A “minimum needs” budget is a budget that covers just your most basic living expenses, such as rent, groceries, and debt-repayment. It should be pretty bare-bones and should eliminate all non-essential spending.
To start your budget, you first need to determine the cost of your everyday living expenses.
These are bills you can’t cut out – bills that need to be paid every single month, like rent, groceries, and utilities.
As you create your budget, see if there is any way you can work to lower your bills. For instance, if you have an extra bedroom, can you find a roommate to save money on rent or your mortgage? Can you lower your grocery budget by clipping coupons and signing up for your grocery store’s rewards program? Perhaps you can consider cutting out cable to save hundreds, if not thousands, of dollars every year. Every little bit can help. The point of a minimum needs budget is to free up as much cash as you can. Every dollar you have to spare can be put towards paying down your debt.
To help you get going, start budgeting on a spreadsheet or use a budget app. And remember: no matter how you choose to track your money, the most important thing is to set a budget and stick to it.
