those extras need to wait. Dave will tell you first and foremost that you need to feed your family, keep on the lights and water, have a roof over your head and have a way to get to and from a job. Then, prioritize the rest of the line items in your budget and pay them in order of importance. Feed your family before paying on the credit card. Stop putting money into retirement if you can't pay your mortgage. Also, if you can pay your four walls and cover all your bills, then PAY YOUR BILLS! This is just for those of you out there that can't cover every payment.
For the future: COVID-19 appears to be a major wake up call for a lot of people who are still playing around with credit cards and car loans - not to mention student loans. When this crisis comes to an end and income is stable once again, it's time to move into a life where you don't give a huge portion of your paycheck away to payments each month. It's time to kiss that high stress lifestyle goodbye. You work too hard to be a slave to your lenders.
3. Review your budget
If you aren't budgeting each month, do it. You cannot possibly keep track of your money each month if you do not have an idea of what you pay for your food, mortgage/rent, utilities, and transportation. This is a very important step. Please don't skip it!
For the future: Keep consistently making a budget each and every month. Track your spending. If you ever find you or your family in a time of major crisis again, you can review the budget much more easily than if you have to start from scratch.
4. Trim the budget
Look for places to make deep cuts in your budget. Cut the restaurant budget. Meal plan ahead of time and buy groceries for specific recipes. It may be time to cancel some monthly entertainment subscriptions. Call your cable company to discuss what packages or deals they can offer to reduce your bill. Do a check up on all your insurances right now (car, home owner's, renters). You may be overpaying by several dollars each month and right now, those dollars add up.
For the future: Again, if you keep up with an accurate budget each and every month, it will not be hard to know where you can quickly make cuts if another time of crisis strikes again. This crisis may not look like another global pandemic. Instead, it may look like the death of a family member, a chronic or long term illness, your company closing, etc. There are so many things that can happen to each of us in life that are completely unpredictable. Having a working budget means you can cut deeply and quickly when the time comes!
Looking ahead:
We've all heard it: We are living in a completely unprecedented time. Moving forward, what do you think you will change once income stabilizes for your family? Or, maybe your income is secure right now during this crisis but you're still playing the payment game? Now is the perfect time to make a game plan no matter where you are in the baby steps. Good luck and please feel free to reach out if you need any help. I have many, many resources I can share!
Thank you for stopping by Parenting on Pennies! We hope and pray that all of you are staying healthy and well during this time. See you soon!
Right now in the world there's a lot going on. (That is a huge understatement!) I'm not about to launch into my opinion on COVID-19. I'm not a doctor, politician or statistician. I am simply a wife, mom, teacher and budget enthusiast. Times are difficult. Many are unable to work, are laid off, stuck at home, etc. I am going to offer some actionable steps to those who may need it.
Crisis Mode
We know many people who have lost their jobs or taken huge pay cuts - and these are not just people in the hospitality or food service industries! These are people with otherwise completely stable careers. If you or your spouse are in this boat, here's the best plan I can offer:
1. Find an income stream
A historic number of people have applied for unemployment to help relieve financial strain. In the mean time, pursue other sources of income if you are able. I know that many, many parents are having to provide childcare and homeschooling until school resumes. That's a huge chunk of time to have to work around. Find something (anything!) that can work for you and your family.
For the future: When income becomes stable again, you will be able to restart working your baby steps. Quick review: Baby steps 1 through 3 are to be done in order and individually. Baby steps 4, 5 and 6 are to be done at the same time. Baby Step 1: Have a mini emergency fund of $1,000.00 saved. Baby Step 2: List your non-mortgage debts smallest to largest. Throw any and all extra income towards your smallest debt until it is gone and then move up the list. Baby Step 3: Have an emergency fund of 3-6 months worth of expenses saved. Baby Step 4: Save 15% of your income into a retirement account. Baby Step 5: Save money for future school expenses for your kids (College Savings). Baby Step 6: Pay any extra to your mortgage. Baby Step 7: Live and give like no one else.
Also, please note that there is no shame in pausing your baby steps. We have been in "Stork Mode" since September. We are just aggressively saving money in case we have to cover any unexpected expenses. Pause the steps if you need to. There will hopefully come a time when you can hit the "Start" button again.
2. Keep up the four walls
This piece of advice comes from Dave Ramsey. What are your four walls? Food, Utilities, Shelter and Transportation. If you made a budget and you simply don't have enough to cover some of your extras, those extras need to wait. Dave will tell you first and foremost that you need to feed your family, keep on the lights and water, have a roof over your head and have a way to get to and from a job. Then, prioritize the rest of the line items in your budget and pay them in order of importance. Feed your family before paying on the credit card. Stop putting money into retirement if you can't pay your mortgage. Also, if you can pay your four walls and cover all your bills, then PAY YOUR BILLS! This is just for those of you out there that can't cover every payment.
For the future: COVID-19 appears to be a major wake up call for a lot of people who are still playing around with credit cards and car loans - not to mention student loans. When this crisis comes to an end and income is stable once again, it's time to move into a life where you don't give a huge portion of your paycheck away to payments each month. It's time to kiss that high stress lifestyle goodbye. You work too hard to be a slave to your lenders.
3. Review your budget
If you aren't budgeting each month, do it. You cannot possibly keep track of your money each month if you do not have an idea of what you pay for your food, mortgage/rent, utilities, and transportation. This is a very important step. Please don't skip it!
For the future: Keep consistently making a budget each and every month. Track your spending. If you ever find you or your family in a time of major crisis again, you can review the budget much more easily than if you have to start from scratch.
4. Trim the budget
Look for places to make deep cuts in your budget. Cut the restaurant budget. Meal plan ahead of time and buy groceries for specific recipes. It may be time to cancel some monthly entertainment subscriptions. Call your cable company to discuss what packages or deals they can offer to reduce your bill. Do a check up on all your insurances right now (car, home owner's, renters). You may be overpaying by several dollars each month and right now, those dollars add up.
For the future: Again, if you keep up with an accurate budget each and every month, it will not be hard to know where you can quickly make cuts if another time of crisis strikes again. This crisis may not look like another global pandemic. Instead, it may look like the death of a family member, a chronic or long term illness, your company closing, etc. There are so many things that can happen to each of us in life that are completely unpredictable. Having a working budget means you can cut deeply and quickly when the time comes!
Looking ahead:
We've all heard it: We are living in a completely unprecedented time. Moving forward, what do you think you will change once income stabilizes for your family? Or, maybe your income is secure right now during this crisis but you're still playing the payment game? Now is the perfect time to make a game plan no matter where you are in the baby steps. Good luck and please feel free to reach out if you need any help. I have many, many resources I can share!
Thank you for stopping by Parenting on Pennies! We hope and pray that all of you are staying healthy and well during this time. See you soon!
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