7 Steps To Create Your Bare Bones Budget + FREE Calculator

The term Bare Bones Budget may sound a little grim at first, but it perfectly describes the mindset of living well below your means so you can reach your financial goals faster. My goal was to enjoy a 2-year parental leave without financial stress. But the goal doesn’t really matter—what matters is committing to a bare bones budget for a set period of time.

In this post, I’ll show you exactly what a bare bones budget is and how to create your own with our free Bare Bones Budget Calculator in 7 simple steps. Together, we’ll define your bare bones necessities, and explore how to approach them with frugality. We’ll define the right size for your emergency fund, look at how to handle debt payments and credit cards while living bare bones, and how to actually stick to a bare bones budget as a family with kids.

What Is a Bare Bones Budget?

A Bare Bones Budget means focusing only on the bare bones necessities—the absolute must-haves in your budget. That includes housing, essential financial obligations, and fixed costs such as childcare or sometimes even car payments. I call this “money to survive,” although you could argue about whether a car payment belongs there. Everything else—whether it’s dining out, a streaming subscription, or a gym membership—falls into the non-essential category.

What Counts as Bare Bones Expenses?

Recognizing the difference between what you NEED to survive and what you WANT to consume is eye-opening. Looking at the ratio between the two can change the way you view your finances. I highly recommend adding up your “survival expenses” and your “consumption expenses” and comparing them—it’s a simple but powerful exercise.

How much do you spend every month on your bare bones necessities? Seeing your real numbers—your actual expenses—right in front of you will do something powerful: it will empower you to make a mindset shift that you’ll benefit from for the rest of your financial life. If you realize that you spend 1,200+ Euro on food—as we did a long time ago for just the two of us—it’s time for the next step.

Bare Bones Expenses and Frugality

How to Add Frugality to Your Bare Bones Budget

When living on this type of budget, you approach all spending with frugality. You challenge yourself to cover only the bare bones necessities in every expense area—the absolute minimum you truly NEED.

For example, when grocery shopping, you don’t buy convenience food or any pre-packaged, pre-cooked meals. Instead, you put ingredients in your cart to cook at home. There are many resources on how to do this quickly. You may also want to consider implementing elements of the pantry challenge as one of the money-saving challenges I’ve shared.

Generally, the food category in your budget is where you can save the most if you apply frugality. That doesn’t mean eating cheap. It means finding ways to eat healthier while spending less. I can tell you first-hand that it’s possible—especially as a family. We used to spend well over 1,200 Euro per month on food for just the two of us, and we didn’t even eat healthy—just a lot of fast food. Today, we spend 200–600 Euro per month on 90% wholesome food as a family of four. We’ve never eaten this healthy.

Tips to Cut Your Grocery Bill in Half and Eat Healthier

1. Stop couponing. A few years ago, I was a big couponer myself, and I quickly learned the downside. Coupons tempt you to buy things you normally wouldn’t—and often in quantities you can’t finish. The result? Food waste and, worse, eating more unhealthy, low-nutrient products.
2. Stop eating out. I know it’s convenient to just go out and be served, but simply stop.
3. Brew your coffee at home. The well-known “Latte Factor” shows how tiny changes in daily habits—such as skipping that morning coffee run—can add up and make you wealthier over time.
4. Shop seasonally at farmer’s markets. With food prices soaring, this makes a real difference. For example, in summer, a pack of strawberries in our supermarket costs 6–9 Euro, while at my farmer’s market I get the same amount for just 3 Euro—because I don’t mind if they’re not picture-perfect.
5. Stick to your grocery list! I know it’s tough—it still is for me, too. I’ve shared my best strategies in a post I wrote on that topic about Impulse Buying and the most common triggers behind it.
6. Try grocery shopping every two weeks. I made a master list of the essentials we always need, and then expanded it to cover a full two weeks. Total game changer! At first, we eat the fresh, perishable foods. Later in the cycle, it’s mostly apples, bananas, kohlrabi, carrots, and pickled veggies like cucumbers. It took me years to figure this out, but it works—and it drastically reduces food waste.
7. Lower your utility bill. Cooking at home takes both electricity and water, but small hacks can help. For example, I keep a measuring cup in the sink to collect rinse water and then reuse it for boiling eggs. It’s a tiny change, but it saves. Other ideas? Unplug appliances like the coffee machine, or even skip them entirely. We use a Chemex for brewing coffee—our favorite method now.

