How do you make a bare-bones budget?

To make a bare-bones budget, list all your expenses, determine which ones are must-haves, and cut out any unnecessary spending. A bare-bones budget limits your spending to the bare minimum when money is tight or you want to save for a financial goal in a short amount of time.

How to Make a Bare-Bones Budget

1. List all your expenses.

Make a list of all the things you pay for in a month, such as rent, utilities, food, gas, and subscriptions. You can review your bank and credit card statements to see what you spend your money on.

2. Identify essential expenses.

Determine which of your expenses are legitimate needs, rather than nice-to-haves. For most people, this will include your rent or mortgage payment, groceries, utilities, gas, insurance, and minimum debt payments. Make sure to include only truly necessary expenses in your budget.

3. Cut unnecessary spending.

After you have identified your necessary expenses, figure out ways to cut out or lower your non-essential expenses. Some things you can do include:

• Cancel subscriptions
• Avoid dining out at restaurants and ordering takeout
• Look for free entertainment instead of paying for costly concerts or sporting events
• Pause vacations plans
• Avoid buying new clothes and accessories

4. Use a budgeting tool.

You can set up your budget in a spreadsheet or use a budgeting app, like the WalletHub app. Budgeting apps make it easy to track your spending since they may allow you to sync your financial accounts to have your transactions automatically updated in your budget. Some. budgeting apps also let you set up alerts so you get a notification when you are approaching your spending limit. Plus, you can access your bare-bones budget anywhere you go straight from your phone.

5. Review your budget.

Regularly review your bare-bones budget and monitor your spending to make sure you are staying within budget and make adjustments if you are not. It is also an opportunity to adjust your budget for any changes in income or new bills. In addition, you can see if there are any other expenses you can cut or reduce even further.  

Following a bare-bones budget can be very daunting. To make it more fun, you can turn it into a game by trying the no-spend challenge. You can do the challenge by yourself or have your friends and family members join you. 

To learn more, check out WalletHub’s guide on the no-spend challenge.