Get Started Building an Emergency Budget

While it’s too late to save for this emergency, it is not too late to create an emergency budget based on your reduced level of income. To make it easy to outline a budget, use this interactive budgeting spreadsheet or budget workbook. If you’re not sure how much your income will actually be, leave the income section blank for now and start outlining all of your expenses. The spreadsheet will keep a tally as you fill it in.

Start with the most important expenses, which include your housing, medical costs, and reasonable amounts for food and transportation. Remember that these amounts will be different than what you’re used to because your situation right now is a little different. For instance, your transportation and eating out costs might be less, but your groceries might be more if you’re cooking at home now.

Depending on the nature of your emergency situation, other expenses that could be significantly less than before include entertainment, recreation, daycare, eating out, extra vehicle insurance, parking, fuel, transit passes, and personal expenses (i.e. salon and grooming services). Any that come with monthly dues, e.g. your parking pass for work or a gym membership, contact those companies and ask them to put your monthly fees on hold. Save on groceries by cleaning out your fridge, freezer, and pantry before shopping for more. An emergency budget should look and feel pretty bare bones, but that’s what will help you avoid getting into trouble with credit.

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Everyone Gets to Help Balance the Emergency Budget

Include all family members who spend independently in the discussion about how to reduce costs and align them more closely with your reduced household income. For instance, you and your kids and teens may not fully appreciate how much your household is spending on buying in-app items, downloading games, music or pay-per-view movies, or shopping online. While keeping your discussions age-appropriate, this is a great time to talk about family finances.

A discussion also sheds light on how much they are spending and you can take steps to reign that in if needed. For instance, kids who buy in-app items with their games, have them use a gift card to finance their items, and remove your credit card details from their account in the game or platform.

Ask Your Service Providers for Help

As you review all of your bills and obligations, contact each service provider to see how you can reduce what you need to pay by at least 10 per cent. Many internet and communication providers have hardship programs that allow them to waive certain fees, however there may be more ways they can assist when you review your services with them line by line. Don’t be afraid to scale back your service plans temporarily, e.g. decrease calling minutes on your cell phone if you text and can use a reliable calling app. Saving a little on each bill will add up to a lot in the long run.

If you are still able to work from home and need to stay connected, be cautious about scaling your internet service down. Many homes use a lot of bandwidth for work, school, volunteer commitments, side gigs, and entertainment and no one can afford to have an unreliable connection.

Since the COVID-19 pandemic, many home utility providers started offering more extended and flexible payment arrangements to help anyone going through a challenging time. Ask them how their programs work before automatically accepting them. Interest or even fees may be hidden in the revised terms. Moreover, if you defer too many obligations, you could be setting yourself up for a wave of debt later on. The key isn’t to defer all of your payments; it’s to reduce now wherever you possibly can.

Contact Your Creditors for Help with Your Debts

What Happens If You Already Have a Budget?

If you’ve already got a budget, take another look at it to see what solutions you can come up with to scale back your spending during this difficult time. Also look for unique ways to increase your income. For instance, could you tutor college or university students remotely, or help others with their yard work. The change in your routine right now might just give your mind the freedom to think creatively.

Bringing your spending in line with your reduced level of income might not be entirely possible, but the closer you’re able to get to a balanced budget, the easier it will be to get back on your feet.

Focus on Wellness and Protect Your Mental Health

When you feel overwhelmed by your situation and aren’t sure which way to turn, take a step back. Stop your anxiety and fear from taking over by focusing on what you can control and what you can do, rather than on what you can’t control or what isn’t possible to do right now.

Things you can do that will contribute to your overall well-being:

• Focus on preparing healthy meals and snacks; buy single item fresh or frozen ingredients, rather than convenience foods
• Exercise outside; the fresh air and movement will boost your mood
• Avoid excess alcohol, sugary food and drinks, and a steady stream of caffeine because they can cause agitation
• Keep feelings of connection with friends and loved ones by meeting up for a walk, video chatting, or speaking on the phone; this will stave off feelings of isolation and the loneliness that can come with a difficult situation
• Check in with elderly parents or neighbours who may have trouble getting the basics they need; helping others will boost your mood
• Stay vigilant to protect your yourself from scams that claim to provide a quick and easy solution for your situation
• Tackle your to-do list, the one you never seem to get to (like sorting all of your digital photos); prioritize items that will help you recover from these challenging circumstances, e.g. a new resume
• Hang out with your kids and spouse and simply be present; our lives are often so rushed that we forget to just “be” with those we love most

Use Your Emergency Budget to Align Your Spending with Your Goals

When you’re facing a crisis, it’s the perfect time to create an emergency budget or review your existing budget to align your spending with what’s most important to you. Think back to the pandemic and how self-isolation and social distancing made life simpler, pared down to what was most necessary; let that be your guide. The fear of missing out (FOMO), in many ways, was eliminated during the pandemic because life beyond our home’s four walls felt strangely paused. You may feel the same way now as you face a difficult time, but you aren’t alone. If you would like help creating an emergency budget, contact an accredited, Canadian, non-profit credit counselling organization for help. Over the phone, a Credit and Debt Counsellor will review your budget information with you, as well as give you guidance and suggestions to help you manage your overall financial situation in a way that will help you weather this storm.