Spend

Why you should create an 'essentials only' budget before you actually need it

Twenty/20

CNBC Make It is posting a new financial task to tackle each day for a month. These are all meant to be simple, time-sensitive activities to take your mind off of the news for a moment and, hopefully, put you on sturdier financial footing. This is day eight of 30.

If you are worried about losing your job or an uncertain economy, create an "essentials only" budget now. That way, if an emergency situation arises, you'll already be prepared.

First, go through your last few months worth of bank account and credit card statements — or the spreadsheet you've made to track your expenses — and categorize your spending into four categories: Fixed, lifestyle, discretionary and savings, Chantel Bonneau, a wealth management advisor at Northwestern Mutual, tells CNBC Make It. This will help you see where you can completely cut out costs or reduce spending if money gets tight.

Fixed expenses are the bills you can't negotiate for the time being, like your rent or mortgage payments. Lifestyle expenses, per Bonneau, are the things you need to buy, but you have control over the cost, like groceries. Discretionary expenses are "extras" you could cut out completely if you had to, like beauty products or vacations. And savings are any savings and investments.

"Thinking through your budget this way helps you identify where you have options," Bonneau writes in an email.

When trying to cut back, your lifestyle and discretionary categories will likely offer the most potential relief. Subscription services in particular are an obvious place to look for extras that you don't take full advantage of, says Bonneau. If you have an iPhone, for example, check which subscriptions you're paying for and make sure you actually use them. You can do this by going to: Settings > [your name] > iTunes & App Store > View Apple ID > Subscriptions. You should also review your credit card statements for others you might have forgotten.

After that, research cheaper options for lifestyle expenses you don't want to completely cut out, Bonneau suggests. "Maybe you love your weekly juice delivery, but perhaps you indulge less often and opt for every other week," she says.

Then, make note of any annual fees you could pause or cut out. "Some may be necessary or appropriate, but if you could ... get rid of a credit card that has a $99 yearly fee, that could help," she says.

Finally, look to your fixed expenses, which includes things like rent or mortgage payments, student loans and other bills. If you have debt, call your providers and see if they can lower your interest rate. You still need to make payments if you can, but remember that deferment and forbearance can be last-resort options

If you're still having trouble, Bonneau recommends turning it into a game. "Challenge yourself to cut out 5 or 10%," she says. "Rank things in order of your priorities, track your spending in an area and even find a friend who will take the same challenge with you."

Once you have a list of everything you can cut, keep it somewhere easily accessible, like in a Google doc or a money diary. Review it every so often to make sure it still reflects your spending. Then it will be ready when you need it.

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