How to Adjust Your Budget after Job Loss

After losing your job, reworking your budget can help you account for your loss of income and stay afloat.

There’s no way around it — when you lose your job, you will likely need to make some major financial adjustments, especially if you’ve lost your primary source of income. While you may be tempted to simply cut spending here and there, it’s crucial that you take time to formally adjust your budget. Sticking to an updated budget — or creating one if you don’t have one in place — may help you avoid digging yourself into financial hardship later on.

Once you’ve taken care of the immediate steps to take after job loss, the following tips can help you adjust your spending habits.

Build Your Budget Worksheet

Start by creating your budget worksheet either digitally or written on a piece of paper. Use this budget worksheet to walk step by step through creating, or updating, your budget. Create separate columns for income, fixed expenses, and flexible spending.

You may wish to use a budgeting worksheet to help inform your new budget. You can print or save your own version to fill in. The goal of your budgeting worksheet is to help you assess your spending habits while also helping you make decisions about how to use unemployment and any other income you may receive during this time.

Assess Your Income

Determine how much money you’ll have coming in over the next few months by listing each source of income on your budget worksheet. If your employer has offered severance pay, note when you’ll receive your final paycheck. Also, find out what your final paycheck will include — accrued vacation time, sick leave, or back pay, for example. Don’t forget to add any unemployment benefits you may receive, or money received from alimony or child support.

Add Up Your Fixed Expenses

Once you have a clear idea of how much money you’ll have coming in, add up how much you’ll need to cover your expenses. Make a list of all mandatory expenses you’ll need to cover each month including rent or mortgage payments, utilities, car payments, insurance premiums, phone bills and minimum debt payments. If you anticipate being unable to cover one or more of these expenses, contact the service provider or creditor to find out if they offer any short-term assistance. Learn more about what to do if you can’t pay a bill.

Evaluate Your Spending Habits

After you’ve totaled your fixed expenses, you’ll need to take an honest look at your flexible spending. This is spending that you can reduce or cut altogether. Reference your budget worksheet and subtract your fixed expenses from your income. The money you have left over after paying your fixed expenses is the amount you have available for savings and flexible expenses.

Make a list of the non-essential items you spend money on from month to month. You may find it helpful to use a spending tracker worksheet. Review credit card statements and old receipts to figure out how much you typically spend on things like groceries, dining out, subscriptions and more, and look for places where you can cut back until you can find a new job. Remember, these spending cuts won’t necessarily last forever.

Stick to Your New Budget

Once you’ve finalized your budget, get serious about sticking to it. Reducing your spending habits after job loss can take discipline, but once you’ve made it through this period of hardship, your financial management skills will be better for it.

It can be tough to prepare for the unexpected, but there are ways to respond when your finances take a hit. For tips, tools and educational resources designed to help you regain control of your finances, visit Regions Next Step.


This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.