by Susan Fotovich McCabe
Special to The Leaven
If nothing else, the COVID-19 pandemic has taught us about the importance of saving for a rainy day. Whether it’s simplifying your finances or building an emergency fund, our fiscal footprint can change at a moment’s notice.
Adam Clement, a licensed clinical marriage and family therapist with expertise in financial planning, offers a glimpse at cost-cutting measures people can take during the pandemic and beyond.
The Leaven: In a pandemic, is it important to simplify finances?
Adam: It is always important to understand personal finances. Understanding what comes in and goes out lessens anxiety. It takes effort, but helps you control your finances and adjust as necessary. It provides a sense of structure and order in a time of uncertainty.
Today is a good time to step back and control what we can. Knowing where we can reduce and what we have to work with is vital to our financial and mental health.
The Leaven: How are personal finances different from a year ago?
Adam: The pandemic has profoundly affected global finances. Fortunately, some families remain consistent with their financial situation. Others have been hit hard.
There’s a new paradigm of financial security. Supply and demand have changed, as well as job security and a guaranteed income. For some, the stimulus package was a necessity. For others, it was an unexpected bonus.
The Leaven: How do you get started?
Adam: Anytime is a good time to start tracking your income and expenses. Online budget tools and forms can help you know how much you have left after paying necessities like rent and utilities.
This process provides a yearlong look at fluctuating bills and irregular finances. For example, families should save money throughout the year to prepare for December holidays, since it is a more expensive month.
The Leaven: What about hidden fees, such as late payments and rising prices?
Adam: Budgeting gets easier over time and reveals problem areas that can go unnoticed for years. Certain debts, like credit cards, can accrue interest at rates faster than most savings accounts.
Regular tracking can identify inconsistencies sooner and avoid mischarges and account fraud. It forces families to consider whether their money is being spent wisely and if there are areas to cut, such as unused services or memberships.
The Leaven: Can you save money in a pandemic?
Adam: There are simple ways to reduce spending during the pandemic. When shopping for groceries to eat at home, reduce unnecessary purchases. Ordering online can help you avoid impulse buys.
Save the money you would normally spend on entertainment that is no longer available because of the pandemic. Review memberships and discretionary spending to identify areas to save during uncertain times. Contact service providers and ask for discounts or assistance when facing financial hardship. Reassess what you need and what you want. Entertainment, personal care and restaurant priorities may look different when sticking to a budget.
The Leaven: How often should we assess our finances?
Adam: Ideally, we would assess personal finances monthly. This serves to confirm things are running smoothly and as expected. Make adjustments to your plan and address it again during emergencies. It is much easier to adjust a plan than to establish a new one in a crisis.
The Leaven: How should spouses communicate about family finances?
Adam: Finances can be a sensitive topic for spouses. It is important to remember you are a team. How you tackle financial issues going forward is more important than assigning blame. Finances are an ongoing discussion.
Because these discussions can be taxing, it might be necessary to take a break and revisit issues that differ in importance to each spouse. Neither spouse should be solely responsible for the financial health of a family. Even if one spouse takes the lead, a team approach is key to meeting each other’s financial goals.
Adam Clement is a member of St. Joseph Parish in Shawnee and operates a private practice in association with Christian Psychological Services of Kansas City. His areas of focus and expertise include couples’ communication and vulnerability, addiction education and recovery, adjustment through life transitions, and balancing work stress.