The ongoing pandemic has changed the lives of many people today. How many of us already miss the simple things that we used to do before the global spread of the Coronavirus (COVID-19)?
Most of us now are working from home (though some had already returned to their physical offices), while attending to our kids that are homeschooling. Some are saying that this setup is much better than having us required to report in person to work. For one, working from home makes us save some of our hard-earned money as we do not need to commute, top-up gas, dine somewhere else, and do unnecessary expenses while out of the comfort of our homes.
Allow me to share some of the best practices and tips that I follow to manage my personal finance during this pandemic.
Set Goals
The main point of having a monthly family budget is to set goals. We need to focus on why we set aside certain amounts from our salaries and count them as expenses. These goals will also serve as motivation for us to sacrifice some of our wants over our needs.
Start Clean Every Month
Each month is very unique from the previous one, which is why we need to start with a clean slate every start of the calendar period. In the budget worksheet that I use (it’s a template available via Google Sheets actually), the computations are based on the amount that went in and out for the said calendar period only — the previous ones are not considered nor carried over.
Make Budgeting a Family Thing
Remember, you are making a family budget, and that is imperative to make it a family activity. Creating a budget and a list of things that need to be included in it by yourself may leave you to miss out on things that members of your family may require for that month. It is best to ask for their wish list of items that may be included in budgeting for that timeframe.
Categorize & Prioritize
More than just a checklist of wants and needs, items in the family monthly budget need to be categorized and prioritized. Of course, among the top priorities should be food, payment of utilities (electricity, water, and internet subscription), rental or mortgage, and allowance for gas or transportation. If you have kids who are already studying, you may also want to set aside for their schooling needs like tuition fees, etc.
It will also be wise to set aside some amount for emergency purposes. For this purpose, I use UnionBankPH EON to automate my savings based on several parameters that I set on their app.
Scheduling of Expenses
Once we have categorized and prioritized our expenses for the month, it is also best to have some sort of schedule on when to actually spend for them. This is where the prioritization of each budget item comes into play. Remember, we need to consider our cash in-flow vis-a-vis our expenses. If you can, consider putting some of the leftover amounts from the budget as your savings.
Pay Off Debts
When creating the monthly budget, it is prudent to somehow pay off some of the debts that you may have. Paying off some of the money that you owe someone or an institution can let you set aside more amount for future budgeting. Also, having lesser liabilities will give you more peace of mind.
Record Expenses
Creating a monthly budget is one thing, and the actual recording of our expenses is another. I keep a tab of our household expenses in a worksheet with two (02) basic columns: Income and Expenses. By doing so, I can monitor how our household spending is fairing versus our income or power to purchase.
Create Plan B, C, etc.
It does not hurt to have plans B, C, and so on to compensate if ever there are changes in cash flow or emergency spending. As the elders will normally say, better to plan for eventualities than not to have a plan at all. You may also want to keep a tab on a pay day loan solution online, just in case things go south.
Remember, one of the key factors to financial freedom is having a budget and sticking with it. It will not hurt for us to keep a tab of our income and expenses to serve as a guide on how we manage our cash flow.