In March 2020, as our governor proclaimed that all schools would be shutting down because of the Covid-19 pandemic, my feelings were mixed. A sense of relief washed over me as I had already contemplated the idea of keeping my son at home until the outbreak was brought under control. At the same time, anxiety began to chisel at me as this meant my husband, who was juggling a part-time job at a school bus company and his trade school studies, would be out of employment which would affect our income.
As a consequence of the school closures, my husband was left unemployed. Faced with this challenge, we sat down to discuss our spending and ascertain the essentials we needed to cover.
You could say we crafted our very first ‘no-frills’ budget.
Little did we know at the time, that what we were putting together was what is commonly known as a ‘no-frills’ or ‘bare-bones’ budget, a contingency plan that need not always be associated with emergencies.
While I hope not to encounter another global health catastrophe, I find having a minimalist budget is going to be a practical tool for future use.
WHAT IS A NO-FRILLS BUDGET?
A no-frills budget is simply a budget that caters only to your fundamental needs such as accommodation, transport, and sustenance. It is a minimalist approach to your spending that prioritizes your basic necessities.
Expenditures such as subscriptions, shopping trips, eating out and daily expenses like a coffee run, hobbies, are usually not included in a no-frills budget as they are considered luxuries rather than necessities. It can also encourage less frivolous spending.
ADVANTAGES OF A NO-FRILLS BUDGET
Despite being less than exciting to employ, a no-frills budget can be a lifesaver in times of financial crisis or can help achieve specific financial objectives.
KNOW YOUR BASIC EXPENSES:
A no-frills budgeting plan enables you to discern the bare minimum you need to live contentedly. It can be quite a relief to know that your essential needs are taken care of even in the gravest of situations.
CRUCIAL IN CRISIS:
In case of job loss or other financial difficulties, a no-frills budget can provide solace. By comparing your regular expenditure with a stripped-back budget, you can pinpoint the essentials hassle-free.
USEFUL FOR UNPREDICTABLE INCOMES:
For those with irregular incomes, such as myself, a no-frills budget can play a crucial role in ascertaining your minimum monthly earnings to cover basic needs while the surplus can be dedicated to achieving goals or enhancing lifestyle.
SERVES FINANCIAL GOALS:
Avid savers and investment enthusiasts often resort to a minimalist budget to free up cash for aggressive financial goals like expanding your emergency fund, increasing investments, or swiftly settling debt.
TRUTHFUL ASSESSMENT OF ESSENTIAL EXPENDITURE:
Determining your necessary expenses requires honesty and pragmatism. With a minimalist budget, financial stress is eased as you focus only on the absolute basics that you require.
You may have to accommodate the following in your no-frills budget: Housing, utilities, transportation, childcare, groceries, household necessities, insurance, and cell phone/internet depending on your circumstances.
USE A NO-FRILLS BUDGET TO PROSPER
If you have set high financial goals for the year, opting for a no-frills budget can serve you well. Take up a 30-day challenge to check how much you can save for larger debt payments or other financial objectives.
Whether you intend to adopt a no-frills budget immediately or not, I would highly recommend creating one as a contingency plan, for you never know when you might require it.
