Building Your Bare Bones Budget: The Foundation of Financial Clarity
☕ Grab your coffee—let’s get into it.
If you’ve been following along with my Bite-Sized Budgeting series, you’ve already done some serious detective work by gathering your spending data. (If you haven’t yet—go back and do that step first. It’ll make this part so much easier.)
Now it’s time to take that information and use it to build your Bare Bones Budget—the simplest, clearest version of your financial life.
Think of it as the “no-frills” version of your budget. It’s the part that keeps the lights on, food on the table, and your life moving forward, even if things got tight for a while.
It’s not fancy. It’s not overwhelming.
It’s your foundation.
What a Bare Bones Budget Really Is
A Bare Bones Budget covers the essentials—the expenses that are absolutely necessary to keep your household running. These are the things that, if you didn’t pay them, your daily life would come to a halt.
Here are a few examples:
Housing: rent or mortgage
Utilities: electricity, water, internet, heating
Groceries: realistic, not restrictive
Transportation: car payment, gas, insurance, or bus pass
Insurance: health, life, renter’s, or auto
Minimum debt payments: the required minimums only
That’s it. Everything else—streaming subscriptions, dining out, Target runs, weekend getaways—can take a backseat for now. They’ll make a comeback later when we build your full, values-based budget.
Why It Matters
Here’s the magic of this step:
When you know your Bare Bones number, you know exactly how much income you need each month to keep your world running.
That number gives you clarity—and clarity brings confidence.
It’s your financial anchor. You can use it to:
Understand how much income you truly need to cover the basics
Make informed decisions about career changes, schedule shifts, or family planning
Build an emergency fund goal that actually makes sense
Feel grounded during uncertain or variable income months
When life throws curveballs, your Bare Bones Budget is what keeps you steady.
How to Build Yours (Step-by-Step)
1. Gather your data.
Pull out your highlighted bank and credit card statements, or those lists of fixed and flexible expenses from the last step. You’ve already done the hard work—this is where it pays off.
2. Identify what’s truly necessary.
Look at each expense and ask, “Would my daily life stop functioning if I didn’t pay for this?”
If the answer is yes, it’s a necessary expense. If not, it goes in the “optional” pile.
3. List your essentials.
Write down each necessary expense and its average monthly cost. If a bill varies, take the average from the past few months so your number is realistic.
4. Add them up.
The total is your Bare Bones Budget—your baseline income need each month.
That’s the amount you must earn or have available to cover your essentials and keep your life running smoothly.
A Gentle Reminder: Awareness Over Perfection
When you do this exercise, remember—this isn’t about shame or restriction. It’s about awareness.
Money feels overwhelming when it’s vague.
When you turn those unknowns into numbers, you gain control.
And with control comes calm.
So don’t worry if your Bare Bones number surprises you. That’s the point. You’re gathering information so you can make better, more intentional choices going forward.
Moving Forward
Once you’ve built your Bare Bones Budget, celebrate it. Seriously—this is a big milestone.
You’ve just created the foundation of your financial plan.
From here, we’ll build up your full budget—one that includes your values, goals, and the life you’re working toward.
But for now, take a deep breath and know that you’ve done something powerful:
You’ve replaced financial uncertainty with clarity.
☕ Real Talk
The Bare Bones Budget isn’t about living small—it’s about knowing what “enough” looks like for you. Once you know that, every financial choice becomes a lot less scary and a lot more intentional.
✨ Next Step
🎥 Watch the full episode: Building Your Bare Bones Budget on The Sensible Penny YouTube Channel
💌 Want help applying this to your life? Learn about Money Confidence Coaching
