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A Guide to Budgeting During the Pandemic

Seek relief from bills and prioritize spending during this tough time

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Thanks to COVID-19, the disease caused by the novel coronavirus, much of the population is under some form of self-isolation, and millions are out of work as businesses shut down. For those newly unemployed, especially, the burning question is: How do I make ends meet?

To some extent, the coronavirus is a budgeting force. Fewer people are driving, which means many are having to fill their tanks less often. Some auto insurers are refunding premiums as more and more vehicles sit idle. And those who are driving frequently, perhaps delivering groceries or commuting to an essential job, are finding low prices at the pump — regular unleaded gasoline now averages $1.84 a gallon, according to AAA, down a dollar from a year ago.

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The coronavirus distancing rules have effectively shuttered bars, restaurants, concert halls, movie theaters and shopping malls — all prime places to bust a budget. And if you were thinking about taking a vacation this spring, well, that money is going to stay in your pocket. For many people, then, the coronavirus restrictions have meant big savings.

"Well, I'm not driving much at all, so I'm saving on gas,” a visitor to the AARP Facebook page writes. “I'm not going out shopping except for picking up the groceries I purchased on the online app. Won't be taking a vacation any time soon. Not getting together with friends for lunch or dinner. I'm not traveling to visit out of town family or friends. My gym is closed, so I'm sitting around the house getting fatter every day."

Nevertheless, roughly 22 million Americans have filed for jobless benefits since the outbreak exploded a month ago. Even if you have more than one earner in the family, and even if you start to collect unemployment, a job loss is going to pinch your budget. Here's what you can do about it.

Figure out your current cash flow

If you or someone in your family has been laid off because of the coronavirus, your first step is to see how much money — if any — you have coming in. If you have applied for unemployment benefits, for example, you should be aware that if your employer laid you off because of the coronavirus, you can get an additional $600 per week on top of the unemployment benefits your state offers. Gig workers and the self-employed are also eligible for these benefits. If you haven't contacted your state unemployment office, now is the time to do so.

You may also be eligible for federal stimulus payments, which are already landing in some bank accounts. Individuals can get up to $1,200, and couples filing federal income taxes jointly can get up to $2,400. Those with dependent children under 17 can get up to $500 per eligible child. You can check with the IRS to see if your check is on the way, add information about dependents, or register for a stimulus check if you haven't filed a 2018 or 2019 tax return.

As a last resort, you can consider tapping your savings. If you have an emergency fund, well, this is what emergency funds are made for. The CARES Act also allows you to take up to $100,000 from retirement funds — penalty-free, if you're younger than 59 1/2. 

You'll still have to pay taxes on your withdrawals, but you'll have three years to pay those taxes, as well as three years to pay the plan back and avoid the taxes. Also, the limit on loans from retirement accounts has been increased to $100,000, from $50,000, and payments on both new and existing loans can be deferred for a year.

Prioritize your spending

Obviously, you need shelter and electricity, as well as food and water. And at least at the moment, corporations, lenders and landlords are in a forgiving mood, and many are allowing you a break on monthly bills.


For most people, the largest monthly bill is their rent or mortgage. If you're worried about making that mortgage payment, it's time to reach for the phone and see if you can get what's called forbearance: You and the lender agree to temporarily reduced or deferred mortgage payments, and the lender agrees not to foreclose during that time.

For example, if the Federal Home Loan Mortgage Corp. (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae) backs your mortgage — and they do for about 80 percent of mortgages — the mortgage giants may offer forbearance for up to 12 months. 

Both companies have also agreed to suspend evictions and foreclosure sales for 60 days, through mid-May.

You can check online to see if one of the mortgage giants owns your mortgage:

Fannie Mae:

Search Freddie Mac:

If you're a renter, you may also get some relief. If you live in an apartment and your landlord gets mortgage relief because of the coronavirus outbreak, you can't be evicted for 90 days if you can't pay rent due to your own coronavirus hardship. Some cities, such as Los Angeles, Boston and New York, are putting halts on evictions. But if you're not covered by a state or municipal ban on evictions, talk to your landlord as soon as possible to discuss your options.


Many utilities are also offering breaks to those who are laid off because of the coronavirus. Many will offer payment extensions and waive late-payment fees, although you'll eventually have to make up those payments. And dozens of wireless telephone and internet providers have signed a pledge to not to disconnect any customers for the next 60 days, to waive any late fees and to open Wi-Fi hot spots to anyone who needs them. 

But you have to make arrangements. “I had to send an email to my cable company to let them know that I am waiting for my stimulus direct deposit to pay my bill,” one AARP Facebook page visitor from Wisconsin wrote.

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Food and other essentials

You need food to live, but it's tougher to find a bargain when many stores are closed, or if you rely on a delivery service. “Buying same grocery items as always, but paying MORE for the same stuff,” writes an AARP Facebook page visitor. “I know, folks, because I really watch what I pay for things."

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And food prices are one thing that's squeezing people in the time of the coronavirus. To get food from farm to table relies on lots of workers, many of whom are falling ill to COVID-19. One of the largest pork processing plants in the country, in Sioux Falls, South Dakota, was closed as numerous workers tested positive for the coronavirus. Egg prices in some areas are up 300 to 400 percent. “Eggs are NOT affordable,” one Facebook visitor writes.

Normal budgeting advice is to look for sales and use coupons when you shop for food. But stores aren't giving much away these days, and even careful shoppers are having a hard time finding bargains. “My normal shopping is buying extra of what's on sale,” one AARP Facebook visitor says. “Now our choices are extremely limited, and it's a take it or leave it situation. We have to pay more to eat."

Rather than look for daily deals, it might make sense to go for lower-priced foods, if possible. Try chicken rather than steak, generic rather than name brands, canned veggies over fresh. The savings can add up.

Finally, while it's hard to skimp on essentials like prescription drugs, you can trim back on nonessentials during tough times: “I am budgeting a wee bit tighter,” one Facebook visitor says. “I cut out a few extras (like fabric and crafts) to buy extra insulin since shelter at home began."

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