In a previous post I’ve stated that knowing your bare essentials budget as a base to build your emergency fund, is bullshit.
I still stand with my pervious opinion. I think emergencies call for bigger budgets, aka your normal monthly budget plus a little cushion. I don’t like deprivation when you’re already in deprivation because of the occurring emergency. When an emergency occurs, you should be in the position to treat yourself, or maybe even get payed help ( aka therapy ) to get through whatever life threw at you. We all know soul crushing things can happen, divorce, death, getting layed off. We need to not have complementary soul crushing emergency fund months to get through this. We need a Ben and Jerry’s, cocktail drinking, talk for hours on the phone to your bestie emergency fund. So I’m keeping to this opinion, haha.
But there still are some good reasons you should know your bare essentials budget.
- You should know how much you could save, like the absolute most, if you had to. This can be handy if you’re setting some goals for yourself, for instance, debt repayment, or setting up travel funds, or a wedding fund. It’s nice to know for how much time you’d have to strap your waist belt real tight to accomplish that goal.
- You’re thinking of new careers or freelancing. In that case it’s also nice to know what you absolutely would need to live off. And again, set for instance a time that you’d have to lift off only that, until the money eventually comes in.
- Striving for financial freedom. If you’d want to be financially free, then knowing your bare essentials budget would be an absolute must. Your bare essentials budget would be the number you’d have to come up with monthly for the rest of your life ( and more likely also some extras if you’d want to live a good life )to live financially free. If that number is for instance 1500 euro. That means you’d have to come up with 1500 euro in passive income at the least, to live financially free. Like I said, it’s all about what kind of lifestyle you prefer to live. But if you’d be okay to live on your bare essentials, ( aka no fancy clothes, no vacay, no extra’s etc etc ) plus an emergency fund, that would be it for you.
- Knowing your bare essentials budget is also handy to reduce costs. Some might say a bare essentials budget can’t almost be altered but that’s not the case. If you are willing to change some things up, the chances are that you could save a lot of money by altering your bare essentials expenses. You could move to an area where rent is lower ( for instance, a lot of Northern Europeans retire in Portugal where the living expenses are lower, in the US there are states where your’d pay lower rent than in other states), or get a roommate, or sell your property. You could change cellphone providers or get a prepaid card, you could cancel subscriptions. You could sell your car and opt for public transport. Getting a roommate could save you 400 euro’s a year, so could getting rid of your car as the average car downpayment for instance in Belgium is 200 euro’s a month, + 350 euro’s tax ( a year ), + 1100 euro’s premium insurance( a year ) and then I didn’t even count the gas and the speeding fines ( I plead guilty every time, this is my dumbest way to spend my hard earned cash ). So it’ d probably save you more money to get rid of the car. Let me reframe that, haha. My car downpayment and all the rest is around that number. I hear a song in my head, it goes like this :” I had boyfriends, with cars, driving me around, like all of the time. Where they go? ” Kidding. You should be self sufficient as a woman at all times! It would have been a big hit though. Anyone knows a musician I could sell that song to?
- There are so many ways to get your bare essentials number down. Personally, I find altering your food budget the trickiest, because I feel like food is such an essential to our lives. Not being able to buy what you really like to eat, is such a sacrifice towards your lifestyle. I feel like being on a strict food budget is such a deprivation to us as humans. I struggle with this thought so much, especially if you’re already cutting out a lot of extra’s from your budget. Food is such an elementary need, for anyone, and it should be accessible to everyone earth. I don’t like to think about it too much because I know that there are a lot of people and kids who just can’t afford what they’d like to eat, or any kind of food at all, budget or not. This thoughts really get me in a lesser mindset. But yes, your food budget is definitely a part of your bare essentials. It’s up to you to decide what you are willing to live with or live without. These are all very though decisions to make, especially because budgets, as wardrobes, as everything in life, change with how we change and our families change, over time.