| In the midst of a pandemic, the work market becomes very volatile. What happens when suddenly one of the breadwinners is made redundant? What do you do? For those of you who work with a budget, you make adjustments until employment is found again therefore the family is not put under financial stress and does not spiral into debt. So how does one streamline expenses as quickly as possible? |
| STEP ONE – It is imperative to know what your spending habits are before the change. If you do not have a budget, take the bank and credit card statements from before the occurrence and build yourself a preliminary budget. I would recommend taking the last three months as an example. This will give you a good indication of the household expenditure. STEP TWO – Build yourself a budget for your new situation using the old budget as a guideline. STEP THREE – If one needs to streamline expenses to ensure that the family does not go into debt. Remember you cannot spend more than you earn. Use my formula of the four types of expenses to know where you can streamline your expenses: Vital expenses: These have a fixed monthly amount making them easy to predict. These expenses have to be paid on time and one cannot negotiate the amount. Vital expenses These have a set variable monthly amount so they require more thought while budgeting. These expenses have to be paid on time but the amount can be negotiated. Essential expenses These have a set variable monthly amount which can be decreased or postponed. Non-essential expenses These are not vital or essential and therefore can be decreased, postponed or canceled. STEP FOUR Then using your budgeting table, create three columns titled them as NOT NOW fixed expenses that you are unable to change the amount. REQUIRES AN EFFORT – expenses that require an effort in reducing the amount for example electricity, or finding a cheaper supplier. Then EASY items that are easy to streamline for example leisure and entertainment. Now you can play around with amounts so that remain financially stable. |
