• About Me
  • Disclosure
  • Shop

Making Cents Matter

  • Home
  • Resource Library
  • Budget
    • Budgeting Tips
    • Our Monthly Budget
    • Meal Planning
    • Free Printables
  • Debt Free
    • Debt Free Tips
    • Our Debt Free Journey
    • Free Printables
  • Saving
    • Ways We Save
    • DIY
    • Free Printables
  • Recipes
    • Recipes
      • Breakfast
      • Lunch
      • Dinners
      • Instant Pot
      • Slow Cooker
      • Soups
    • Meal Planning
    • Preserving Food
  • Garden
    • Gardening Tips
    • Preserving Food
  • Shop

December 15, 2017 · Leave a Comment

Zero Based Budget

This post may contain affiliate links for your convenience.
Click here to read my disclosure policy.

Budget· Budget Tips· Debt Free· Debt Free Tips· Printable

1.6Kshares
  • 1.6K

When beginning to budget in order to reach financial goals, you’re encouraged to start with a zero based budget.  But there’s a lot of confusion around zero based budgeting.  One of the most common misconceptions, one that even I was guilty of, is that you are constantly bringing your account down to zero.  I’m here to tell you that’s simply not the case!

Zero Based Budget

Since starting a budget and sticking to it, our bank account no longer goes to a $0 balance.  I keep our checking account with a small buffer in it in case we have any math errors, or all the bills and expenses over the course of our paycheck are taken out of our account all at once.  And our savings accounts have plenty of money in them as well for our sinking funds and emergency fund.

Simply put, even though we follow a zero-based budgeting method, our bank accounts are not at a zero balance.

So What Is A Zero Based Budget?

As I mentioned earlier, a zero-based budget simply means that you give every penny that comes in your bank account a purpose.  By giving your money a purpose, you are controlling your money, rather than letting your money control you.

So when your paycheck comes in, you account for any bills, savings, and spending money that will get you through until the next time you get paid.

Zero Based Budget

When I started put our finances under a fine-tooth comb, I was zeroing out our monthly budget rather than our weekly paychecks.  What I found was that as the month went on, it became hard to allocate smaller, necessary expenses throughout the month.  When we had scheduled snowball payments at the beginning of the month, it became especially frustrating because I would allocate a larger payment based on no smaller expenses.  We would end up dipping into our checking account buffer, and I would never replenish the buffer.

After repeatedly doing the same type of budgeting, I realized we had to make a change.  So I switched to a per paycheck zero budgeting system.  This makes it easier to account for smaller expenses throughout the month without dipping into our checking account buffer, and makes sure we still zero out our budget at the end of the month.

How I budgeted then is very similar to the You Need A Budget* method.  Looking at your priorities and commitments between now and the next paycheck, and then zero it out.  It simplifies your budget, making it easier to stay on track towards your financial goals.

How To Start a Zero Based Budget

To help you get started with your zero based budget, I created a free printable for you.  It follows the exact same steps we started doing to help keep our debt payment optimized, yet allow room in our budget for extra expenses that came up throughout the month.

It has space at the top for a goal to reach during that specific pay period, as well as a notes section at the bottom to keep track of any reminders.  I personally use the goal section to note how much money can go to debt during that paycheck.

I included multiple spaces under each headline in case you have multiple streams of income, or are paid once a month and need to have all your expenses come out of a single pay.

 

Our Zero Based Budget

Every time Hubs is paid, I allocate every penny of the paycheck to: savings for that pay period, bills that are due between this paycheck and the next, and then spending money needed {such as cash, fuel, etc} until the next paycheck.

For example, his pay is fairly consistent, but can vary a bit within the change from week to week, and weeks with a 5th paycheck are about $12 more than usual.  Every time Hubs is paid, I take the change and set it aside in a separate savings account that is allocated to holding our debt payment.

I also deduct our savings we need to put aside for the week in order to meet our savings goals, and any bills that are due between the current paycheck and the next.  I always budget bills on the high end rather than on the low end.  This way, when the bill is higher, I’m not digging into other areas of our budget for the month.

Zero Based Budget

As the week progresses, I revisit our weekly budget.  Sometimes a bill is lower than I estimated, or I don’t spend our weekly budget on fuel.  Or, as in the past, I have some small expenses come up that weren’t originally budgeted for.  So for this particular week, I budgeted $76 for our landline & internet bill, but it was only $75.72.  The remaining $0.28 went to debt.

Zero Based Budget

As you can see in my example from above, any money that is left over is not allocated as “free money”.  It still has a purpose, and it’s purpose is to be paid on debt.  On this particular week, to zero our our budget, I had $134 left from the paycheck.  That went straight into our debt payment for the week, along with the overage from our phone & internet bill, and what I didn’t spend in fuel for the week.

