How To Create a Bare Bones Budget

In this post, we are going to discuss how to create a bare-bones budget. Before we do this I think it is proper to discuss what a bare-bones budget. A bare-bones budget is a budget that focuses on essentials.

By essentials, I am talking about expenses that you cannot do without. These include food, rent, transportation, etc.

This is a budget that suits people who have lost jobs or any source of revenue and are now struggling for cash. It is these people that should seriously consider a bare bones budget.

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how to create a bare bones budget

What Does A Bare Budget Include

As already pointed in a previous paragraph here are some items that are included in the bare bones budget with some explanation.


By food, I am talking of basic food items that you can cook at home and not some expensive exotic foods. When one is in financial distress he does not need some expensive foods.


Whether you are in financial distress or doing well, we all need a roof over our heads. I am, however, not talking of a mansion here.

If you have a mansion and are struggling financially, it is time to consider moving to reasonably priced accommodation. An accommodation that matches your income.

Another way you can solve your rent headache if for some reason you cannot move to a smaller house is to just rent out any excess space.


Even in a situation where you have lost a job, transportation is still essential. You need it to find another job. However, we are not including travel by taxi as essential.

If you are struggling financially, a taxi could be a luxury depending on your situation. I have seen cases where traveling by taxi might be cheaper than boarding a bus.


How To Create a Bare Bones Budget

Utilities are perhaps an essential that leaves little room for maneuver. We all need water, electricity in our modern life.


If you have a car can then you definitely need gas as an essential item. However, a bare bones budget will only include gas for essential travel only such as going to work.

It will exclude gas for non essential travel like going to the beach etc.

Loan repayments

Loan repayments are another unavoidable expense. Otherwise, you could be in deeper problems as interest accumulates.

However, in a bare bones budget, you will only include the minimum loan repayments. This is because you are now cash strapped and cannot afford to pay more than you need to.

Phone expenses

In the case of phone expenses, you may have to go for only a basic landline. It is time to back to the past when we only had landlines.

To be honest we lived through that time without any problems whatsoever. So it is possible to live without a mobile phone.

Child Expenses

There are some children’s expenses that you cannot avoid. I have therefore included them in the bare bones budget.

They include expenses such as school tuition, daycare expenses. If however, it is possible to avoid these then we cannot consider them as something to include in a bare bones budget.

Insurance Payments

Insurance premiums are also something that can be included in essentials and therefore included in a bare bones budget. These include health, property, life insurances.

Work Clothes

As for clothes, the one that you can consider essential are work clothes or clothes you use when looking for work. Any other clothes should be considered non-essentials.


Another essential item that needs to be included in a bare bones budget is medication unless it is cosmetic. Otherwise, medication for some illness is most definitely an essential item.

What Not To Include In A Bare Bones Budget

Below are some items that need to be removed from a bare bones budget. Remember this budget is done when someone is in financial problems. The purpose is to control expenses so that on can stretch his money during a crisis.

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Cable Television

Cable television is perhaps the one item that you can do without in times of financial hardships. I would, therefore, expect anyone preparing a bare bones budget to exclude cable television especially given the fact that there are alternatives to cable TV..

In doing this one needs to consider early cancellation costs that may be incurred if you cancel the contract before its time. In most jurisdictions, these penalties are nothing compared to the expenses you will include by continuing a subscription.


During the preparation of a bare-bones budget, this is another item that should be taken out of the budget. There are subscriptions like a gym membership that we mostly do not really need.

One can replace these with cycling or walking and still get the same health benefits.

As I said in a previous post some of us have magazine subscriptions for magazines that we rarely read anyway. So all such subscriptions need to go.


Nowadays it is almost a must for families to go on vacation every year. This is a luxury that anyone in financial problems cannot afford.

It is therefore removed in any bare bones budget.

Related: What Is Zero-Based Budgeting

Eating Out

During a financial crisis, the last thing you can do is go out to dinner or lunch. Eating out is a luxury that should not be included on a bare bones budget.

In such a situation one should focus on home-cooked food. Even when it comes to work lunch one should prepare a packed lunch.

By preparing lunch at home you will discover that you will save a lot of money that can help you out during such a crisis.


Movies are also obviously non-essentials and should therefore not be included in a bare bones budget. As a solution, one can borrow DVDs from friends if he wants to watch a movie

One can also watch free movies on television. I have come across some of the most recent movies being shown on free to air television stations.

You will therefore not be shortchanged when it comes to watching movies.