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Personal Finance

4 key steps to crisis budgeting during the COVID-19 pandemic

Financial experts propose separating your expenses into needs and wants to make it through these uncertain times

Couple reviewing bills togetherFacing a financial crisis due to COVID-19? Be prepared to cut expenses to make your budget work (AleksandarNakic/Getty Images)

Creating and following a budget can be hard enough when you have the money to cover all your expenses. But the coronavirus pandemic is hitting Canadians hard financially—and reducing the financial repercussions of this crisis will take some careful planning

Everybody needs a certain amount of financial flexibility. And that includes a dedicated emergency fund. 

“Once we’re through this, I think many of us will have learned the hard way how important it is to have funds put aside for an emergency,” says Doretta Thompson, CPA Canada’s financial literacy leader. “That being said, we are facing uncertain times right now, and there are still some things we can do to prepare as well as possible for what life will look like when we emerge from this.”

The difference when you’re creating a budget during a financial crisis is that you don’t have the same income coming in, adds CPA Stan Swartz, president of Infomoney Solutions Inc.

“There’s no top line or the top line is diminished,” he says. “How do we make do between whatever the government is providing or savings we’ve able to utilize.”

Here are a few ways you can prepare a COVID-19 budget to help you make it through the financial crisis. 


Knowing where your money goes is a key factor in making your budget work. Particularly in times of crisis, it’s important to take a hard look at what you’ve been spending over the past year. 

“You’ve got to look back and see where you were spending your money before you look to see what you can do today,” says Swartz. “Get the credit card statements, get your bank statements and get an idea what you had been spending before all this happened.”

Examining where your money has been going will help you eliminate non-essential spending going forward.


“We don’t know how long the crisis will last, so it’s crucial to look at what is a necessity and what is just nice to have,” says Thompson. “Now, when staying healthy is job one,  it’s important to focus on the essentials: housing, food, medication and utilities. Once those are covered, you can look into what can be put aside to prepare for the immediate future.”

She adds that, if you’re facing loss of income, it’s critical to eliminate all unnecessary spending immediately and even discuss short-term changes to your repayment schedule for existing debt with your lender. 

Swartz also prioritizes debt, saying it’s a matter of trying not to increase it.

“So, can you manage it? Have you looked at all the government programs that will help you get through it? Call the credit card companies or call the mortgage company. Take advantage of payment reductions and deferrals.”

He adds that, while it’s tough to do, you’ve got to look around and ask yourself what you can do without.

“If there are two cars in the family, can you get away with just one? If you have been bringing somebody in to clean your home on a regular basis, can you do that yourself now?”


Thompson suggests focusing family time on low- or no-cost activities

“For those in your bubble, look to ‘old’ ways of being together, such as cooking together and family games nights,” she says. “And, for those we cannot be with physically, use technology to extend togetherness. Schedule regular video chats and shared experiences such as baking or playing music. Most internet providers have removed limits to bandwidth, so take advantage. Or even try things you have wanted to try—dust off those sketch books or that guitar.”

Many cultural institutions are offering free virtual walks, talks, classes and performances. And libraries are still offering online resources. You can also use this time to keep up-to-date professionally, with a variety of free online resources available to help you learn and connect.


When it comes to budgeting, it’s not just one member of the family that should be doing it, Swartz says.

“If you’ve got a partner or a spouse, you’ve got to sit down with them and say, ‘What are we going to do’. Even bring in the kids if they’re able to understand. Get them in on the family meetings and let them know that we’ve got to tighten our belts a little bit.”

Financial issues can be complicated and Swartz says you can even talk to people outside your family.

“Discuss with friends and colleagues what you may be dealing with,” he says. “You don’t have to tell them the exact situation. Just ask how they’re getting through; what changes they’re making. Maybe it starts a conversation and an exchange of good ideas.”


Looking for tax-related information pertaining to COVID-19? You can visit CPA Canada’s webpage dedicated to federal government COVID-19 tax updates. CPA Canada also has educational materials targeting the diverse financial needs of Canadians and resources specifically on moving forward if you lose your job

You can also establish what government support you are eligible for and stay up-to-date with the latest news related to the accounting profession.