Maybe life was chugging happily along for you when the pandemic suddenly hit and the bottom dropped out. Or maybe you were already struggling before COVID-19 came along. Either way, one crucial tool that can help you navigate is a crisis budget. If you weren’t following a budget before, it’s time to get started. If you were already using a budget, great—you have some practice examining your finances and a foundation for budgeting during a crisis.

What is a crisis budget? Unlike a garden-variety household budget, a crisis budget is:

  • Urgent: Financial crisis doesn’t often give much warning; it’s crucial to respond quickly.
  • Drastic: Strict spending limits can feel extreme, but they’re necessary to limit damage.
  • Temporary: This is the good news. A crisis budget is intended to help you stay afloat until you can make other changes, and conditions begin to return to normal.

As you build a crisis budget, the most important thing to know is the difference between wants and needs. It’s not always easy, but when things return to normal you can take pride in your resilience (just as you feel relief that it’s finally over!).

How to Build a Crisis Budget to Ride Out Hard Times

  1. Accept the new reality.

Sudden life changes can be shocking, and it’s normal and human to grieve the loss of what you had before. But it’s also crucial to accept the new circumstances so you can make clear-headed decisions moving forward.

  1. Figure out exactly how much money you have coming in.

Often, a drastic change to income is part of the crisis. Review all sources of monthly income for a clear picture of what you have. That’s your starting point for budgeting during a crisis.

  1. Distinguish wants from needs.

Meet basic needs first: food, shelter, utilities, necessary medications and transportation. Once those are met, consider other needs that extend beyond the basics, such as insurance, Wi-Fi service (for school or work) and a cell phone plan. Beyond these, ask yourself what you can do without. As tempting as it may be to turn to “little” treats for comfort in hard times, find free or homemade alternatives instead of hitting the coffee shop or bakery. In a “normal” crisis, it can be tough to cut kids’ activities or the family gym membership, but short-term sacrifices can save you from deepening your debt. For better or worse, the COVID-19 crisis took away some decisions as activities were canceled and many businesses suspended services.

  1. Determine whether your income covers your expenses and more.

If it does, congratulations! Send that difference straight to savings and get started on your emergency fund. If it doesn’t, it’s time to get creative and find more ways to reduce expenses.

  1. Look for opportunities to slash spending, even on necessities.

You might nix bottled water or soft drinks. You can trim costs by choosing generic instead of name-brand products. You may be able to downgrade your home Wi-Fi or phone plan, or reduce insurance costs (by suspending coverage for vehicles you aren’t currently driving, dropping optional coverage, asking for discounts and more). Save on utilities by adjusting your thermostat and being more mindful to turn off and unplug devices. Learn to love leftovers.

  1. Manage debt proactively.

Once you’ve accounted for your income and your expenses, determine whether you can make your payments. If the answer is no, contact lenders to seek relief options like extending loan terms or consolidating credit card debts for a lower rate. Call your utilities providers to inquire about payment plans.

  1. Check your accounts more often than you think you should.

This is especially important if you were not using a budget before. Keep an eye on your accounts for auto-pay subscription services or other recurring expenses you may have forgotten about—and cancel those subscriptions!

  1. Frame the challenge in terms of what you can

Under normal economic conditions, many people take on a second job when times are tight—but a lot of those jobs are scarce now. Empower yourself to see the challenge in terms of what is possible. You may have items around the house that you’ve been meaning to sell. You could trade or barter goods or services with friends or neighbors. You can learn to cook using inexpensive staples like beans and rice. You can walk or jog for exercise and find free activities for entertainment.

  1. Don’t add to your burden by deepening debt.

If you can avoid it, do not use credit. It can be tempting to get your hands on a credit card and charge your way through the crisis, but that’s just kicking the can down the road. And whatever you do, resist the urge to walk into a storefront payday lender or apply for an online payday loan. Instant payday loans not only have higher interest rates than most credit cards, but they can also include expensive fees. Plus, if you can’t pay on time, the penalties can be crippling.

  1. Ask for help.

It can be uncomfortable to ask family or friends for help, but if a trusted person in your life wants to help out, let them. Rather than ask for money directly, ask for grocery gift cards, help setting a budget or ways you can trade your skills (such as offering to clean someone’s house if they’ll change the oil in your car).

Most important, please remember, a crisis is temporary, and the whole point of a crisis budget is to emerge intact from hardship. Difficult times can happen to anyone. Better times are ahead and the skills, discipline and resilience you develop while working through this crisis will help you face future challenges from a position of strength and confidence.

You can do this.