After our debts are paid off, the leftover money would still have a different purpose.  Some examples include:

  • Savings
  • Sinking Funds
  • College Savings
  • Down Payments for a car or a house

Whether $0.20 or $200 is what’s leftover from your paycheck, it is given a purpose so your budget comes down to zero.

If you want to start your own zero based budget, but don’t want to go paper, I highly suggest You Need A Budget’s online budgeting software*!  It does come at a cost of $84 per year, but in my opinion, it’s well worth it!  If you’d like to try their method, you can get a free month of YNAB by signing up here*.  What’s there to lose?

Have you started your zero based budget yet?  How do you set up your budget?

Zero Based Budget

Related Posts

  • December 2018 Debt UpdateDecember 2018 Debt Update
  • 2016 Debt Free Progress: March2016 Debt Free Progress: March
  • Creamy Tomato SoupCreamy Tomato Soup
  • Chicken Tortilla SoupChicken Tortilla Soup
  • September 2016 Budget & Debt UpdateSeptember 2016 Budget & Debt Update
  • What I’m Planting In MayWhat I’m Planting In May
1.6Kshares
  • 1.6K
Previous Post: « Apple Peel Jelly
Next Post: Chicken Sammies »

Reader Interactions

Want access to our resource library? Sign up for our free email list!

