Has the blizzard out west, the drought some just faced, or various other crisis reduced your income? Many areas of South Dakota are dealing with situations that have affected their income. Many times families do not adjust their lifestyle for six months; however ignoring the situation can bring financial disaster. Your best choice is to take control of your resources as quickly as possible. Be thorough in preparing for this by completing each area in this checklist below. Be sure to involve the whole family in the planning.
1. Take stock of your financial situation.
- a) Prepare a net worth statement (list of what you own and owe).
- b) Make an inventory/list of personal property and estimate the value.
- c) List personal skills of family members.
- d) Identify skills and resources you could trade, sell, or convert to cash.
- e) Accumulate savings to stay at least 1 to 3 months ahead.
2. Examine family resources.
- a) List current gross income of each family member.
- b) Look for ways to reduce paycheck deductions.
- c) Estimate future income or other benefits.
- d) Look for ways to increase income, if needed.
3. List family expenses.
- a) Fixed monthly expenses.
- b) Flexible monthly expenses.
- c) Daily expenses.
- d) Periodic annual expenses.
4. Reorganize family spending.
- a) Look for ways to reduce expenses.
- b) Create a spending plan to live within the expected income.
- c) Separate needs from wants.
5. Control credit.
- a) Maintain credit payments if possible, or contact creditor to negotiate payments.
- b) Avoid new credit (don’t use credit to replace lost income).
6. Network with others in your family and community.
- a) Talk confidentially to family or friends about your situation.
- b) Seek assistance if needed from your church, government, or non-profit organizations.
For more information on coping with a drop in income, view Financial Security: Managing Money in Tough Times.