Bare Bones Budget

Bare Bones Budget

How to Make a Bare Bones Budget and Why You Need One!

When you are working toward some financial goals, the first step is always to create a budget and make a plan for your money. However, it is one thing to make a plan for your money and completely another to live with a bare bones budget.

What is a Bare Bones Budget

A bare bones budget is making a plan for your money, but only spending what you actually need to survive. You strip down your expenses to include only the most essential expenses for living.

It might sound crazy, or really hard, but it is actually a great tool to utilize when needed.

Why Use a Bare Bones Budget

You might be wondering why anyone would want to live on only the necessities. That doesn’t sound like it would be fun. Don’t these people want a life?!

And you would be right. Living on a bare bones budget does not allow for extras, including fun, etc. But there are some major benefits to knowing your bare bones budget and when to use it.

If you were to lose your job, a bare bones budget would help your family to get through until a new job can be found and a steady paycheck is coming in again.

If you are working on paying off debt, doing a bare bones budget can allow you to save up some extra money. This extra money can then be used towards making a bigger dent in the debt, than you would normally be able to do.

If you want to build up your emergency savings, using this budget method will help you save this emergency fund quickly–to be used for future needs.

Or if you have some other financial goal–down payment on a house, buying a car with cash, saving for a vacation, etc. These are all reasons you could utilize a very modest budget to gain traction towards that goal quickly.

How does a Bare Bones Budget Work

A bare bones budget takes your monthly expenses and limits them to just what is necessary to live for that month, or until the next paycheck.

It is similar to what Dave Ramsey calls the Four Walls of your finances, but with a little more wiggle room.

The essentials for life would include Rent/Mortgage (Shelter), Groceries (Food), Utilities (Water, Electric, Heat), Gas and Insurance for the car (Transportation) and Health Insurance.

Budget items such as eating out, fun, extra spending, shopping, entertainment, hair salons, etc would be eliminated while the bare bones budget is in effect. Everything that is not essential for living would not be included in the budget.

Dig down deep–what can you live without for a short amount of time, in order to get ahead in the long run?

Unless absolutely necessary, a bare bones budget is not meant to be used for an extended period of time. It is supposed to help you get through to the next paycheck or next month.

If you have an extended job loss, and need to use the bare bones budget for longer, doing so will help to prevent your savings from disappearing too quickly, and every other dollar you do have coming in, to stretch farther.

Example of Bare Bones Budget

Here is what our family’s bare bones budget would look like. To get this, I looked at what our necessary expenses were over the past month or two. Those numbers give us a good estimate on how much to plan to spend on utilities and things in the future. List your essential items and add up their costs.

example of a real bare bones budget

Again, this would not be easy. But it would be possible, especially for a short amount of time. ANd that is the point of the bare bones budget–to get you through a rough time, or to help make a big jump in some money goals.

Bare Bones Budget Tips

Meal Plan

One way to keep the grocery budget down is to plan your meals in advance. Also, use up what you already have in your fridge, freezer and pantry to keep the grocery expense down. Every little bit helps when you are doing this.

RELATED ARTICLE: Meal Planning for Beginners

RELATED ARTICLE: How much should you spend on food?

Find Free Activities

It is possible to have fun and not spend money. Look around your area for free activities that are going on. Or take advantage of parks, ride bikes, take a picnic to a park–make your own fun without spending money. Those will be some of the best memories you can make with your family.

Plan for the unexpected

Doesn’t is always happen that some unexpected expense pops up while you are trying to limit extra spending? Well, plan for that. Add a little buffer in your budget for an unplanned expense. Mine is “Misc Expense” on the chart above.

Frankly you should have a budget category like this in your regular budget. But it is even more important when you are trying to limit extra spending. And, if you don’t end up needing it, that is even more money you can add to your savings.

Stay positive

Remember the reason you are doing this bare bone budget month. It will be hard, and not much fun. But if you can remember your WHY–the big reason and goal behind the sacrifice, it will be easier and so worth it.

Final Thoughts on a Bare Bones Budget

A bare bones budget can be difficult to stick to. But, when you need it, it can really help your family to come out of a tough financial situation, in better shape than you otherwise would. It can also help to give a much needed jump to some financial goals you may have.

So, I challenge you to figure out what your family’s bare bones budget plan would be. It is a great tool to have in your financial tool box, ready to come out when it is needed, or wanted. Is there anything you would add to your bare bones budget? Let me know in the comments. 

Bare Bones Budget

How to create a bare bones budget and why you need one.