* indicates required

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

CommentLuv badgeShow more posts

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

  • Email
  • Facebook
  • Instagram
  • Pinterest
  • YouTube

Post Categories





makingcentsmatter

makingcentsmatter
Only you can determine what your financial goals a Only you can determine what your financial goals are. If that means you're adding money to your savings account, or contributing to your retirement, while you are paying off debt, then so be it!⁠
.⁠
Do what looks right for you and your personal finances.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#budget #budgeting #savingmoney #savings #cashbudget #cash #cashisking #frugalblogger #frugalmom #frugalliving #financialgoals #personalfinancetips #personalfinance #debtfreejourney #debtfreecommunity #debtfreeprogress #makingcentsmatter #financialfreedom #debtfree
The trick to meal planning is to make it predictab The trick to meal planning is to make it predictable. But predictable doesn't mean the same thing week to week. You could have a chicken meal, a soup meal, a pasta meal, a leftovers meal, a family favorite meal, and so on.⁠
.⁠
We always try to go with themed days, but some weeks are so hectic the theme is literally "fast". Thankfully that hasn't been the case lately.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#mealplanning #mealplan #budget #budgeting #monthlyincome #savingmoney #savings #cashbudget #cash #cashisking #frugalblogger #frugalmom #frugalliving #financialgoals #personalfinancetips #personalfinance #debtfreejourney #debtfreecommunity #debtfreeprogress #makingcentsmatter #financialfreedom #debtfree
I can only hear about my extended warranty I never I can only hear about my extended warranty I never purchased so many times. 😣⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#makingcentsmatter #budgets #monthlyincome #debtfreecommunity #realbudget #savingmoney #payingoffdebt #savings #frugalliving #frugalblogging #budgeting #monthlyincome #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom
March Debt Paid numbers are in!⁠ .⁠ House: $51 March Debt Paid numbers are in!⁠
.⁠
House: $511.13⁠
Citi: $0 – this has a residual $3 in interest charges since payoff, due in April⁠
D NelNet: $100⁠
K NelNet: $100⁠
K Chase: $600⁠
Explorer: $336.27⁠
.⁠
Total Paid in 2021: $8,258.84⁠
.⁠
Extra Payment: There isn’t one this month since we were $25 away from zeroing out the budget for our February 15th monthly paycheck. That $25, and monies left from our January 15th paycheck, covered our OOP costs for Hubs’ filling. We also have some savings goals coming up that need to be met, making our debt payments a little lower for the time begin.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#makingcentsmatter #debt #debtfreejourney #debtfreeprogress #debtfreecommunity #realbudget #savingmoney #payingoffdebt #savings #frugalliving #frugalblogging #budgeting #monthlyincome #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom⁠
The battle for who can charge what tonight is abou The battle for who can charge what tonight is about to begin. 😬⁠
.⁠
My kids run off with my charger, plug it into one outlet 5 feet from where they found it like that particular outlet is the only one in this house, and then proceed to fight over who can charge their device first at night.⁠
.⁠
Then they get grumpy when it's their turn and it's not the proper input cable. #itwasmychargerfirst #dontlikeitgofindyourown⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#parentingteens #parentingtweens #momlife #realife #budget #budgeting #savingmoney #cash #frugalblogger #frugalmom #financialgoals #personalfinancetips #personalfinance #debtfreejourney #debtfreecommunity #debtfreeprogress #makingcentsmatter
A needs his wisdom teeth taken out. I've talked a A needs his wisdom teeth taken out. I've talked a bit in our February Budget Check-In about how much of this I think we'll owe, and you can check that out on my YouTube channel if you're interested, but I wanted to say here...⁠
.⁠
To the mother with little kids struggling to get your finances in order, it will get better. I wish I could have heard those words years ago.⁠
.⁠
Nearly 10 years ago we were facing a $1,400 out-of-pocket portion for A's Phase 1 orthodontic work (I looked it up after I uploaded the video... we had a $1,400 portion).⁠
.⁠
It was a lot of money for us at the time. Our kids were 6, 2, and 3 months old. I don't think we even had $500 in savings, and I just left a part-time teaching job because it wasn't paying the part-time daycare bill, so paying our portion in full was just a dream I didn't think was achievable.⁠
.⁠
I was even stressing about the monthly $100 payments. We were so strapped. It was our breaking moment to start cutting costs and budgeting more effectively. We've learned a lot in that time period.⁠
.⁠
What we've learned is that it does no good to stress about it all the time. Life happens. All you can do is try to plan ahead, and if it's something that's unplanned, readjust. It won't always be easy, especially at first, but it will be worth it.⁠
.⁠
Nearly 10 years later, we are still paying off our debts. Student loans suck. But I see this bill as a reminder of how far we have come. Seeing a bill like this doesn't stress me out like it used to, and I know we can easily create a plan that can get it done and out of the way.⁠
.⁠
Will it delay our debt-free date more? Yes. But it's not worth stressing over. Life happens, readjust, and continue on down the path. It's called a journey for a reason.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#wisdomteeth #personalfiannce #personalfinancetips #financialgoals #budgeting #budgets #savingsgoals #savings #cashbudget #zerobasedbudget #debtfreejourney #debtfreeprogress #adulting #lifehappens #realife #realbudget #makingcentsmatter
It's almost payday! Here's how our variable budget It's almost payday! Here's how our variable budgeting categories are working out for the pay month.⁠
.⁠
Food is looking good this far into our paycheck, probably because miscellaneous - which includes eating out - took a hit with unexpected purchases. Pet is low for this time of the month, and Household is spot on.⁠
.⁠
Fuel looks like it'll be lower than last month (yay for weeks of snow days & delayed school starts), and Therapy had one more appointment than initially planned.⁠
.⁠
Garden, Dental, Medical & Propane are not included in these estimates so far because those expenses are coming from sinking funds. Once we're done with the month and review the budget, I'll move over the total amount spent from those sinking funds.⁠
.⁠
How's your paycheck budget coming along?⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#realbudget #monthlyincome #monthlybudget #budget #budgetupdate #budgeting #savingmoney #variablecategories #savingmoney #savings #debtfreecommunity #debtfreejourney #cash #financialgoals #personalfinancetips #personalfinance #frugalliving #frugalblogger #budgetblogger #makingcentsmatter
Automating your finances makes saving money and bu Automating your finances makes saving money and budgeting more convenient, and therefore easier on you. Out of sight, out of mind, right?⁠
.⁠
What's one thing you can automate this week to make your finances easier?⁠
.⁠
Me? I'm going to set up our sinking fund transfers to automate every payday (the 15th of every month). Our bank set up a feature on their app where we can schedule savings transfers now, and I'm going to take advantage of it!⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#personalfinance #personalfinancetips #budgeting #budgettips #personalfinancemadeeasy #savingmoney #savings #sinkingfunds #cash #frugalblogger #frugalmom #frugalliving #debtfreejourney #debtfreecommunity #debtfreeprogess #financialfreedom #makingcentsmatter
Oh my word... our miscellaneous category has gone Oh my word... our miscellaneous category has gone a smidgen overboard this month!⁠
.⁠
I foresee a goal for March's paycheck to at out less than twice. That's where this category went awry. $99.16 of it went to eating out. 😑 Some of it was avoidable, but not all of it. Having to drive to multiple appointments in one day during snow squalls and rearranging our whole day was one of those unavoidable instances.⁠
.⁠
Tracking our expenses - much like a budget review - is vital to sticking to your budget!⁠
.⁠
.⁠
.⁠
.⁠
.⁠
.⁠
#makingcentsmatter #debt #debtfreejourney #debtfreeprogress #debtfreecommunity #realbudget #budgetcategories #monthlyincome #savingmoney #savings #frugalliving #frugalblogging #budgeting #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom #expensetracking #budgetfail
Load More... Follow on Instagram


Copyright

I love it when you share our content! Please keep in mind that all content, images and text on this site are property of Making Cents Matter. Feel free to use no more than two photos on your own site, provided that a link back to my original post is included. Do not crop, edit, or remove any watermarks from any of my images without obtaining written permission from me first. Thank you!

Privacy Policy & Disclosures

MakingCentsMatter is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and other affiliated sites.

You can read more about our privacy policy and disclosures here.

Copyright © 2023 · Captivating Theme on Genesis Framework · WordPress · Log in