Here's Exactly How to Do A Zero Based Budget This Week

Want to know what the heck is a zero based budget? This post will give you all you need to know about zero based budgeting, so you can go and create an insanely organized zero based budget on your own.

A Zero Based Budget can be very confusing and can feel pretty daunting. There’s just so many ways you can budget your money. If you are anything like me, you’re probably spinning your wheels and not getting any traction.

You are going to learn how to do a zero based budget, from listing your paycheck and subtracting your expenses to knowing where every penny goes. After reading this post, (dare I say) you’ll be ready to try out a zero based budget.

This post is exactly what you need to know about zero based budgeting.

So, What’s A Zero Based Budget?

It’s just a budgeting system where you subtract your income from your expenses to equal zero. It’s just a fancy financial term. That’s all.

It is a genius way to budget your money, though (that’ll make you feel in total control of your finances). Oh, and FYI, you would decide exactly how you’ll spend your money. Every. Single. Dollar. (To get to zero).

I know it sounds weird, but your checking account doesn’t ever have to hit zero.

Let me explain. If you earn $2,000 a month, ALL your expenses should equal to $2,000. (Not more, not less). With a zero based budget, if you subtract your $2,000 expenses from your $2,000 income, it should equal zero. You have to match your income against your expenses, and it should equals zero.

Zero based budgeting allows you to devise a plan for your money. You will know exactly what’s coming into your checking account and what’s leaving your bank account.

And it should equal zero at the end of the month until the next paycheck. But you can always leave a reserve in your bank account like a little cushion, if the thought of leaving your bank account to zero scares you.

What Are the Steps Involved in a Zero Based Budget?

1. List your incoming income

Sit down and figure out how much money you bring in. Write down whatever amount that comes into your bank account from your paychecks, side-hustles, etc. That’s your incoming income.

If you don’t know how much you bring in, log into your bank account and look at your past statements. List any paychecks or any incoming income that hits your account.

This is the first step in doing a zero based budget and the most crucial one. You want to know exactly how much money you bring in so you know what your numbers are so you can subtract your expenses and get to zero.

2. List your monthly expenses

Figure out what is eating your paycheck. Write down every expense.

I’m sure you’ve been putting this off for years because you may not like the number you come up with. Your expenses might be more than your income and instead of getting to zero, you might end up in a negative number.

Don’t freak out! Start small. First list your living expenses, such as rent, food, gas, phones, cable, utility, trash services, landscaping, car maintenance, and house maintenance, etc.

Then list other fun expenses like eating out, getting your nails done, and any Starbucks or Target runs, etc.

And don’t forget to list your random expenses that pop up during the month.

Now that you’ve figured out all your monthly expenses subtract that number against your income, and see what you come up with.

Don’t feel embarrassed if your expenses are more than your income and you don’t even und up in zero but instead in a negative number.

If it’s too overwhelming for you tot track a whole month of your expenses (and you are afraid of facing your impulse spending habits)….just try tracking your spending habits for one week.

Track you spending for this week (without changing anything) and see what number you come up with.

3. Subtract your income from your expenses to equal zero.

Congrats! You’ve attempted to do your first zero based budget. You listed your income and all your expenses; now here comes the easy part…

All you do is just do the math and subtract your expenses from your income to equal zero.

Let me tell you the first few times you attempt budgeting, your income minus expenses won’t equal zero.

It takes practice to master your budget.

But the lessons learned are invaluable! You’ll be a pro at tracking your spending. You’re going to be more mindful about spending. You’ll realize that you needs change month to month, which is why you need a budget, every single month.

Here’s the key take away from doing a zero based budget, you decide where you will spend your money on (before you get paid). You have to come up with a plan and decide where every single penny from your paycheck will go. Then simply subtract your income from your expenses to equal zero.

Remember, your account doesn’t have to get to zero like ever! It just means you have zero dollars left to spend outside of your budget. Get it?

To sum up…

If you are trying to be more intentional about your spending and saving money, you might want to try zero based budget.

It’s the simplest form of budgeting. All you do is list your income and subtract your expenses to equal zero. There is no wondering where your money went.

So, give it a shot. Take full and complete responsibility for the success of your budget (is the most important thing you’ll ever do for your money).

Here’s Exactly How to Do A Zero Based Budget This Week

Want to know what the heck is a zero based budget? This post will give you all you need to know about zero based budgeting, so you can go and create an insanely organized zero based budget on your own.

So, What’s A Zero Based Budget?