By sitcom I do not mean an apartment setting in New York, or a taxi stand, or even a neighborhood bar in Boston. I mean SITCOM, Single Income Two Children Outrageous Mortgage (or even Three children). A situation that is common in North America today; however, it doesn't have to be as bad as the acronym sounds.
Many family households survive with a single income; it may be by choice or force (someone loses their job). However, it was only recently, within the last few decades, where both parents were active in the workforce. There are major benefits with a single income household, but it will depend on the flexibility and determination of both parents. If it is a single income household, because there is only one parent, then the same principles of survival will apply to them as well too.
How do you make your SITCOM survive from season to season?
Many family households survive with a single income; it may be by choice or force (someone loses their job). However, it was only recently, within the last few decades, where both parents were active in the workforce. There are major benefits with a single income household, but it will depend on the flexibility and determination of both parents. If it is a single income household, because there is only one parent, then the same principles of survival will apply to them as well too.
How do you make your SITCOM survive from season to season?
When raising a family, the added responsibility of taking care of others affects the way a SITCOM structures their budget. It is always important to know what benefits they may receive if they are ever laid off from their employment (i.e. employment insurance, social security, etc.). Research your potential government compensation in your area and determine the length of time you will be compensated and the amount you will receive after tax. The importance of this information will help assess your options available to weather any storm.
Create a bare bones budget consisting of your fixed bare necessity expenses (i.e. food on average, shelter, transportation, debt payments, etc.). Compare your bare necessities monthly requirements and your potential compensation if you lost your job tomorrow. If your bare necessities are lower than your unemployment compensation then the risk of increasing your consumer debt may be minimized (unless an emergency transaction occurs); however you should still plan to side aside funds if an emergency occurs. If your bare necessities are greater than your unemployment compensation then you should consider creating an emergency account immediately.
An emergency account is the equivalent of six months of your bare necessities; therefore, regardless of your total monthly needs, an emergency account can provide your family with the financial stability it needs to survive while the individual looks for another job. Government compensation may also take weeks to process, unfortunately mortgages, car payments, and other contractual payments aren't as flexible to wait until you get paid without penalties. Therefore, an emergency account could prevent paying for everyday expenses with a credit card or any other forms of debt.
Once you have established your emergency account, keep going with the monthly contributions and allocate them towards other savings. However, if your household has consumer debt, you may want to consider eliminating your debt before creating an emergency account. The reason being, debt on average is costs more than what savings can pay (i.e. 19% credit card vs. 4% savings account). There may also be a reason why your household has consumer debt - not enough cash each month to pay for your other expenses.
Calculate your total monthly fixed expenses (contractual mandatory payments - memberships, mortgage/ rent, insurance, auto, etc.) and compare it to your total take home pay. If the % is high, you may want to consider either finding employment that pays more to support your current expenses, or start reducing your fixed monthly expenses. A high % of fixed expenses, leaves a household vulnerable to consumer debt in the event of an unforeseen expense (i.e. car repair, medical expense, etc.), because there is not enough cash to afford these transactions.
In SITCOMs with two parents, the individual who is not working could take up part-time work just to help eliminate the remaining consumer debt and save up for their household emergency account. For SITCOMs with one parent, the road to financial stability is a bit tougher, but not impossible. Create an outline of what needs to be paid vs. expenses that can be paid for later; eliminate any consumer debt and then work towards an emergency account. If needed, a way to speed up the process is to attain better paying work while maintain your current standard of living.
It is your script; write your SITCOM any way you want.
I do apologize if my play on words has annoyed any of my readers, but that is how I roll.
Create a bare bones budget consisting of your fixed bare necessity expenses (i.e. food on average, shelter, transportation, debt payments, etc.). Compare your bare necessities monthly requirements and your potential compensation if you lost your job tomorrow. If your bare necessities are lower than your unemployment compensation then the risk of increasing your consumer debt may be minimized (unless an emergency transaction occurs); however you should still plan to side aside funds if an emergency occurs. If your bare necessities are greater than your unemployment compensation then you should consider creating an emergency account immediately.
An emergency account is the equivalent of six months of your bare necessities; therefore, regardless of your total monthly needs, an emergency account can provide your family with the financial stability it needs to survive while the individual looks for another job. Government compensation may also take weeks to process, unfortunately mortgages, car payments, and other contractual payments aren't as flexible to wait until you get paid without penalties. Therefore, an emergency account could prevent paying for everyday expenses with a credit card or any other forms of debt.
Once you have established your emergency account, keep going with the monthly contributions and allocate them towards other savings. However, if your household has consumer debt, you may want to consider eliminating your debt before creating an emergency account. The reason being, debt on average is costs more than what savings can pay (i.e. 19% credit card vs. 4% savings account). There may also be a reason why your household has consumer debt - not enough cash each month to pay for your other expenses.
Calculate your total monthly fixed expenses (contractual mandatory payments - memberships, mortgage/ rent, insurance, auto, etc.) and compare it to your total take home pay. If the % is high, you may want to consider either finding employment that pays more to support your current expenses, or start reducing your fixed monthly expenses. A high % of fixed expenses, leaves a household vulnerable to consumer debt in the event of an unforeseen expense (i.e. car repair, medical expense, etc.), because there is not enough cash to afford these transactions.
In SITCOMs with two parents, the individual who is not working could take up part-time work just to help eliminate the remaining consumer debt and save up for their household emergency account. For SITCOMs with one parent, the road to financial stability is a bit tougher, but not impossible. Create an outline of what needs to be paid vs. expenses that can be paid for later; eliminate any consumer debt and then work towards an emergency account. If needed, a way to speed up the process is to attain better paying work while maintain your current standard of living.
It is your script; write your SITCOM any way you want.
I do apologize if my play on words has annoyed any of my readers, but that is how I roll.
