Controlling Spending

With the 4 day work week that many Delaware County employees face, it is even more imperative that families adjust their spending lifestyle.  When the family faces reduced income, they should take immediate action to stop any excess spending until a "new normal" can be established.

Studies suggest that families do not adjust their lifestyle for about six months after their income is reduced.  Ignoring your financial situation can make things worse. Be proactive by taking charge of your finances so that you are making a positive contribution to your family’s well-being now and in the future.

Here are some tips you can do NOW to control your family's spending:

• Make a finance journal.  Keep track of all revenues and expenditures each family member makes for the week.  This allows you to get a good idea of where money is being spent, when it is being spent, and who is spending it.  It also allows you to see when and where money is coming in.  

• Determine your fixed and variable expenditures.  Expenditures fall into 2 distinct categories:  fixed and flexible.  Fixed expenditures are those items required for survival whose amount does not fluctuate on a weekly, monthly, semi-annual, or annual basis.  Examples of fixed expenditures are rent/mortgage, car payments, school loans, credit card payments, insurance, retirement installments, and medications.  Flexible expenditures are also required for health and survival, but their costs can fluctuate depending upon your needs.  Examples of flexible expenditures are groceries, utilities, gas, clothing, and any "luxury spending" like eating out or traveling.

• Design a budget, and stick to it.  Once you know your expenses, you can plan to cut back on flexible expenditures to meet your new financial needs.  However, you may have to investigate options to reduce your fixed expenditures as well.  Make sure that this new budget is a realistic one that can be attained by all members of your family.  Living within a budget takes teamwork, and can only be attained by every family member working together to make it happen.