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Setting spending priorities when income falls

Living on a reduced income may be temporary or last longer. Getting the most from family income during this time requires careful planning and wise spending decisions. A spending plan based on needs, rather than wants, will help you balance your spending.

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If you are faced with reduced income or increased expenses, you'll need to develop a spending plan to help you pay your bills. What if your income will be affected for more than a month? You will need to adjust your spending habits to maintain control of family finances over an extended period.

Be realistic

Many people try to hide financial problems from family members or refuse to be honest with themselves. Not facing your problems can be very destructive. The worry and stress caused by financial uncertainty and lack of cash may be worse than the financial problem itself.

It's important to look realistically at your situation. You must actively seek solutions to your problems, even if it is uncomfortable.

Spending decisions affect the whole family 

You need to talk with all family members about the situation. Let them know the family needs to change its spending habits. Involve everyone in setting spending priorities.

When family members understand the tough choices that must be made and have a voice in making decisions, they will be more willing to accept the decisions.

As family members talk about what is most important, be sure to listen to what they say. Supporting each other can help you pull together as a family and get through these tough times.

Get control over your finances


Related resources

America Saves — Includes information for families on how to save and build wealth.

My MoneyFederal Financial Literacy and Education Commission — Website dedicated to teaching all Americans the basics of financial education.

Reviewed and revised by Lori Hendrickson, Extension educator
Originally authored by Sharon M. Danes, retired Extension specialist and professor in family social science

Reviewed in 2020

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