How To Create A Bare Bones Budget

There are many different ways to come up with your perfect budgeting strategy. Alongside your monthly budget, you should also have a bare bones budget waiting in the wings. Even if you don’t need to cut back completely right now, it’s a good idea to know how to create a minimal-expense budget and have it ready so you are prepared in case of a financial emergency.

Bare bones budget

What is a bare bones budget?

It’s a budget that only covers the necessities. Meaning you will only spend enough money to survive with the basic essentials and fulfill your minimum financial obligations.

With a bare bones budget, you do not leave any room for extra spending.

Sound restrictive? It definitely is. That’s why this is not a plan for better budgeting in the long-term.

In normal conditions, you should also leave space for you to buy things you don’t necessarily need but that you want—like vacations, nights out, and lattes. (That’s right—treating yourself to lattes will not lead to financial ruin.)

On the other hand, this budget is a short-term solution to help you get through a period of financial distress.

Who needs a bare bones budget?

Covering only the bare expenses will help you to significantly decrease your outgoings. While it may seem dire, there are a lot of different reasons why you may need to cut back. 

When you experience income loss

Most often, people turn to a restrictive budget when they need to curb spending because they are experiencing some loss of income. During these periods, you may only have the cash to pay for the essentials. For example, when:

This is why it’s so essential to have an emergency fund. While cutting back is likely necessary when you lose income, having an emergency fund as a cushion will really help take the pressure off when you’re in a money-tight situation.

When you want to save a lot of money fast

That said, there are also times when you may want to switch to a bare bones budget even when you haven’t lost any income. For example, when:

Swapping your regular budget for a minimal one for a few months can definitely help you slash expenses so you can save up a big chunk of money fast.

When you want to be prepared

Even if you’re not ready to cut back completely, it’s still a good idea to create a bare bones budget.

If you create one before you need it (hopefully, you won’t ever need it!), then you’ll be ready to cut your spending right away in the event of a financial emergency.

How to create a bare bones budget

There are only 3 steps needed to get started. Check out this simple list to help you create a budget without excess.

1. Make a list of your necessities

First, start by printing out all your bank statements and credit card statements from the last month. Doing so gives you a look at your current spending—which may be a lot different than you think.

According to Nerd Wallet, 83% of Americans think they overspend. Be diligent! Look carefully and use a highlighter to identify only the essential expenses.

2. Make a list of what you need to cut

Next, see everything else in your statements that isn’t highlighted? That’s what you need to cut back. Yup, it’s about only covering the basics—nothing more.

In addition, take note of any non-essential expenses that are automatically deducted from your account or charged to your credit card—and cancel them.

3. Use a budgeting tool to stay on track

Finally, use a budgeting tool to document your new budget. Having everything organized and written down will help you stay accountable and stick to your budget. You can use a budget planning notebook or an app if you prefer.

Also, it’s a great idea to give yourself a timeframe for how long you expect to use this type of budget. Remember, a bare bones budget is simply a temporary measure; once you’re out of your money-tight situation, you’ll have to reevaluate your spending.

Key considerations

Everyone’s budget will look different because cutting down on spending looks a little different for everyone.

Of course, there are some general rules of thumb to follow. The following payments are usually necessary costs. They are non-negotiable.


  • Mortgage/rent
  • Property taxes
  • Homeowners association fees


To shrink your monthly bills, try to reduce your use of utilities as much as possible.


Particularly, this is a hard one to whittle down. But when you’re lowering expenses, you need to remind yourself to only spend money on essential groceries.

Believe it or not, according to Recycle Track Systems, the U.S. throws away almost 60 million tons of food a year. That’s a lot of waste—and a lot of lost money!

Fortunately, learning about budget meal planning can go a long way in helping you stick to a tight food budget so you can avoid waste. On top of that, remember to check out what coupons are available at your local grocery store to save more money.


  • Car payment
  • Gas
  • Parking
  • Public transportation

Debt repayments

Don’t forget to include your debt reduction strategy and repayments in your bare bones budget!

While it may seem like this is something you can skip, doing so will just make your pile of debt grow with increasing interest. Plus, continuing to make debt payments will help you maintain a good credit score even during a money-tight situation.

When you’re trying to lower expenses, just focus on the minimum monthly payments. But if you’re adopting a bare bones budget to save money to pay off your credit card debt faster, then you can reallocate the money you save from other expenses to make bigger debt payments.


