Bare Bones Budget: Why You Need it & How to Create One!

Though no one wishes for it, sometimes life throws you into a financial corner when you can’t afford the luxuries you’ve been enjoying. In such a case, you must focus on absolute necessities, and that’s where a Bare Bones Budget or BBB comes in.

A Bare Bones Budget is handy when facing a difficult financial period, such as a job loss, a pay cut, or any other. In addition to that, you may want to create a BBB for other reasons, such as emergency preparedness or to accelerate your savings goals.

I’ll explain all those reasons and many others so you can understand why a Bare Bones Budget may be an option for you. It’s worth noting, nonetheless, that as much as a BBB can help you weather a difficult financial time, it’s not sustainable for the long term. You can only see it as a temporary fix as you try to recover financially.    

Here’s what you can expect to learn about a BBB:

  • What’s a Bare Bones Budget?
  • When do you use a BBB?
  • Is a BB sustainable?
  • How do you create a BBB?

Let’s dive in!

bare bones budget

What Is a Bare Bones Budget?

A Bare Bones Budget is a type of Budget that only focuses on absolute necessities as you try to get through a financially difficult time. The problematic financial time could be due to a pay cut, a job loss, or other reasons.

Speaking of absolute necessities, a BBB focuses on necessary expenses like housing (mortgage and rent), groceries, utility bills, and medical care. During Bare Bones Budgeting, you can’t afford dine-outs, paying for cable TV, a vacation, or any other frivolous expense.

When Do You Use a Bare Bones Budget?

A Bare Bones Budget comes in handy in several situations, which include the following:

1. When dealing with an income loss

You can create a BBB when your family suffers income loss. That includes when you suffer a pay cut or job loss or when one household member loses their income source.

During such a time, you’ve got to tighten your spending Budget until you can find your financial footing again, and a BBB can help. It lets your family focus on the most critical expenses and avoid unnecessary spending.

2. When you have an ambitious financial goal that you want to accelerate

Sometimes, you want to save up faster and hit the numbers quicker to attain a specific financial goal sooner. If that’s the case, Bare Bones Budgeting may help. The financial goal in question could be any of the following:

  • Get out of debt
  • Build up an emergency fund
  • Save up for a considerable expense or purchase

In the first case, Bare Bones Budgeting can help you accelerate the loan repayment process as you cut down on unnecessary spending and set more money aside to pay your debt.

In the second case, the more money you spare and save, the more quickly you can fund your emergency fund. However, having an emergency fund during hard financial times is essential. With it, you can weather a difficult economic time, such as a job loss, making it easy to create and stick to a BBB. 

As for the last case, Bare Bones Budgeting can help you quickly save up for a mega expense or purchase that you ordinarily would struggle or take too long to save for. That includes saving up for college fees and raising capital for a business.

3. During emergency preparedness

You don’t have to go through a difficult financial period to set up a Bare Bones Budget. You can do it in preparation for such a time. In essence, a BB can help you prepare for a crisis beforehand and know how to cope if it happens.

Overall, this builds your confidence as you know what to focus on when you have a limited Budget and what to forego to make ends meet – albeit for a short while.

What is a bare bones budget

4. When switching career paths or jobs

Sometimes, it is not easy to move to a different career or job you are passionate about, but it isn’t lucrative. Others take time before you can learn to survive on the paycheck. In such a case, a BBB can help you fit in quickly.

5. When your expenditure is out of control

Bare Bones Budgeting can also help when you want to hit ‘reset’ on your spending. It could be that your expenses are out of control, and you can’t account for anything. With a BBB, you can stop overspending immediately and track all your expenses. More importantly, you get to save almost immediately.

Is a Bare Bones Budget Sustainable?

As good as Bare Bones Budgets are in getting you over the line when facing a difficult financial time, they aren’t sustainable. We don’t recommend Bare Bones Budgeting for the long term, but it is only a short-term fix as you try to find your financial footing.

If you want a more sustainable budgeting method, consider Zero-Based Budgeting, where you assign a job to every cent you make. You can easily account for every dime you make.

How to Create a Bare Bones Budget

Now that you know what a Bare Bones Budget is and why you can use it, here’s how to create one:

Step 1 – List Your ‘Absolute Necessities’

Start by listing down your household’s needs. These are the absolute necessities – expenses you must incur as they are necessary for your survival.

Below is a table showing what to include (absolute necessities) and what not to include (luxuries):

Absolute Necessities (Must Include)Luxuries (Don’t Include)
Housing (house rent or mortgage), groceries, essential personal care items, utilities (electricity, gas, and water), insurance, transport, medical care, pet care(pet food and medication), childcare, and debt repaymentDine-outs, vacations, streaming services, gym memberships, entertainment, new clothes, unnecessary personal care (beauty treatment and Spa), among other luxuries

Step 2 – List the ‘Expenses You Can Cut Down On’

Given that you already know your ‘absolute necessities,’ you can determine how to reduce the costs where possible. Here are some tips to help you do just that:

a) Housing

You’ve got to include your housing cost (rent or mortgage) in your Budget even if you are struggling financially. After all, you need a roof over your head. There are, however, a few things you can do to bring down the cost where applicable.

