Creating A Bare Bones Budget When You’re in Debt

bare bones budget

If you’re in debt, you may find yourself trying to balance bills, debt repayment, and miscellaneous expenses. A great way to start paying off your debt is to create a bare bones budget. This budget will show you how to live on less, and get your financial life back in order.

Go Through Your Current Budget

The first step to creating your bare bones budget is to evaluate your current budget. If you don’t have a budget, it’s time to create one. Go through your income and expenses from the last few months, and write everything down in categories. Once your current budget has been assessed, it’s time to determine your wants vs. needs.

Wants vs. Needs

Looking at your current budget, are there ways that you can cut back? A bare bones budget is exactly what it’s called...bare. It involves your needs only, with very little room for wants.

Could you be spending less on food? Could you live in a smaller or cheaper place? What about current bills? If you are trying to pay off debt a little faster, it’s best to cut bills like cable and phones until you can really afford them. There are other ways to enjoy TV for free, and you could always get a to-go phone.

Once you have your needs written down, if you are still struggling to make ends meet, it’s time to do some haggling. Find ways to slash your utility bills, drive your car less if possible, and negotiate with the companies you have to deal with. For items like health and life insurance, there are ways to cut down costs for most people, and you can do the same for bills like car insurance, electric bills, and more.

Don’t Forget Savings in a Bare Bones Budget

At this point, your bare bones budget is almost complete. If you have the room, add a spot just for savings. It doesn’t have to be a large amount of money every month, but choose a number that you would be comfortable with.

Even with a bare bones budget, it is important to save. If an emergency were to happen, instead of putting yourself in more debt, you could fall back on your emergency fund.

A great starting point is $20 a paycheck, but again, choose what works best for you. You can always adjust this amount later on.

Schedule Your Debt Payments

If you’re reading this, chances are that you want to have a bare bones budget so you can pay off your debt. Once your bare bones budget is complete, it’s time to schedule your debt payments.

You should know how much money you owe and what you’re paying for every month, so now it’s up to you on how you want to pay off your debt. There are many strategies for paying off debt faster, and with a bare bones budget, you will know what you can afford and pay.

At the very least, automatically schedule your debt payments. Not only will this give you some time back in your day, but you won’t have to worry about making sure all of your debts are paid every month.

Whenever you make more money from a side hustle or your job, add that money to your debt and continue to live from your bare bones budget. This will help you get out of debt faster, so you can enjoy your money later.

Allow For Small Indulgences (When You Can)

Having a bare bones budget can make you a little stir crazy if you are working so hard with no play. However, you can still allow for small indulgences while on your budget journey.

Try finding free hobbies that make you happy, or go out for a small treat (like ice cream) when you hit another debt payoff milestone. These activities will help keep you focused and make you feel less stuck.

The most important thing to remember when creating and implement your bare bones budget is that this won’t last forever. Eventually, all of your debt will be paid off, and you’ll be able to enjoy your life much more. A bare bones budget is a starting point, but it’s up to you to stick with it and get rid of your debt.


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One thought on “Creating A Bare Bones Budget When You’re in Debt

  1. Everyone should evaluate their spending habits. It's amazing how easily we can "nickel and dime" ourselves out of hundreds of dollars per month. With on-line banking, it is easy to do a "sort" to see where, how much and what is being spent.

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