Getting Your Finances Back on Track
May 26, 2020
Businesses are starting to re-open and we’re headed towards summer in the new normal. While some people are returning to the office to work, many remain unemployed or under-employed. Whatever your work situation, you may be experiencing some financial anxiety as we move from quarantine into an uncharted future.
In the meantime, many businesses and organizations have stepped up to offer support and assistance. You can also take control of your personal finances no matter what your current situation by putting a plan in place and tapping into available resources.
Here are a few suggestions to help you regroup and feel more confident going forward:
Determine your priorities – What are your most critical, immediate needs? Write them down in order of importance, clearly identifying needs versus wants. If you’ve got a partner, you may want to do this together so you’re on the same page. And always ask yourself, “is this a want or a need?”
High priorities may include things like food, medicine, housing costs (include utilities), childcare, transportation, and insurance. Lower priority items are bills that could be reduced, negotiated, or discontinued. These may include unsecured debt (credit cards – contact your creditor to see if you could temporarily reduce payments), non-essential utilities (cell phones, cable, high-speed cable, etc.), and discretionary spending (eating out, entertainment, shopping for new clothes or other items, etc.).
Create a simple, priority-based spending plan – A spending plan (aka, a budget) is a roadmap to track how much money you have, how you want to spend it, and where you may need to boost your income or reduce spending. Keep it simple and focus on what matters, especially now.
A basic spending plan consists of two components: income and expenses. To make it even easier, use your take-home (after taxes) pay to do your calculations.
- INCOME – List all money you have coming in right now, including payroll checks and money from other sources (less taxes)
- EXPENSES – These should include your high-priority needs first, like food, rent or mortgage, car payments. Then add in lower priority expenses and be prepared to adjust as needed.
- DEDUCT YOUR EXPENSES FROM YOUR INCOME – What you have left after paying your expenses is considered discretionary spending, for things like entertainment, dining out and other wants.
Here are a few budgeting tips and tools to get you started:
- Write it down – Whether you prefer pen and paper, a digital format like an Excel spreadsheet, or an online tracking system like mint.com, putting your plan in writing helps you get a full financial picture.
- Take it by the month – Figure out your MONTHLY income and expenses. If you get paid every other week, divide it by two then multiply it by 4.33 to get the monthly total.
- Pay yourself first (PYF) – Include savings as an expense in your spending plan, even if it’s only a small amount right now. You can always increase it (and you should) when your income bounces back.
- Free budget worksheets:
https://www.moneyunder30.com/free-budget-spreadsheet
https://www.greenpath.com/wp-content/uploads/2019/01/Budgeting-Worksheet_GP.pdf - Budgeting apps:
https://www.nerdwallet.com/blog/finance/budgeting-saving-tools/
https://www.thebalance.com/best-budgeting-apps-4159414
Communicate with your creditors – If you’re struggling to make payments on your credit cards or other loans, call your creditor/lender. Now. Evading creditors and ignoring those bills can damage your credit and also lead to collections.
At Unison, our Member Advisors are always ready to work with you to find financial solutions. Give us a call at 920-766-6000, stop by any of our six branches, or contact us online.
If needed, talk to a financial counselor – If you need additional assistance, you may want to contact a reputable nonprofit financial counseling agency. Locally, the Financial Information & Service Center in Menasha WI, offers a free consultation and low-cost, in-person counseling. Another good option for low-cost financial counseling by phone is GreenPath Financial Wellness.