For instance, you can consider downsizing (moving to a smaller home) if the home is a rental and the lease agreement isn’t nearing its end. If it is, then you may have to stay put.

Sometimes, you don’t have to move to a smaller home to cut down on the housing cost, but to move to a different location, perhaps out of town. That’s if your job and source of livelihood is not dependent on your current location.

b) Groceries

You’ve to eat just as you need a roof over your head. However, there are a few things you can do to bring down the cost of your groceries, and that includes the following:

  • Avoid eating out and instead cook at home
  • Shop for cheaper but healthy ingredients
  • Buy in bulk where applicable and take advantage of shopping discounts
  • Switch to cheaper brands or cheaper grocery stores
  • Shop with a grocery shopping list
When do you use a bare bones budget

c) Personal Care Essentials

Personal care items like toothpaste, toothbrushes, tissues, soaps, and moisturizers are essential. Life can be difficult without them. However, there are others you can do without for some time, such as electric toothbrushes, expensive hair products, expensive cologne and deodorants, serums, and body scrubbers. So, consider that!

d) Utilities

Utilities such as electricity, water, and gas are essential, and you must include the bills in your Budget. However, you can do a few things to bring the costs down.


You can lower your electricity bill using these tips:

  • Switch to LED lighting
  • Use energy-efficient appliances
  • Switch to a cheaper energy provider
  • Use cold water to do your laundry and dishes
  • Switch off the lights when not in use
  • Invest in a smart thermostat to automatically turn off power when not in use
  • Only keep the essential appliances
  • Beware of vampire electronics such as cable boxes, TVs, chargers, and computers (don’t leave them plugged in as they still consume power)

Use these tips to lower your gas bill:

  • Invest in a thermostat to automatically turn off the gas when not in use
  • Insulate your home, especially the windows, to avoid heat loss
  • Maintain your home furnace
  • Lower the heater temperature
  • Switch to a cheaper gas supplier
  • Dress warmly during the cold season to avoid over-reliance on the heater
  • Invest in insulated windows or thermal curtains

Save on water costs using these tips:

  • Harvest and use rainwater
  • Opt for low-flow toilets
  • Invest in low-flush shower heads
  • Turn off the faucet when not in use
  • Seal any water leaks

e) Insurance

House, medical, auto, and life insurance are worth considering. While they may seem like a huge burden, you should reflect them in your Budget. What you can do, however, is try shopping around for cheaper insurance, and if you can’t find any, find ways to get discounts from your current providers.

how to create a bare bones budget

f) Transport

If you can, downsize your car. Get a smaller car or sell one if you have two. You can also opt to use public transport or bike to work. It also doesn’t hurt to walk over short distances. It’s good exercise, after all.

g) Medical Care

You can’t do much about medical care to bring the Budget down. Perhaps you shouldn’t overlook making sure you pay your medical insurance in time and observe a healthy routine (dieting and exercising).

h) Pet Care

You can give it out or sell it unless you need to keep the pet. You can also decide to stay with only one pet, which will ease your Budget. Also, don’t forget to shop for cheaper, healthy pet food.

i) Childcare

Here, you have to consider costs, which include babysitting (for younger kids), alimony where applicable, and child food and upkeep. Depending on your situation, try finding ways to bring down the cost without upsetting the child.

j) Debt Repayment

You must pay your debt despite going through a rough financial patch. Most creditors won’t understand, especially if you don’t explain it to them in advance. So, ensure you Budget for the monthly minimums to pay your debt promptly.

If you can’t do it, try contacting your creditors to explain why you can’t promptly comply with the payments and assure them you are working hard to overcome the financial huddle.

Step 3 – Create the Budget

Lastly, go ahead and create the Budget. You can use a budgeting tool like YNAB or just a piece of paper. Here’s a Bare Bones Budget example you can copy:

ItemMonthly Cost
Personal Care Essentials$100
Medical Care$200
Pet Care$100
Deb Repayment$250

Assuming your regular monthly household expenses amount to $6,000. You’ll now have saved $2,650, which can go a long way in accelerating your financial goal.

Concluding Thought:

There’s no doubt that a Bare Bones Budget can be a good option when going through a difficult financial patch, when you want to accelerate an ambitious financial goal, during emergency preparedness, when switching jobs, and when your expenses are out of control.

 But as I mentioned, it’s only a temporary fix. It’s not sustainable in the long term. If you want a more sustainable budgeting solution, consider the Zero Based Budget as it ensures you can always account for your money.

Written by Alex

Written by Alex

I have passion in helping people Make, Manage, Multiply & Protect Wealth.Download my Free Guide to Financial Freedom >>[ GET IT HERE]<<