As a starting point it makes sense to separate your monthly expenses into needs and wants. The obvious “needs” are expenses related to housing, food, medication and clothing. Everything else could be considered a nice to have or “want” expense that can be scaled back or cut all together. Your need expenses canTOP SALE also likely be scaled back to some degree to save money. What I call a bare-bonesTOP SALE budget is the lowestTOP SALE amount you
What does my bare-bones budget look like? My monthly budget looks like this today. Keep in mind that it is for two people (myself and girlfriend).
Today I spend ~$3,800 a month on both wants and needs in my budget. If I had to, I could scale back my monthly spending to $1,400 a month (a 63% decrease) to get by.
The biggest changes would be my monthly rent and food expenses. I could move from my current 1 bedroom rental apartment in my current neighborhood of Toronto to a 1 bedroom apartment rental in a shadierInternet Job part of Toronto. Aside from location, I’d probably have to give up otherInternet Job things like
The other “want” items that I could cut back on are my car (i’d have to sell it), my public transit pass (don’t need it if I don’t work), cable, internet and cell phones. Life would suck without all of those things, but I could do it if I had to.
So, how much could you cut out of your monthly spending and what is the lowest monthly amount you could live on? Use my Quick Budget Excel Spreadsheet to help with this exercise.