The 7 Simple Steps to Build Your Bare Bones Budget

Here are seven practical steps that will help you succeed when creating and sticking to your first Bare Bones Budget:

Determine a Set Amount of Time

Step one is to decide how long you’ll try living on a Bare Bones Budget—7 days, 30 days, or even a year. The key is that it’s your choice, not a forced necessity. Recognizing that privilege alone makes the challenge valuable. Most people start with one month, as it’s long enough to feel the impact but short enough to stay manageable.

Choose the Time Period Wisely

Be smart about when you start your Bare Bones Budget you’ll try living on that budget for a couple of days, or even weeks. A vacation might not be the easiest time—but depending on your situation, it could be the perfect challenge. If your goal is to push yourself and save money fast, even Christmas or holiday periods can be the ideal testing ground.

Figure Out Exactly What You Spend

The next step is to get clear on your spending. That means tracking every expense. There are lots of free tools out there to help—see The Budget Mom, read Our Pick Of Best Free Budgeting Apps and The Best Budget Apps, or use the online tool we use such as YNAB.

Identify Expenses You NEED to Keep

For more than ten years, we’ve been tracking and budgeting our money—and we’ve learned a lot in the process. Most importantly, how to go through all spending categories and figure out which expenses NEEDs to stay.

Ask yourself: Which ones are non-negotiables, like bills and food? And which ones are nice-to-haves or luxuries you could do without, at least for a while? You can either keep them, cut them completely, or reduce them—something we’ll cover in the following step.

When you go through this step with your partner, be ready for uncomfortable conversations. For us, an old conflict resurfaced quickly: transportation costs. We own a car—but do we really need it to survive? For me, a bus ticket covers the necessity of getting to work. A car does too, but in truth, it’s a luxury, not part of the bare bones necessities. My husband disagrees, and honestly, this is a debate many families face.

Find Frugal Ways to Reduce Bare Bones Expenses

Once you know your numbers, the next step is finding smart ways to reduce even your bare bones expenses through frugality. Our car costs were the perfect example. We decided to only drive when truly necessary. My husband takes the car on the rare days he commutes to the office, since public transport doubles the travel time. I use it twice a month for farmers market trips that are too far by bike. Beyond that, we rely on e-bikes or simply walk—one of the perks of living in a small town. This approach cut our food bill and made our budget leaner.

Determine an Exit Strategy

The final step is to have an exit strategy. Living on a Bare Bones Budget will test you with temptations to spend—and your kids will feel them too. Show them (and yourself) how not to give in to those impulses. That lesson alone outweighed every challenge for me. I’ve shared more of that journey in a post I wrote on that topic about overcoming impulse buying, and I hope those strategies help you as much as they helped me.

Track Your Spending and Evaluate Those

Keep an eye on your spending and review it often. Honestly, I can’t emphasize this enough—tracking is the key to success. When you rely on a Bare Bones Budget, check your spending every 2–3 days, or at least weekly. Share this task with your partner. That way, you’ll quickly see whether you’re staying aligned with your plan or drifting off course.

FREE Bare Bones Budget Calculator

Ready to create your first Bare Bones Budget? Download our simple Bare Bones Budget Calculator for free.

At first, I built a Bare Bones Calculator just for myself. My goal was to get through two years of parental leave with lower income and higher expenses after my second daughter was born. To my surprise, it worked so well that we still managed to save money every month—even with inflation at record highs and daycare costs doubling.

I want you to feel that same sense of financial control. That’s why Marc transformed my messy spreadsheet into a comprehensive, powerful tool. Our mission is to help other families live their dream life on a budget they can actually afford.

