There are many ways to come up with your perfect budgeting strategy. In addition to your monthly budget, you will need to wait for a bare bone budget with your wings. Even if you don’t need to cut completely right now, we recommend you know how to create a minimal budget and be prepared in case of a financial emergency.
What is the budget for naked bones?
A budget covers only essentials. This means you just have to spend enough money to survive on basic necessities and fulfill your minimum financial obligations.
With a bare bone budget, you don’t leave room for extra spending.
Sound limit? That’s definitely. That’s why this isn’t a better budgeting plan in the long run.
Under normal conditions you will need to leave space to buy things you don’t necessarily need, but on holidays, evenings, lattes, etc. (Yes – treating yourself with a latte does not lead to financial ruin.)
Meanwhile, this budget is a short-term solution that will help you survive periods of financial difficulties.
Who needs a budget for naked bones?
Covering only bare costs will help you significantly reduce your exit. It may seem miserable, but there are many different reasons you may need to cut back.
When you experience a loss of income
Most of the time, people are experiencing some income loss and turn to restrictive budgets when they need to curb spending. During these periods, you may only have cash to pay for your essentials. For example, when:
This is why having emergency funds is so essential. It’s likely that you’ll need to cut back when you lose your income, but having emergency funds as a cushion can help you take away the pressure when your money is in a stiff situation.
When you want to save a lot of money quickly
That said, even if you haven’t lost your income, you may want to switch to a bare bone budget. For example, when:
Exchangeing your regular budget for a minimum for a few months will definitely help you cut down on your costs, which will save you a lot of money quickly.
When you want to prepare
Even if you’re not ready to cut it all down, creating a bare bone budget is still a good idea.
If you create it before you need it (hopefully you won’t need it!), you are ready to cut your spending immediately in the event of a financial emergency.
How to create a budget for bare bones
There are only three steps required to get started. Check out this simple list to help you create a budget without exceeding it.
1. Create a list of essentials
Starting with this, starting last month, I will start by printing out all my bank statements and credit card statements. In doing so, let’s take a look at your current spending.
According to Nerd Wallet, 83% of Americans think they spend too much. Be diligent! Take a close look and use highlighters to identify only essential costs.
2. Create a list of what you need to cut
Next, look at everything else in the unemphasized statement. That’s what you need to cut back. Yes, it only covers the basics and nothing more.
Additionally, please be aware of non-essential costs that will automatically be deducted from your account or charged to your credit card, and cancel them.
3. Use budgeting tools to keep going smoothly
Finally, use the budgeting tool to document your new budget. Organizing and writing everything down can help you stay accountable and stick to your budget. You can use the budget planning notebook or app if you wish.
Also, giving yourself time to spend this type of budget is a great idea. Remember that the budget for bare bones is simply a temporary measure. If your money goes out of a hard situation, you need to reassess your spending.
Important considerations
Reducing spending looks a little different to everyone, so everyone seems different.
Of course, there are some general rules of thumb to follow. The next payment is usually the cost required. They cannot be negotiated.
housing
- Mortgage/Rent
- Fixed Asset Tax
- Homeowners Association Fees
Utilities
To reduce your monthly invoice, try to use the utility as little as possible.
food
This is especially difficult to whip. But when you lower your costs, you need to remind yourself that you only spend money on essential groceries.
Believe it or not, the US throws out about 60 million tonnes of food a year, according to the recycle truck system. It’s a lot of waste and a lot of lost money!
Luckily, learning about budget dietary planning can go a long way in helping you stick to a strict food budget so that you can avoid waste. Plus, save more money by checking out coupons available at local grocery stores.
Transportation
- Car payment
- gas
- parking
- public transport
Debt repayment
Don’t forget to include your debt reduction strategy and repayment in your bare bone budget!
This may seem like something you can skip, but doing so will only increase your debt pile and increase interest and grow. Additionally, continuing to pay your debt can help you maintain a good credit score even in financial situations.
If you are trying to cut costs, focus on your minimum monthly payments. However, if you are adopting a bare bone budget to save money to pay off your credit card debt faster, you can reassign money to save from other expenses and pay for larger debts.
phone
- Reduce your mobile phone plan to the cheapest possible plan
internet
- The same thing here – exclude your internet plan as the cheapest possible plan
health care
- medicine
- Joint payment for booking
- Over-the-store treatment
insurance
- health
- Automatic
- Life/Disability
- Renter
Certainly, insurance is something you want to keep up – even when you need to switch to a bare bone budget. To start cutting, call your insurance company to see if there are any discounts available.
