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How to build an emergency budget

If your income has been affected by coronavirus, building an emergency budget could help you figure out where you stand and how you’ll manage your money over the coming months.

Here are some steps to help you get started.

1. Review your spending

It might feel difficult to predict what’s going to happen, but start by estimating your spending over the next 3-6 months.  

This is likely to be different from your usual spending – a typical budget will usually include things like transport, travel and entertainment. So, one of the best ways to predict how much you’ll need from week to week is to look at how much you’ve spent in the last month, rather than looking back any further. You can review your transactions in online banking, or on your statement, and group them into these categories:

  • rent/mortgage
  • bills
  • debt payments
  • groceries
  • other shopping
  • healthcare
  • subscriptions 


Try to include any upcoming expenses that you haven’t had to pay in the last month – for example, this could be an annual car insurance payment, or TV licence renewal.

2. Remove unnecessary costs

Once you have a list of all your costs, see if there are any areas you could cut back. 

This could be any discretionary spending that isn’t absolutely vital for the coming months – gyms and subscriptions may be a good place to start. 

You may also be able to get better deals on some of your essential expenses. Review things like your energy, broadband and phone bills to make sure you have good deals compared to what’s available. Even if you’re in the middle of a contract, if you find a better deal online and call your supplier you may be able to negotiate a better rate.

3. Calculate your income

The Government has introduced a range of measures to support people during this time. If you’re out of work, or your working hours have been reduced, you may be eligible for one of these schemes.

Based on Government support and any other income you may have coming in, how much will you have to spend a month? 

You may also be able to get refunds for any school trips, holidays or events you had booked that have been cancelled. Even if you booked a holiday and don’t have travel insurance, you may be entitled to compensation if you paid using a credit card. If you are able to get refunds, you could try to set this money aside as a buffer for any unexpected costs over the next few months.

4. See if there's a shortfall

Now you have a clear picture of what you’ll be spending on a monthly basis and the money you’ll have coming in, will you be able to cover your costs for the next 3-6 months?

If you’re confident you will be able to manage on this new budget, you can use any money you’re able to save to build an emergency fund.

If you’re concerned you won’t have enough money and you have any savings, now could be a good time to use them to help you make ends meet. For example, if you have a fixed rate savings account, you may be able to access your money early without a charge. 

If you don’t have savings, you may be able to get further financial support from your bank. If you’re an HSBC customer and you think you’re going to struggle to repay debts in the coming months, a payment holiday could give you some breathing room. See how to apply for:

5. Get assistance

There are several Government organisations and charities who can provide help and give independent advice about managing money. You can find out about free independent money advisers in your area from:


The following helpline services can offer help and advice:


If you need a hand building a budget, you can use Money Advice Service’s budget tool.

It’s easy to answer your query online. Visit our Help page to find out how.