Being able to adapt our finances is a constant juggling act. However, many of us have had to walk a tight rope of not only managing our finances but also taking care of loved ones who have been impacted by the pandemic.
If you are wondering how you can take care of your loved ones without putting financial strain on your finances, here is what you need to know.
Be honest with what you can do
Being honest not only with yourself, but your loved ones can help manage expectations on what you can and cannot afford. You may need to consult a financial advisor to establish a maintainable way of helping your loved ones without putting a strain on your finances.
Checking 2-3 months' worth of bank statements can give you a realistic picture of your expenses, what needs to be cut back on and what can be used to assist your loved ones. Having an open and honest conversation around finances is a tricky thing for many people, but it can prevent you from being guilt-tripped into something that will be hard to maintain.
Join forces where possible
A report by Old Mutual revealed that 75% of South African's are either planning on taking on the financial responsibility of taking care of loved ones or are already taking care of family members. Being the sole breadwinner in a household can be strenuous, especially if there is no financial plan in place.
Wherever possible, share the load of the financial responsibility by pooling funds as a family into a joint savings account. It may be more practical to cut back on expenses, downsizing or looking for frugal ways such as making bulk purchases. Keep in mind that you will need to adapt your finances to match your situation.
Create a financial safety net
No one knows what tomorrow holds, but what we can do is plan for the future by creating financial safety nets that can act as a buffer against unexpected expenses. When it comes to being able to juggle an unforeseen expense of R1 000 only 2% of working households could handle the expense.
The majority of South African's (58%) would have to reach into their savings to create a buffer. However, dealing with larger expenses such as funeral expenses could sink many people's budgets. Furthermore, not having something like a life insurance policy to ensure life continues for your loved ones could leave them financially exposed. Think ahead by creating financial safety nets that can give you enough breathing room.
Learn to say no
Learning to say no without the guilt is difficult, but it could save you from pushing yourself into the red financially. There are other ways that you can help a friend or family member instead of breaking your budget or taking out a loan on their behalf in the hopes that they will pay you back. You can offer to provide food, financial advice, budgeting tips, or transport if they need it. You can ask them if they need help in any other way, but keep in mind not to overextend yourself by offering to provide something you will not be able to give or making promises you can’t keep.