It’s hard to think long-term, especially when you are in crisis mode. So many are taking it day by day, which is completely understandable. However, in order to minimize the financial hit your family will take in the long-run, do not put off reviewing where you can cut expenses asap.
At home, it is important to identify true necessities versus luxuries. Take it by category, and drill deep. For example, with housing costs, where can you cut costs? We all need a roof over our heads, but if you are on a month-to-month lease maybe now would be a good time to ask for a reduction in rent or look at other alternatives?
Food is definitely necessary to our survival, but where and what we buy is up to us. Transportation is another necessity, but maybe if your vehicle is leased and your contract is about to expire, now might be a good time to consider something cheaper or look into a purchase that will last longer?
Medical care, obviously is critical now more than ever, but perhaps out-of-network options need to be re-evaluated, and certain non-essential services can be extended a little. If you think you are about to get laid off and lose some benefits, or maybe you have put off getting medical insurance, this should be a wake-up call to look into your options. And while you are at it, why not review all your insurance benefits? Do you have enough life and disability insurance? What about long term care? One of my friends, Ellen Davis, who owns Life, Health, Home Insurance Group, LLC, which is based in the DC Area just confirmed that she is offering a free 30 minute insurance review.
Finally, we get to truly discretionary expenses– and while clothing, travel and entertainment should be some of the easiest to cut, those expenses pertaining to our children like private school, their nannies, tutors, extra-curriculars, etc. are going to be some tough choices that no doubt will be challenging for all of us that are parents.
Short term losses here can help you with long-term gains, but if you lack the expertise to make good financial decisions during these challenging times, reach out to a financial expert. Also, if you have legal obligations (like alimony or child support) do not delay in consulting an experienced matrimonial attorney about the feasibility of a modification.
We all need to make sure we cover all our bases, meeting our legal obligations while working with a realistic household budget, and developing a plan for how to cover shortages in the event the economic impact of COVID-19 lingers beyond the next few months.
Money talks are never easy, but they are inevitable and essential to weathering tough times. Resist the urge to bury your head in the sand, and know that you are not alone in facing the challenges that lie ahead.
By Regina A. DeMeo