  • Reduce your phone plan to the cheapest plan possible


  • Same thing here—reduce your internet plan to the cheapest plan possible


  • Medications
  • Co-pays for appointments
  • Over-the-counter treatments


  • Health
  • Auto
  • Life/disability
  • Renter’s

Certainly, insurance is something you want to keep—even when you have to switch to a bare bones budget. To help you start cutting back, try calling your insurance providers to see if they have any discounts you can use.

Retirement contributions

Your long-term retirement savings might be impacted by your budget, especially when you are trying to lessen your expenses.

If you still have a job

If you are employed, keep on making contributions to your retirement account. You may prefer to hold off on extra contributions to your retirement account for now, depending on your situation.

But if your employer offers matching in a 401k, for example, then keep contributing at least as much as your employer will match.

If you lost your job

If you don’t have a job and you’ve been contributing to your own traditional or Roth IRA outside of your employer, then you may decide to stop making contributions to your retirement account for now.

That’s okay for a few months—above all, you want to avoid dipping into your retirement savings to cover expenses.

Family expenses

  • Daycare
  • School tuition
  • Alimony
  • Child support

Personal care

  • Toiletries
  • Work clothes
  • Haircuts as needed for work

Pet care

  • Pet food
  • Medications
  • Vet bills

Expert tip: Consider minimalism to cut down on your budget

Minimalist spending means cutting back on all the expenses you don’t need to cover. Yet, so few of us actually practice this.

When you are sticking to a strict budget, embrace the opportunity to appreciate the value of things rather than merely the cost. Focus your attention on doing things that add true value to your life rather than being expensive.

That may be reading a good book, spending quality time with a loved one, pursuing your creative passions, or even working on your business. 

Bare bones budget example

Here’s an example of a budget that has only the essentials based on a monthly income example of $3,500. It goes along with the categories discussed above.

Mortgage or rent$1,000
Utility bills$250
Car or transportation$200
Emergency savings$200
Family expenses$500
Personal care$100
Pet expenses$200

The example totals $3,500. You can adjust the expense numbers to fit your personal situation. If you find that you have extra money left, don’t spend it. Save instead, pay off debt, or contribute to retirement, depending on your circumstances.

What you shouldn’t spend on

Now you know what’s essential, but here’s what to avoid adding to your expenses.

  • TV
  • Streaming subscriptions or cable alternatives
  • Music subscriptions
  • Any other unnecessary memberships or subscriptions (e.g., magazines, newspapers, gym, etc.)
  • New clothing
  • Non-essential travel
  • Non-essential personal care products (e.g., cosmetics, manicures, etc.)
  • Restaurants and bars

Sticking to your budget and splurging

If you’re truly in crisis mode and can only cover the bare expenses, then you’ll need to halt all unnecessary spending.

However, if you’re using a bare bones budget to get out of debt or save for a big financial goal (e.g., a down payment on a house or a wedding), then making room for a monthly splurge can actually be a good idea.

Leaving room for treating yourself to one monthly splurge (like a dinner out or a manicure) can give you a tiny bit of relief from the strict rules you’re following.

How do you successfully stick to a bare bones budget?

To stick to a bare bones budget, first work out what your necessary costs are and ensure you can cover them. All other spending (such as luxuries, entertainment, and non-essentials) will need to go on hold.

Sticking to a bare bones budget can be tough but it is very possible to do with intention and focus. If you are struggling to stop spending, here are some tips that you can try for yourself: 

Keep track of your spending

Do you know where your money is going? If the answer is no, you need to start tracking your spending.

A great way to do this is by leveraging a spending journal where you write down what you spend and then review it at the end of each day. There are also plenty of budget templates and tools you can use to do this.

Remove any obvious temptations

Whether it’s your friends asking you to go on a night out or “window shopping” at the mall, you may be tempted to overspend. Removing these temptations will help you stay on track.

Use cash, not your credit cards

If you usually spend money using credit or debit cards, now is the time to stop. By using cash, you can see exactly where your money is going in real time.

What do bare expenses mean?

Your bare expenses are the payments that you need to make in order to live. They include essentials, such as your housing costs (rent or mortgage), food, medicines and your core utilities like water, electricity and internet.

When you are trying to cut back on spending, these are the costs that are unavoidable, so you need to continue to pay them. 

If you liked learning about how to budget without excess, check out these posts about budgeting next!

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

Even if you don’t need a bare bones budget right now, having one outlined and at the ready is always a good idea. That way, if you’re ever in a money-tight situation, you can relieve a bit of the stress by being prepared to cut expenses fast.

Above all, having a good budget (and sticking to it!) is the key to financial wellness—no matter your current financial situation. You can also discover other creative ways to cut back on your budget!

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top