There are many ways to manage your money effectively. Alongside your monthly budget, you should also have a bare bones budget in place.

It’s good to be prepared to face a financial emergency even if you don’t have to do so right now. Prepare a low expense budget and have it ready in case of an emergency.

The following steps will guide you through the process.

What is a bare bones budget?

It’s a budget that covers all expenses. This means you will only spend what you need to cover your basic costs and meet the minimum financial obligations.

With a barebones budget, you do not leave any room for additional expense.

Is that sound restrictive? It is, and it isn’t a sustainable long-term budget either.

In normal circumstances, you should also leave some room in your luggage for things that you don’t necessarily need but that you want, such as vacations, nights out, and coffee.

However, this budget is only a stopgap measure for a six-month period of costly trouble.

Who needs a bare bones budget?

While this seems difficult, there are a number of different reasons why you may require to reduce your expenses.

When you experience income loss

Typically, people turn to a tight budget when they need to reduce their cost of living due to a lack of revenue.

This is why it is important to have an emergency fund. Spending as little as possible now may be vital if you lose earnings, but having an emergency fund can act as a buffer when you’re in a money tight situation.

When you want to save a lot of money fast

In any event, you can also choose to save every penny you have earned if you don’t need to spend any of it on medical care costs.

Doing so for just a few months can save you a lot of money and help you quickly build up a large nest egg.

When you want to be prepared

Even if you’re unwilling to make any big sacrifices, it’s wise to establish a bare bones budget.

If you make a stash of items beforehand, you can be ready to make purchases more quickly in case of an emergency.

How to create a bare bones budget

Only three simple steps are needed to get started.

1. Make a list of your necessities

Begin by printing out your monthly bank statements and credit card statements from the last month. This gives you a good idea of your current spending-which might be different from what you thought.

According to a Mint survey, 65% of Americans do not know how much they spend each month. Stay vigilant! Carefully examine your invoice and make sure to highlight only the significant costs.

2. Make a list of what you need to cut

Next, examine everything in your statements that is not being highlighted in your costs. Cut costs to the bone.

In addition, be sure to pay attention to any miscellaneous costs that are deducted automatically from your account or charged to your credit card and cancel them.

3. Use a budgeting tool to stay on track

Then, utilize a budgeting tool to chart your budget. Arranging your spending and managing your money will keep you responsible and on budget.

It’s also a good idea to set a timeframe for yourself when to use a bare-bones budget. After this money runs out, you’ll have to reconsider your budgeting.

Key considerations for a bare bones budget

Everybody’s finances will appear different because cutting expenses to the bone looks different for everyone.

Of course, there are some basic rules of thumb to follow. These costs are non-negotiable.



Minimize your utility bills by attempting to avoid using utilities as much as possible.


In particular, this is a difficult task to narrow down. But when you’re attempting to save money, it’s best to prioritize important groceries.

According to the American Journal of Agricultural Economics, the average American household wastes $1,866 worth of food each year. That’s a lot of wasted food and a lot of money wasted.

Create A Bare Bones Budget
Create A Bare Bones Budget

Meal prepping can help you save money as you limit food waste. In addition, don’t forget to check what coupons are available at your local grocery store to save money.


Debt repayments

Don’t forget to make debt payments a part of your bare-bones budget!

While it may seem to be something you can skip, failure to do so will only increase your pile of debt with interest. In addition, making debt payments is an excellent way to preserve a good credit score during a stressful financial situation.

When you are trying to save money, only allocate the bare minimum monthly payments to essential expenses. However, if you are trying to pay off large amounts of debt, you can instead invest the extra money you saved from lower expenditures on enlarging your mortgage or student loan payment.



Health care


Obtaining insurance is incredibly important, even on a bare bones budget. Call your insurance companies to see if they have any discounts for which you qualify.

Retirement contributions

Your long-term savings plan could be impacted by your budget particularly if you are cutting back expenses to the bone.

You may be able to hold off on additional contributions to your retirement account for the time being, depending on your circumstances. If you would like to make further contributions in the future, you may do so during this period.

…but if your work provides matching in a 401k for example, you should contribute at least as much as your employer will match.

If you don’t have a job and you have been contributing to your own traditional or Roth IRA outside of work, you can temporarily suspend making contributions to your retirement fund.

That’s fine as long as you stick to your retirement plan and don’t dip into your savings fund.

Family expenses

Personal care

Pet care

Bare bones budget example

Here is a budget that includes only the necessities based on a monthly income example of $3,500. It matches the criteria listed above.

This total costs $3500.00. You can change the budget numbers to fit your particular circumstances. If you find you have more money remaining, do not spend it. Save instead, pay off debts, or contribute to retirement, depending on your circumstances.

What you shouldn’t spend on

You know what’s essential, but here is how to avoid tacking onto your costs.

Sticking to your budget and splurging

If you need to save cash and are in dire straits, then you should stop all unnecessary spending.

However, if your budget is extremely limited and you’re trying to get out of debt or save up for a big financial goal (e.g., a down payment on a house or a wedding), then setting aside a little money each month can actually pay off.

Allowing yourself one splurge each month (such as a meal out or a spa day) can provide you with some reprieve from strict diet restrictions.

Prepare now—don’t wait for an emergency to create a bare bones budget

Even if you have a bare-bones budget now, having a budget prepared enables you to avoid the stress of having to make sudden cutbacks. If you’re ever in a sticky financial situation, having a bare-bones budget saves you from worrying over making a quick change in your lifestyle.

Having a good budget is the best way to achieve financial independence (regardless of your current financial situation). There are also many other useful ways to spend less money on expenses.


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