How to create a Zero Based Budget
Do you ever feel that you have too much month left at the end of the money? I know I did before I started getting control over my money and telling it were to go instead of at the end of the month just wondering were it all went. When you have control over money, i.e. Doing a budget, you can squeeze every last penny out of your income to help pay down debt, build your emergency fund, save for vacation. You can do whatever you want with it. It is quite an amazing thing. Read on to learn how to do this.
A Budget? Are you kidding me?
I know the thought of a budget can see overwhelming for people but if you really want to have control over your money rather than your money having control over you then you need to have a budget in place every month. The way you do that is sit down or with your partner if you are married and spend all the money that is going to come in that month intentionally on paper. Ok, sounds great and easy, right? well it is but it just takes time and discipline to get good at it.
Zero Based Budgeting
The whole idea with the zero based budget is that at the end of your budget you have the number 0 ! wow sounds complicated right? well not really. So we are going to list all of our expenses and income on this sheet of paper. So for example if we have a total monthly take home pay of 2,000 First we will have:Charity - $200
Rent - $500
Gas - $100
Clothing- $40
Groceries-$200
Dining - $60
And you keep doing this till you have spent all of the $2,000 for that month. This is called a Zero based budget
Zero Based Budgeting
So by now you should have all your monthly expenses on paper and also your monthly take home pay, the money that is left AFTER TAXES! You have met with your partner and are in agreement over this contract called a budget. This is a contract. You can only spend what is on this paper. If you come across something in the month that you need to change you need to meet again with your partner and take another account down a bit to raise another account. So if you need more grocery money you may need to take some out of the entertainment account. It must equal Zero at the bottom. All of your monthly expenses minus your take home pay must equal Zero
Zero Based Budgeting
Don't Give Up
You may be saying, I've tried this before and it just doesn't work for me, I gave up. Studies have shown that it takes the average person 3-4 months before this starts working for them. I know of some people that it has even taken 6 - 11 months before they finally get it. Don't be discouraged. Keep trying because in the end it is so much better for you to have control over your money than for your money to have control over you.
Here's my favorite link:
by theorbital
My wife and I have been doing a zero based budget for just about 2 years now. I will tell you personally that it was the best thing we ever did for ou... (more)
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