The ‘Survival Budget’ coined by Rob Berger, is very similar to the envelope method of budgeting, the main difference being that you live off of the bare minimum. As the name suggest this budget is the bare bones – paycheck to paycheck budget.
To start this budget you don’t need to go out and purchase the latest version of some software, you’ll only need something to write with and to write on.
A lot of people have a little in savings and are doing well for themselves, then something happens. Your fridge breaks or your AC goes out and you have to use your savings to fix it. This leaves you a little financially strapped. This budget is a good way to help you get back on your feet.
This budget isn’t for planning for a future vacation or for retirement – it’s for creating some breathing room, trying to create a little safety net for you and your family. I have created an example of expenses – on the left in gray is what you are using without stopping any extras – on the left in orange is the adjusted monthly expenses.
I recommend writing down all your monthly expenses. Don’t forget about any subscriptions you may have too. Here's a free downloadable to start your own survival budget.
If you work hourly you will need to get the average of what your monthly income is and write it down. Then you will need to write down all your expenses. Some people don’t realize how much money they are actually spending each month until they see it in writing. This is a good opportunity to actually see where your money going each month. When I first did this, I was very surprised at how much money we were spending on dining out specifically.
When you have both of these numbers, if your expenses are greater than your income – that’s obviously not a good thing. This is where you get rid of what you can live without. The picture above shows an example of what your paying verses what you could be paying. You don’t have to get rid of date night or all of your entertainment but, cutting back is a good way to save money.
The extra money that you save is a great way to help restart your safety net and get you back on your feet. There are some expenses that are unavoidable though (utilities, rent, car payment), but there are some that you could cut for a few months to pad your bank account a little and actually create that breathing room you might be needing or learn that you don't really need Netflix, Hulu, Peacock, Paramount and Disney. Just pick one maybe two that you actually use all the time.
This budgeting style is difficult. It feels like all you do is work and sleep and have no time for anything else. The way I like to think about it is like this: this isn't meant to be forever.