With this Bare Bones Budget Calculator, you’ll see how to thrive in tough times, whether you’re dealing with reduced income or rising expenses like we did. We’ve even included our own Bare Bones Budget example with real numbers to guide you.

FAQs About Living On a Bare Bones Budget in Real-Life

Managing Debt Payments and Credit Cards On a Bare Bones Budget

Your debt payments are fixed expenses, so they must be included in your Bare Bones Budget. That said, it’s worth calling your creditors to see if they’ll temporarily lower them. While you might choose to make minimum payments during your bare bones phase, it’s not a great long-term strategy. Whenever possible, aim to stick with your regular repayment plan.

Credit cards are a whole different issue. Unless you’re using them strategically—like for travel hacking, which I explained in a post I wrote on that topic—they can quickly become a trap. When was the last time you checked your statements or even knew exactly how much credit card debt you carry? If the answer is “not recently,” it might be time for a reset.

You could cut up your card, freeze it (yes, literally in your freezer), or at least tuck it away out of reach. A simpler approach: review your bank statements, withdraw cash you can safely spend, and commit to living on just that.

What If Something Breaks Unexpectedly?

Our first experience with a Bare Bones Budget happened almost by accident. When our cooktop broke during the Corona lockdown, we couldn’t buy a replacement—there was nobody to install it. Even with Marc’s technical know-how, DIY fixes weren’t an option. So we reached out to friends, and someone in our circle stepped in to help.

It’s surprising how often help comes free—because someone always knows someone. With a bit of guidance, we managed for months on a half-broken cooktop until a friend installed the new one. That delay gave us valuable time to save money without putting extra strain on our budget.

What If an Unexpected Invitation Pops Up?

When your child is invited to an expensive activity, it can feel tricky. One option is to suggest an alternative—like inviting friends over instead. Help your kids set up a simple garden party with a DIY fireplace, roasted marshmallows, and even spooky stories told by a masked dad. It’s often more fun, more memorable, and much cheaper.

Be open with your family, friends, and especially other parents. Sometimes it’s okay to cancel plans and replace them with a simple re-invitation at home. There’s nothing to feel ashamed of—quite the opposite. You can be proud of making bold financial decisions and taking action toward your goals by living bare bones, even if only for a while.

How to Calculate an Emergency Fund Based on Bare Bones Expenses

Think of your emergency fund as your safety net. When something unexpected happens, you can draw on it instead of reaching for credit cards or loans. And if people or pets rely on you, this buffer becomes even more essential. It’s what keeps a crisis from turning into new debt.

Some people try to build their emergency fund by living bare bones for a while, but that’s the wrong way around. First, live bare bones to see how much you truly need to cover your bare bones necessities. Add a small buffer for safety. Then multiply that number by 3, 6, and 12 to calculate your 3-, 6-, and 12-month emergency fund targets.

Live on a Bare Bones Budget for as long as it takes to build up a full one-year emergency fund. If that sounds impossible while living paycheck to paycheck, think smaller: start with a side hustle or aim first for a “starter emergency fund” of 1,000 Euro. From there, work your way up. For best results, keep the money in a high-yield savings account earning 2–4% interest.

My Lessons Learned from Living on a Bare Bones Budget

My experience with a Bare Bones Budget goes way back. But that was more of an accident than intentional. As a student, I lived on a bursary that forbade me from earning extra income. That meant surviving on just 660 Euro a month—half of what I once made in a part-time job so far. To get by, I shared a flat and bought only the cheapest groceries. It wasn’t glamorous, but it proved that frugality works—and can even feel empowering.

Over the years, I’ve realized that spending less doesn’t limit your family—it enriches it. A Bare Bones Budget makes you ask: What really matters? What can’t we compromise on? For me, it’s my children’s education—not their clothes or toys.

By cutting non-essentials, I’ve shown my kids that living within your means isn’t a loss—it’s a strength.

Curious how much you could really save by living on just the essentials? Try our free Bare Bones Budget Calculator—the results might surprise you.

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Title Image Source: Ryan Holloway auf Unsplash