Contributions to retirement
Your long-term retirement savings may be affected by your budget, especially if you are trying to cut your costs.
If you still have work
If you are employed, continue to contribute to your retirement account. Depending on your situation, you may prefer to refrain from any additional contributions to your retirement account for now.
However, if an employer offers matching, for example, 401K, it will at least continue to contribute as much as the employer matches.
If you lose your job
If you don’t have a job and are contributing to your traditional or Ross IRA outside of your employer, you may decide to stop contributing to your current retirement account.
That’s fine for a few months. See everything. I want to avoid immersing myself in my retirement savings and covering my expenses.
Family expenses
- Day care
- School tuition fees
- Compensation fee
- Child support
Personal Care
- Toiletries
- Work clothes
- Haircuts as needed for work
Pet care
- Pet Food
- medicine
- Know your bill
Expert Tip: Consider minimalism to cut your budget
Minimalist spending means reducing all expenses you don’t need to cover. However, few people actually practice this.
When you’re stuck on a strict budget, you embrace the opportunity to understand the value of things, not just costs. Keep your attention not expensive, but rather add real value to your life.
It can also read a good book, spend quality time with your loved one, pursue creative passions, or engage in business.
Example of a bare bone budget
This is an example of a budget that only has essentials based on a monthly income example of $3,500. It follows the above categories.
| category | amount |
| Mortgage or rent | $1,000 |
| Utility Invoice | $250 |
| Grocery | $400 |
| Car or transport | $200 |
| Emergency savings | $200 |
| debt | $150 |
| phone | $150 |
| internet | $50 |
| health care | $100 |
| insurance | $200 |
| Family expenses | $500 |
| Personal Care | $100 |
| Pet costs | $200 |
| total | $3,500 |
This example totals $3,500. You can adjust your cost number to suit your personal situation. If you find that you have extra money left, don’t use it. Save it instead and pay off your debts or contribute to your retirement, depending on the situation.
Things you shouldn’t use
Now you know what is essential, but here we will try not to add your expenses.
- tv set
- Streaming subscription or cable replacement
- Music subscription
- Other unnecessary memberships and subscriptions (magazines, newspapers, gyms, etc.)
- New clothes
- Non-essential travel
- Non-essential personal care products (e.g. cosmetics, nail polish, etc.)
- Restaurants and bars
Stick to your budget and bounce
If you are really in crisis mode and can only cover naked expenses, you need to stop all unnecessary spending.
However, if you use a bare bone budget to get out of debt or save big financial goals (for example, a down payment at a home or wedding), it is actually a good idea to make room for monthly splurges.
By leaving room for yourself for one monthly splurge (such as dinner or nail polish), you can feel a little relieved from the strict rules you follow.
How do you stick well to a bare bone budget?
To stick to your bare bone budget, first think about what your expenses are and make sure you can cover them. All other expenses (luxury, entertainment, non-essential relationships, etc.) must be put on hold.
Sticking to a bare bone budget can be difficult, but it is very possible to intent and focus. If you’re struggling to stop spending, here are some tips you can try yourself.
Track your spending
Do you know where your money goes? If the answer is no, you should start tracking your spending.
A great way to do this is to use your spending journal to write down what you spend and then review it at the end of your daily life. There are also plenty of budget templates and tools you can use to do this.
Removes obvious temptation
Whether your friend asks you to go in the evening or “window shopping” at the mall, you may want to overuse it. Getting rid of these temptations will help you stay on track.
Use cash, not credit cards
Normally, if you’re using your credit or debit card to spend your money, now is the time to stop. Using cash will allow you to see exactly where your money goes in real time.
What does naked cost mean?
Your naked expenses are the payment you need to live. These include essentials such as housing costs (rent and mortgages), food, medicine, water, electricity, and core utilities such as internet.
If you are trying to cut your spending, these are inevitable costs and you will need to keep paying.
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If you like to learn how to budget without overdoing, check out these posts on budgeting next!
Get ready now – don’t wait for an emergency to create a budget for bare bones
Even if you need a bare bone budget right now, it’s always a good idea to have something outlined and ready. That way, if you’re in a financial situation, you can relieve a little stress by preparing to cut costs faster.
Above all, having a good budget (and sticking to it!) is key to financial health, regardless of your current financial situation. You can also discover other creative ways to cut your budget!