If you’ve never been through a financially lean season, consider yourself extremely blessed. I find that even the most financially savvy families go through a period of time where finances are tight or simply non-existent. Most times is due to a job loss, illness or an unexpected emergency. Regardless of the reason, I think we always have to be prepared to get through a rough financial season. Why? Because if we don’t plan for it, the effects can be financially devastating.
How to Survive a Financially Lean Season
Create a bare bones budget
Create a budget that includes all of your utilities and debt. What can be canceled out if your income was significantly decreased? Essentials should always be listed first (i.e. housing, food). During our leanest years, I used coupons like it was my business, we cut off our cable and also ditched our expensive mobile plan. We also got rid of a car that carried a hefty monthly payment. I can now appreciate this period of time in our lives because it helped me appreciate the little things in life along with teaching me new frugal living skills.
Start saving now
No one wants to think about losing their job or facing a family emergency. But unfortunately it happens all the time, and most families are not prepared for it. Not all jobs offer disability insurance and if they do, not all will approve claims immediately. You have to start saving for those in-between months and beyond. I’ve seen families fall into desperate times because they were relying on unemployment benefits or hoping to find a job right away. Don’t rely on “maybes”, instead prepare yourself the best way you can by saving for those leaner months.
Get rid of debt
When money is tight you won’t have excess funds to pay off debt. Aside from saving money, consider paying off your debt as quickly as possible. I love Dave Ramsey’s snowball method and find that it works best for us. One way to cancel out a big chunk of debt is to find ways to earn extra income to pay it off quicker. If you have a car loan, consider getting rid of your vehicle and buying a car with cash. If you get a refund during tax season, consider paying off debt instead of using it to upgrade electronics or go on trips. Paying off debt requires serious sacrifice, but it will all be worth it in the end.
Simplify your life
Nothing puts life in perspective like facing a financial crisis. When you don’t know if you’ll have enough income to cover your expenses for the month, buying trendy clothes or dining out is no longer a priority. When we embrace a simpler lifestyle it becomes easier to focus on what’s truly important. We see life’s gifts with a different appreciation and accumulating stuff takes a backseat. Here are some my favorite ways to simplify:
- Cut back on your commitments.
- Repurpose furniture instead of buying something new.
- Go grocery shopping once a month.
- Enjoy free family activities.
- Stop shopping unnecessarily.
I grew up in a low-middle income home and watched my mom make something out of very little. Her meals were simple, yet tasty. Our furniture was inexpensive, but our home was always tidy and clean. I never felt deprived or like I was missing out on anything. I’m now grateful that I didn’t get everything handed to me as a child because it has helped me appreciative everything I now have.
Are you financially prepared to survive a lean season? I’d love it if you shared your tips!