How to Create a Bare Bones Budget: The Basics

Sometimes, no matter what you do, it feels as though you can’t get control over your finances.

If you’re earning too little, and your bills are progressively becoming more expensive, then you could be spiraling into a situation that’s sure to make anyone lose sleep. When things are drastic, a simple budgeting strategy like the envelope method might not be enough to make a significant change.

If you need to do something drastic with your cash, you could try switching to a bare-bones budget – at least for a little while. This will give you an honest insight into what you spend when you’re only paying for the essentials.

Once you’re used to your bare-bones budget, you can begin to build in other expenses gradually, keeping an eye on where you need to keep your spending under control.

Before You Create a Bare Bones Budget

Keep in mind that a bare-bones budget isn’t intended for the long-term. If you rely on spending only tiny amounts of cash forever, the chances are you’ll end up falling off the wagon or becoming overly frustrated with your situation.

No-one likes feeling as though they can’t afford to have any fun in their lives. If you can’t see a future where you can get out of using your bare-bones budget every month, then you might need to look into acquiring a second form of income. Alternatively, you can try reducing your expenses in big areas, like moving to a smaller house or giving up your car.

Look at your bare-bones budget as a way of getting a better understanding of how you spend your cash, and where your habits need to change.

Creating your Basic Budget

It’s usually a lot easier to create a bare-bones budget than any other kind of spending plan. After all, you’re only accounting for the things that you have to buy.

To begin with, itemise all of your current expenses, including your mortgage, your daily cup of coffee, and your Netflix account. Once you’ve got a list of absolutely everything, including your irregular expenses, like a TV license or car tax, remove anything that isn’t essential. This includes cable TV, gym memberships, dining out, and even trips to the cinema.

The toughest part of designing a bare-bones budget is figuring out the difference between the things you want and the things you need. Just because you’d feel more comfortable getting a hair cut every month doesn’t mean you can’t go without grooming sessions for a little longer. It’s important to be strict with yourself when making your budgeting decisions.

Know What You Need to Pay For

Once you’ve removed all of the non-essential expenses from your budget, you’ll have the foundations of your bare-bones worksheet. The kind of things you have to pay for each month will depend on your lifestyle. However, some of the most common non-negotiable expenses include:

  • – Home costs like rent, mortgages, taxes, insurance, and repairs.
  • – Utilities like electric, water, gas, and broadband
  • – Transportation like car payments, insurance, petrol/gas, repairs and maintenance
  • – Insurance for your home, life insurance, and pet insurance
  • – Essential food expenses (only what you need!)
  • – Debt repayments
  • – Family expenses like child support, day care, and school tuition
  • – Personal care like toiletries, prescription medications (unless you get them on the NHS) and clothing
  • – Pet care costs like food and vet treatments

Remember, for expenses in the personal care column; it’s important to cut your costs as much as possible. Avoid buying branded products if you can, and make sure that you’re only purchasing clothing when you need it – not just because you feel like updating your style.

With your necessary costs laid out, you’ll know exactly how much you need to earn each month to live. Anything you earn beyond that is what you can put towards your savings, and your preferred luxury items.

Understanding your Bare Bones Budget

One important thing to remember about a bare-bones budget is that it’s useful to build in a small amount of money that you can use for unexpected emergencies. Remember that costs you didn’t plan for can often rise out of nowhere, and you still need an emergency fund.

If you’re left with no money at all after you’ve paid for your essential expenses, then this is evidence that you’re living beyond your means. Think about where you can reduce costs significantly, and whether you need to look into a second source of income or a better job. is NOT a direct lender and our loan-matching service is free to use. We don't charge a fee, but there might be a charge from some lenders within our network. Emu is a trading style of Ready Money Capital Ltd. does not make lending or credit decisions, we are not a lender - as a broker we match customer's loan applications with lenders in our database depending on the information provided. Ready Money Capital Ltd is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference number 802557. Licensed by the Information Commissioners Office (registration number ZA441875).

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