Budgeting Set Up a Bare-Bones Budget By Miriam Caldwell Miriam Caldwell Miriam Caldwell has been writing about budgeting and personal finance basics since 2005. She teaches writing as an online instructor with Brigham Young University-Idaho, and is also a teacher for public school students in Cary, North Carolina. learn about our editorial policies Updated on November 23, 2021 Reviewed by Ebony J. Howard Reviewed by Ebony J. Howard Ebony Howard is a certified public accountant and a QuickBooks ProAdvisor tax expert. She has been in the accounting, audit, and tax profession for more than 13 years, working with individuals and a variety of companies in the health care, banking, and accounting industries. learn about our financial review board Fact checked by Vikki Velasquez Photo: Thinkstock/Stockbyte/Getty Images A bare-bones budget is a budget that covers only the basic necessities. You may switch to this budget if you lose your job, or take a cut in pay. You may switch to a bare-bones budget if you are trying to get out of debt or working toward a specific financial goal as quickly as possible. A bare-bones budget does not allow for extra spending and it can be hard to maintain over the long term. List Your Necessities A bare-bones budget is going to cover only your necessities. Your necessities include paying your mortgage or rent (shelter), your basic utilities (heat, power, and water) and your food. If you need the Internet to work, you may be able to include it, but if money is really tight you can take advantage of free WiFi at the library or a store. It depends on how serious your situation is. Cut These Expenses This means that you do not buy new clothes, spend money on entertainment or other optional things. It means that you do not eat out. You should prepare your food at home since it is much less expensive than eating out. You may want to cut back on your cell phone plan. You should cancel any memberships and automatic debits that you have coming from your account in order to save money. You should reduce any plans that are under contract to the bare minimum required to avoid paying fees to cancel the contract. Never Cut These Expenses You should do everything you can to keep your health insurance. A medical emergency in this situation can throw you into a tailspin. It is important that you put health insurance above other expenses on your list. If you still have a job, you should still contribute to retirement up to your employer’s match. If you are currently unemployed, just work to keep yourself from dipping into your retirement savings. Crisis Mode vs. Cutting Back If you are in a true crisis, you will want to cut back as much as possible. This means no entertainment spending, no eating out and no cheating on your budget. If you are cutting back to the barebones to help you reach a financial goal, it’s best to plan for a splurge every now and then so that you do not blow your budget. This is essential if you are trying to do this for an extended period of time. However, if you are simply trying to get by after losing your income or taking a cut in pay, you will need to cut back as much as possible. This means that you need to be able to justify everything you spend as being a necessity. When it comes to your grocery budget, you will want to save money by planning your most inexpensive meals. When you are in an extreme situation, it is important to take extreme measures to protect yourself. If you have no money coming in, taking a temporary part-time job can help you get by while you are looking for another job. Just be sure that your temporary job allows you time to keep looking for a job that can help you get back on track. It helps to have an emergency fund in place so that you have more time to look for a job and you are less likely to end up with no way to pay for anything. Your emergency fund can take a lot of pressure off a situation like this and make it easier for you to consider your options and find the best fit for your situation. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. National Immigration Law Center. "The Consequences of Being Uninsured." Page 2-4.