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Prepping for job (Part 1): Making a budget

By Carmen OToole

The job market has shifted. With hiring cycles in many industries now stretching between 3 to 6 months, the “quick bounce back” is no longer a guarantee. Volatility is the new normal. Ignorance is expensive. If you wait until the paycheck stops to look at your spending, you will burn through your cash reserves twice as fast due to panic-spending and “ghost” subscriptions.

The Payoff: When you know your exact Survival Number, fear turns into math. You sleep while others panic because you know exactly how long your runway lasts. You aren’t guessing; you are executing a plan.

Map Your Financial Terrain: The Bare-Bones Budget

You cannot prepare if you don’t know what you’re up against. Before you can build a safety net, you must measure what you’re protecting. A “bare-bones” budget answers one question: What is the absolute minimum I need to spend to survive each month? This process will give you that number.

Step 1: Gather Your Financial Intelligence

You can’t create an accurate map without good data. Your first task is to collect all the necessary documents. Look back at the last 3 months to get a realistic average of your spending, as a single month can be an outlier.

Gather these documents from the last 90 days:

  • Core Financial Statements
    • Bank Statements (all checking & savings accounts)
    • Credit Card Statements (all cards)
  • Household & Utility Bills
    • Electricity Bill
    • Natural Gas Bill
    • Water & Sewer Bill
    • Internet & Cable Bill
    • Cell Phone Bill
  • Housing & Major Loan Documents
    • Mortgage Statement or Lease Agreement
    • HOA/Condo Fee Statements
    • Property Tax Bill
    • Auto Loan Statements
    • Student Loan Statements
    • Personal Loan Statements
  • Income Records
    • Pay Stubs (last 2-3)
    • Self-Employment Income Records (QuickBooks, bank deposits, etc.)
  • “Invisible” Spending Records
    • Venmo, Cash App, and Zelle transaction histories
    • Review bank statements for ATM cash withdrawals
    • Review statements for small, recurring subscriptions (apps, etc.)

Use a spreadsheet, a dedicated budgeting app, or a simple notebook and pen. The tool doesn’t matter; the process does.

Step 2: The Financial Dragnet - Sort Your Needs vs. Wants

This is the most critical step. Use the documents you just gathered to go through the comprehensive checklist below. For each item that applies to you, write down its average monthly cost. Then, you must decide if it is a bare-bones Need or a Want.

A Need is an expense required for your immediate survival and ability to find a new job. A Want is everything else—the first things to be cut in a zero-income emergency. Be honest and strict with your definitions.

Example Checklist of NEEDS to save for.

Housing

  • Mortgage or Rent
  • Property Taxes (if not in mortgage)
  • Homeowners/Renters Insurance
  • HOA/Condo Fees
  • Essential Home Maintenance Fund ($25-$150)

Utilities & Communications

  • Electricity
  • Natural Gas / Heating Oil
  • Water & Sewer
  • Trash & Recycling
  • Basic Internet Plan (Downgraded)
  • Basic Cell Phone Plan (Downgraded)

Transportation

  • Car Payment(s)
  • Car Insurance
  • Fuel (Essential driving only)
  • Essential Maintenance Fund ($25-$50)
  • Public Transit Pass/Fare

Health & Medical

  • Health Insurance Premiums (COBRA/ACA)
  • Required Prescription Medications
  • Necessary Doctor/Dentist Co-pays
  • Essential Medical Supplies
  • Basic Over-the-Counter Meds

Food & Household Supplies

  • Groceries (At-home cooking only)
  • Household Supplies (Cleaning, toilet paper, etc.)
  • Baby/Infant Needs (Formula, diapers)

Family & Dependents

  • Childcare (If required for job search)
  • Child Support or Alimony
  • Pet Food & Essential Vet Care
  • Tuition/School Fees (If non-negotiable)

Debt & Financial Obligations (Minimum Payments Only)

  • Student Loans
  • Credit Cards
  • Personal Loans/Lines of Credit
  • Bank Fees

Step 3: Calculate Your Survival Number

Now, add up the monthly cost of only the items you designated as a “Need.” This final number is your true Bare-Bones Budget, or your “Survival Number.” It is the single most important number for your financial preparedness plan.

Example: Survival Number = (Housing + Utilities + Food + Debt \ Minimums + Health)

Step 4: The Execution

Goal: Operationalize the budget immediately upon job loss.

⏳ The moment you receive bad news, trigger this protocol.

  1. The Immediate Cut: Cancel or pause every single “Want” identified in step 2. Do not “wait and see.” Conserve cash immediately.
  2. The Cash Hoard: Stop all extra payments on debt. Pay only the minimums on credit cards and loans. Liquidity is your lifeline right now.
  3. The Diet Shift: Switch your grocery shopping strictly to the “Need” list. No eating out. Meal prep is now your part-time job.

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