It happens every day and often without warning–people get sick, jobs get lost, situations change. In an uncertain economy and troubling times, how can you plan ahead and prepare your family now for a possible financial crisis in the future?
Take a good look at your budget
What kind of cuts can you make now in your budget? Sit down and go over your regular expenses and try to figure out what areas you can reduce costs and trim the budget. Some ideas would be to set up budget billing for your utility bills to keep those costs constant month to month, cut back on your satellite or cable television or replace it completely with a service like Netflix, make more from-scratch dishes and cut back on expensive ready-to-eat packaged food.
Brainstorm ways to cut back on gas expenses by carpooling or consolidating trips. Look for better deals on cell phone service and Internet service. Cancel magazine subscriptions and opt for reading them at your local library. Instead of paying for movie rentals, rent for free at your local library.
Reduce your utility bills by making a concerted effort to turn off lights. Plug your television and computer into power strips that can be turned off when not in use to cut down on electricity usage when you’re not using those electronics.
Take advantage of sales
Stock up on food and household items when they are on sale and you have a coupon. Having such items stockpiled can guard against rising prices and you won’t need to make an emergency trip to the store when you run out.
Keep an eye on Sunday newspapers for coupons and make use of them if the savings are worth it. I generally only use coupons if the item is on sale and the coupon discount makes it cheaper than generic.
Stock up on personal items, household items, canned goods and the like. When you have the opportunity to get a great deal, be sure to take advantage of it and stock up on several of the items. If a financial crisis comes to your family, it can be difficult to stretch the budget to squeeze out enough money to buy simple things like toilet paper, toothpaste or soap. Stocking up now on items you use frequently can help alleviate some of that burden later on.
Sell items you no longer need
Take an inventory of things you own that could be sold in a yard sale, online, through local classifieds or local pawn shops. Selling these items can provide a small nest egg while also clearing out some clutter.
Stop using credit
Stop using credit cards now and work to pay down your balances. If a financial crunch does affect your family, you might be hard-pressed to keep up with those payments. The lower you can get the payments the better off you will be.
Don’t fall into the trap of payday loans to get you through a tough spot. These types of loans can just put your finances into a downward spiral that you might not be able to pull out of. Make a commitment to not borrow any money to get through a budget shortfall unless it is unavoidable. If you must borrow, approach a family member you trust and who would be willing to float you a short-term loan rather than go to a payday loan place.
Check your attitude
Don’t fall prey to pride. Shopping at yard sales, thrift stores and dollar stores can help your family survive a financial crisis and is nothing to be ashamed of but unfortunately, some people do see this as “beneath them.” Keep your attitude in the right place and be willing to do what is necessary for your family–and keep in mind the great bargains you can find by shopping smart.