How To Create A Zero-Based Budget


Do you ask yourself, where does my money go? Are you in debt? If you answered yes to any of these questions, don't worry, you are not alone. The average person is in debt, spends money in a heartbeat, is scared to check their bank account, but most importantly doesn't have a zero-based budget.

But what is a zero-based budget?

A zero-based budget is pretty simple. It is a way of budgeting where your income minus your expenses equal zero. For example, if you make $2,000 a month, you want the total amount of what you budget to equal $2,000. Every dollar gets a category!

Here are 3 steps that will help you create a zero-based budget that works for you.

1. Choose your platform

Should a budget be on software or paper? The answer to this question depends on the person. I use the EveryDollar app because it's easy for me to make changes. However, a budget on paper may be easier for someone else.

If you are thinking of using some sort of software for your budgeting here are some that I recommend:

2. Track your spending

This step is the most important, because it shows you where your money is going.

Write down your income

Whether you are using paper or software for your budget, you should write down your income. Your income should include any cash that you bring in each month. This income can be your paycheck, side hustle, or child support.

Write down your expenses

You want to write down all your expenses. Here are some common expenses:

  • Housing: (mortgage, water, gas, electricity)
  • Transportation: (Auto gas, oil, any car repairs)
  • Food: (Groceries, Dinning out)
  • LifeStyle: (Holidays, Birthdays, Haircuts etc.)
  • Insurance/Tax: (Health, Life, Auto etc.)
  • Debt: (any debt that you owe)

Subtract income from expenses

Now you want to subtract your income from your expenses so that it equals zero. If it doesn't equal zero right away, don't worry. Lower some of your expenses until you get it to equal zero.


Discipline is needed here. For every transaction you make, go to your budget and record what you spent. At the end of each month, compare your spending results with what you planned for each expense.

3. Adapt

Let's face it all things don't go according to what you've planned. You might have a career change, or your expenses may change. Whatever the situation may be, you should adapt and adjust your budget, so that you stay in control of your money!