Hard times. We heard our older generation talk about “hard times,” but I do not think we really understood. Maybe we still don’t fully, but I think we understand a little more than we did.
A lot of families are now falling under the “hard times” and if they are not yet, they are coming.
We never thought this was going to happen. We could not imagine a world where there was no March Madness, no more concerts. Our gyms are closed as well as our hair salons. Businesses are having to shut their doors for the health of the community and to “flatten the curve.”
I totally get it, but that does not mean it was ever expected. Unfortunately, I think we all now understand the point of an emergency fund and having 3-6 months’ worth of expenses saved up in case of hard times.
April is financial literacy month. How literate are we with our finances? Do we understand we need to bring in more (income) than we are spending? I think most people do, but do not know where to cut expenses to make that happen.
Answer “yes” or “no” to the following statements to find out your financial wellness:
1. I have a budget.
2. I pay my bills on time.
3. I have money set aside to cover three months of expenses in case of an emergency.
4. I have health insurance.
5. I have auto liability insurance.
6. I am saving for my retirement.
7. I know my debt to income ratio.
8. I pay more than the minimum payment on my credit cards each month.
If you answered “yes” to most of these statements, you are doing well financially. If you answered “no,” it is time to control your spending habits.
The first step is to gather up your expenses. These are the bills that are necessary to pay each month (water, electrical, cell phone, etc.). Next, add up all your debts. Your debts are payments you owe, such as a mortgage, car loan or student loan.
Add both of those together and then subtract it from your total income. Remember your total income is income from a job, disability, child support or any form of incoming money. If you owe more than you are making, it is time to make a budget and start looking for places to cut back.
Fuel and food purchases are two that can be flexible. You can decrease fuel cost by cutting down on excessive driving when it is not necessary. There are also smart phone apps you can use to get fuel points or cheaper prices when visiting gas stations.
Cutting down on food cost can work the same way. There are smart phone apps where you get cash back or you can pay attention to store sales and buy more store brand food items. Pay attention to the unit price when purchasing food items. Buy frozen or canned produce instead of fresh to cut down on cost, and they also have a longer shelf life.
Once you get a budget established, you can work on cutting down on debts faster so you can start saving for an emergency fund. Ideally you want three months of money saved that will cover all your essential needs. It might sound impossible, but the reality is we need to prepare ourselves for the worst case scenario. Many people are not prepared, and their stress levels are rising. Help yourself prevent this from happening by getting prepared now.
For more resources on budgeting contact the N.C. Cooperative Extension at 586-4009 or contact me at firstname.lastname@example.org.
Our physical offices are currently closed. However the staff is working remotely and will be happy to answer any questions you have. Visit our Facebook page and website, Jackson.ces.ncsu.edu, to stay current with Extension programming. Stay safe and wash your hands.
Emily McClure is Family Consumer Sciences agent for the N.C. Cooperative Extension-Jackson County Center.