How to create a bare-bones budget

gboyinwa ajomale

November 30, 2017 4:33 PM

Here are ways to create a bare-bones budget.

A bare-bones budget is a budget created to cut your expenses to the barest minimum meant to help you reach your financial goals.

Only focusing on the essentials of living, leaving out all the non-essentials.

People create bare-bones budget when they are financially strapped. This helps them survive, only sustaining you with the basic financial needs without the extras and helping you get back on track financially.

It is more of a drastic measure to bounce back financially.

Here are ways to create a bare-bones budget.

1. List out all your current expenses

The first thing to do when creating a bare-bones budget is to list out all your current expenses, from the highest to the lowest.

Create a list of all the things you spend money on monthly. This is the first step.

2. Tick the essential expenses

After listing out all the things you spend money on then tick the essential expenses. Essential expenses are the things you spend money on that you can't do without.

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The essential expenses to include in a bare-bones budget should include housing, personal care, food, transportation, utility bills, essential family expenses.

3. Remove all non-essential expenses

You don't only tick the essentials and move on, you also need to cross out all the non-essential expenses. These are the ones that are not really necessary.

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The non-essentials expenses are the entertainment expenses, eating out at restaurants, vacations and other unnecessary expenses. They should be excluded when creating a bare-bones budget.

4. Take your list to your bare-bones budget sheet

After knowing the important expenses which the essentials and unnecessary expenses which are the non-essentials, you can now transfer your list into a bare-bones budget sheet.

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Arrange your list on the sheet according to your preference.

5. Calculate the expenses

Once you are done transferring all the essential expenses into your budget bare-bones sheet, you can sum up all the expenses.

The sum of your expense is the amount you will need to survive on with a bare-bones budget.

To make your bare-bones budget work perfectly, be honest about your list of expenses and also follow through with it to get back on track financially.

gboyinwa ajomale