How do I create my Bare-Bones Budget? 4 questions you need to ask yourself.

What is a bare-bones budget?

A bare-bones budget means that you only budget for the necessities. The definition of necessity means that it is essential for your survival. This means only buying what you need to survive.

Creating a bare-bones budget requires a detailed breakdown of your weekly, monthly and annual expenses. 

When creating my bare-bones budget I literally had to take a ruler and a year’s worth of bank statements and going line by line to determine whether each expense was either fluff or a necessarity.

A bare-bones budget should only be for the short-term, typically 2-6 months, it can even last up to a year, but it can be longer depending on your self-control. Any longer than three years, then there is an indication that you need to reassess your budget for core problem areas such as, is it an income problem or are my debt repayment or expenses too high.

The benefits of a bare-bone budget are that it will help stem the problem and help tackle whatever financial problem you may have in the short-term.

The four questions that you need to ask when making a bare-bones budget are;

  1. How much do I need to spend money on my health?
  2. How much do I need to spend on the work/job that earns me money?
  3. How much do I need to spend on basic survival, Food, shelter and utilities etc
  4. How much do I need to spend on priority and non-priority debt repayment?

The questions are listed in order of importance.

Your health always comes first, this includes your mental health. You are your number one asset, without you being in a fit condition you would not be able to work to earn the necessary money to survive.

Work comes before the basic survival necessities because you need the money from your job in order to spend on the basics. 

Then comes basic necessities such as food, shelter etc and then comes debt repayment. 

In my blog posts Shaney’s debt reduction journey, I have adopted the bare-bones budget for the latter part of the year in order to reach my target to pay of my debt (excluding mortgages) by the end of the year. It’s nearing the end of the year and I am keen in reaching my goal.  I don’t know why, but it has become very important to me to reach the target.  You can read about my debt reduction journey by clicking the links.

Agree or disagree? Let us know what you think should be part of a bare-bones budget.

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