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How to Adjust Your Budget When Financial Priorities Shift

How to Adjust Your Budget When Financial Priorities Shift

By Kia Jackson • August 20, 2020

If you’ve been working hard over time to create a budget and stick to it, you know how rewarding it can feel to have a solid plan in place to keep your finances on track. But when an unexpected job loss, medical emergency or even a global pandemic causes life to take a dramatic turn, your priorities have to shift immediately — and your budget has to shift accordingly.

If you find yourself in this critical financial situation, here are actions you can take right now to get a handle on your budget as you navigate this uncertain time:

Be realistic about your current financial situation.

Maybe your work hours have been greatly reduced or cut entirely. Maybe your child care costs have suddenly increased due to school or camp closures. Maybe you’re dealing with medical costs or helping a family member with theirs. Whatever has happened to impact your finances, it’s important to get a firm grasp of what funds you have available right now.

And if you happen to have an emergency fund, now’s the time to use it.

Prioritize the most important expenses

The most important costs in your budget to manage during a crisis are housing, groceries and debt.1 If transportation is needed for work, car insurance and payments also should be among your top priorities. Everything else on your budget must be reevaluated to determine whether they can be limited or cut.

Also consider lowering your food budget. The amount you previously allocated in your budget for groceries may be more than necessary, especially now. Eliminating the extras and buying only what you need lowers your costs and gives you extra money that could go toward other expenses. Remember, every dollar counts.

Determine if you can pay for core essentials

Once you are clear about exactly how much money you have available and how much your essential expenses are, determine if you have enough to cover them. If not, it’s crucial that you take action right away to ensure you can maintain a basic standard of living. Contact your landlord or mortgage company to discuss what payment options are available for crisis situations. You may want to inquire about a deferment, which could give you extra time to make your payment. If you’re unable to work out a plan and your basic living expenses are in jeopardy, you may need to look into other ways to get cash fast in an emergency.

Organize remaining expenses by due date

If you have enough to cover your most essential living costs, it’s time to run down your list of other expenses, to make sure you can cover those too. If you have an existing budget, organize your list of expenses by due dates to help prioritize what needs to be paid and when. If you don’t already have a budget, try using a budget calculator to identify your household expenses. This is a good time to reexamine expenses like streaming subscriptions, gym memberships and music services to decide whether you should eliminate them, reduce your service or put them on hold.

Once you total up all of your expenses, determine if you have enough to pay them when they are due. If you cannot pay on time, contact your lenders immediately to discuss options. Many companies have hardship programs in place to help in emergency situations. But you must contact them right away before you miss payments.

Revisit your budget more frequently until things get better

During this time, be sure to monitor every single purchase and financial transaction carefully. The key is staying in control of where your money is going every month, every week, every day. And until your financial situation stabilizes, you’ll want to revisit your budget often and adjust when needed.

Remember, you don’t need to scrap your old budget and start over. You may simply need to direct your available funds to other places from time to time. For example, if your work hours have been reduced, you may find that you’re now spending less on gas and lunch. That money can be redirected toward your utility budget, since that bill is likely to rise now that you’re home more.

Look for ways to cut expenses across the board

Now is the time to take a close look at everything you’re spending money on. If you currently pay someone else to cut the grass, for example, think about how much you could save if you cut it yourself. If you’re a homeowner, consider refinancing to either lower your mortgage payment or tap into your home’s equity for additional money. The key is examining all of your options for saving and earning money until things bounce back.

For help with creating your budget, take this 5-minute micro course to get a clear picture of where your money is going and a clear plan for how to make every dollar work to your advantage.


The information in this article is provided for general education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. It is not intended to be and does not constitute financial, legal or any other advice specific to you the user or anyone else. The companies and individuals (other than OneMain Financial’s sponsored partners) referred to in this message are not sponsors of, do not endorse, and are not otherwise affiliated with OneMain Financial.