Budgeting during these uncertain times caused by the Coronavirus pandemic is nerve-racking. Some of you may have lost your job or experiencing a sudden drop in income. As of mid-April 2020, 22 million Americans have filed for unemployment during the Coronavirus breakout, according to the Washington Post. If you’re still employed, you still might be worried if your company can stay afloat. No matter how helpless you feel, you still have control. It’s okay to alter your budget goals right now. Here are some tips on budgeting, saving, spending and investing. It’s okay to change your budget style during the Coronavirus.
Why you need to change your budget style during the Coronavirus
It is safe to say that the Coronavirus is changing our daily lives and finances. Large nations’ healthcare systems and financial markets are struggling. We still don’t know when this will end, and what life will be like.
For this very reason, we need to reevaluate our finances and adjust the way we normally deal with our money. This may mean adjusting your budgeting style or pausing some of your finance goals.
Some changes are inevitable as we are naturally spending less as we all spend more time working and staying at home. Some of these ideas may not be so obvious though. Here are some positive budget changes you should make during the Coronavirus outbreak.

Budget Style Changes During the Coronavirus
Before we begin, let’s make one thing clear. Continue to create a monthly budget. Don’t give up if you just started budgeting. This is the time to really dig in and start understanding your finances. If you haven’t started budgeting, read this article on how to start a zero-based budget.
Table of Contents
Basic Budgeting Changes
- Make a bare-bones budget. Calculate your basic expenses to survive including food, shelter, utilities, transportation, and basic personal and household items. You may not need to resort to using it, but it’s a good idea to have it ready sitting in the wings just in case. It’s easier to create a bares bones budget when you’re not stressed out trying to make things work.
Debt Payoff Changes
- Pause extra debt payments and your debt snowball. Just pay the minimum payments right now. Save the extra payments in your emergency fund or use it for basic budget expenses if you need to. When this is all over, you can throw what you have saved towards your debt.
Saving Changes
- Stop saving in sinking funds which are smaller saving buckets for upcoming known expenses. Sinking funds are targeted savings set aside for items like holidays, birthdays, car or house repairs, or vacations. Focus all of your saving efforts towards your emergency fund. When things settle down, you can redistribute the savings back into your sinking funds if you didn’t have to tap into your emergency fund.
- Beef up your emergency fund to at least 6 months of living expenses. This pandemic is taking a toll on the economy. Prepare for the worse. It’s better to be safe than sorry.
- Don’t be afraid to use your sinking funds or your emergency fund. Only resort to this if you have already cut your expenses to the bare minimum.
Spending Changes
- Don’t make any big purchases if you don’t really need it. You don’t know what the future holds for you and your family. You’ll see tons of deals right now. Businesses are desperate to make a sale. Before you purchase something, ask yourself if this is an absolute necessity or just a “nice-to-have.” Don’t worry. There will be tons of opportunities and sales after this is all over.
- Don’t stock up on products for more than a month. Right now, focus on buying what you need to get by for a month at most. Depending on where you live, cleaning and personal hygiene products may be in short supply or priced higher than usual.
- Lower your personal and entertainment budget. If you’ve lost your job or have experienced a pay cut, then this definitely has to go. If you’re still working, it’s a good time to assess how much money you’ve been spending and possibly lower it. Most likely you’ll be spending less anyways since you’re stuck at home.
- Increase spending items for groceries, household items, or even utilities. You may need to spend more on grocery products as you’re forced to substitute with higher cost alternatives due to availability. You may also want to tip restaurants more than your usual for take-out orders to show your support.
Investment Changes
- Don’t change your investment style, unless you’re forced to scale back due to a job loss. Don’t make any risky investment decisions unless you’re financially stable enough to handle losing your entire investment. Talk to a financial advisor who understands your long-term financial goals if you need more advice.
- Avoid dipping into your 401K or retirement funds. You’ll be faced with a 10% early withdrawal penalty if you’re under 59 ½ years old with most plans. On top of that, you’ll be responsible for paying normal income tax on the amount that you withdraw.
Final Thoughts on How to Change your Budget Style During the Coronavirus
Changing your personal budgeting style during the Coronavirus is a positive step in taking control over your finances. Be proactive and prepare yourself for the worse. This might mean altering your financial goals, pausing your debt snowball, saving more, or adjusting your spending habits. Don’t freak out. Adjusting your budget during the Coronavirus is only temporary. You can pick right back up where you left off when things get back to normal.
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