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Reduced Income Budgeting (With Spreadsheet)

Have you been laid off? Or your income reduced as a result of COVID-19? If you’re making less money, it’s a smart time to revisit your budget. It can be frustrating dealing with this sort of uncertainty, but, at least from a budgetary perspective, it doesn’t need to be complicated.

Let’s find some ways to help you cut spending and save money. We’ll also show you how to create a simple new budget to help you get through this challenging time.

Click to access spreadsheet

Track your spending

To help you create a new budget, you’ll first want to take stock of your monthly spending to help decide what can be tweaked or cut altogether.

Start with your living expenses – the essential day-to-day fixed costs that you’ll need to take care of first.

Living expenses

While these are things you’ll still need to pay for, you might be able to cut costs.

Speak to your landlord about potentially lowering rent for a few months before you get back on your feet. Try to use fewer utilities – wear more sweaters, turn off the lights, or go outside for walks. Speak to a mortgage broker about deferring your mortgage (but keep in mind you’ll still owe those payments plus extra interest eventually).

Transportation costs

  • Transit passes
  • Car payments
  • Car insurance
  • Gas
  • Maintenance

Your daily travel has likely been cut drastically during the COVID-19 lockdown. That means you might be able to forego transit passes for a few months or save money on gas and maintenance. You can also speak to your car insurance provider about lowering your insurance rate because you’re now driving less.

Your debt payments are another category you’ll want to take stock of.

Debt payments

  • Credit card payments
  • Lines of credit
  • Student loans

After creating your new budget, you realize you might have trouble making debt payments. If so, speak to your financial providers about lowering interest rates or deferring payments.

Several banks are offering lower interest rates on credit cards to help their customers better manage their budgets during the COVID-19 pandemic.

The Canadian government suspended student payments from March 30 to September 30, 2020. During that time, student apprentice loan payments will be suspended, pre-authorized debits will be put on hold, and no interest will be accrued.

Savings and investments

  • Short-term savings
  • Medium-term savings
  • Long-term savings
  • RRSPs
  • TFSAs
  • RESPs

Hopefully, your new budget will still allow you to continue making your savings and investment contributions. But, if money does get tight, you should prioritize necessities and debt repayment. Don’t worry, though, putting your savings contributions on hold is only temporary until things return to normal.

If you can continue saving, that’s great!


Your phone and Internet will continue to be essential, so you won’t be able to cut those out entirely. You could switch to a cheaper cell phone plan for the time being (you won’t be using as much data while you’re at home, for example, so you could switch to a plan that includes less data per month). You could also consider cutting cable, if necessary.

Also: If you don’t have an unlimited Internet plan, take a look at your monthly usage. It might be worth switching to an unlimited plan during the pandemic if you find that you’re using the Internet more often than before (and, let’s be honest, who isn’t?).

Food – groceries, delivery, and alcohol

Note how much you spend on the following categories:

  • Groceries
  • Takeout/eating out
  • Delivery
  • Alcohol

We all need to eat, but there are ways to cut back on food spending. That might include spending less on delivery and takeout, shopping at more affordable online grocery stores, or strategically shopping during sales.

A spending category that often gets overlooked is weekly/monthly/yearly subscriptions. Sure, Netflix comes to mind, but you might be surprised if you write down every other service that automatically withdraws money from your account. Here is a list of some common ones:

  • Streaming services (Netflix, Spotify, HULU, Disney+)
  • Gym memberships
  • Food delivery (Hello Fresh, Goodfood)
  • Shopping (Costco, Amazon Prime)

This is another area where you can cut costs. You likely aren’t going to the gym, so why not put that on hold, if it’s not already. Make a mental note of how often you’re using each streaming service and consider cutting the ones you spend less time on.

Finally, keep track of all other purchases that may not fall into one of the above categories.

  • Clothing
  • Gifts
  • Miscellaneous shopping
  • Entertainment

You could hold off on purchasing any new clothes for now and try to cut down on online shopping to save a few bucks. The temptation to buy something new is high when you’re sitting around but look on used websites like Kijiji and Facebook marketplace. Tons of people are purging right now with nothing else to do.

Make a list of priorities.

Your main priorities should be essential living spending, debt repayment, and saving and investing – in that order.

Once you’ve tracked your monthly spending, assign priority rankings to each of the other items in your budget.

There are several ways to do this. You could rank them 1-3 from non-essential to absolutely essential. Alternatively, determine how necessary your non-essential spending is by deciding how much joy they bring to your life. For example, I use Spotify daily, so —while not absolutely essential—it’s something that enriches my life. However, if money is especially tight, Spotify does offer a free version. So, you could consider switching to that temporarily.

The same goes for food delivery boxes. I enjoy learning to cook new things, and I appreciate the door-to-door service during the pandemic. It saves me trips to the grocery store and helps me be better at social distancing. It’s also helped me cut down on food delivery costs – I now try to order in only once a week, on Fridays as a treat.

Once you think of spending in these terms, it’ll be easier to make necessary cuts.

Seek relief

If you’ve lost your job and haven’t already done so, sign up for the CERB program. The Canadian Emergency Response Benefit pays $2,000 per month and lasts for four months.

The program is available to those who are self-employed, contract, or temporarily laid off as a result of COVID-19. To qualify, you must be a Canadian resident who is 15 years old or older, and who made at least $5,000 in 2019 or during the 12 months preceding the day on which they apply for the benefit.

The bottom line

These are unprecedented and challenging times. People are struggling and stressed. Things will one day return to normal but, until then, put together a new budget to help you get through; we hope these tips and the attached budget will help. If you want a digital version, check out’s online budget planner.