Money Management

The Best Budget to Keep You From Living Paycheck to Paycheck

I have tried many budgets to try to get me to stick to one without much luck. I always made excuses to where the money for a purchase would come from, like I worked some overtime this week so I can afford this. Wrong!! Yea I could buy it but I could make better use of my money.

I then discovered the Zero Based Budget, and my life changed forever. Not really, but it did change my opinion on budgeting. A Zero Based Budget is basically assigning all of your income to a category to make the remaining amount equal zero. What I do is just make a base income, which would be the minimum I would take home a month not including overtime because that’s never guaranteed. So here’s my sample budget:

Zero Based Budget

Each category I based to projected portion on past months and made it the highest possible number it could be without being overtly wrong. As the month goes by on a separate sheet you just jot down the expenses that go into variable categories like entertainment or eating out. Always remember to plan for special occasions for instance, if you’re going to a birthday dinner or something, be sure to adjust your budget accordingly.

At the end of the month all you do is add everything up and then all of the extra money can go towards your financial goals/savings. I think this helps because you can actually see where your money is going vs. where you think its going. Also, because you get to see the savings you made at the end of the month by watching your money.

Do you have any budgeting tips that work for you?

 

Comments (9)

  • I just did my zero based budget yesterday and was $2 off from what was in the bank to what I had to spend. So I adjusted until it was 0. And from it, I think I will end up with an extra $127 to throw into my savings or my debt. Woo Hoo!
    .-= Christine | Money FunkĀ“s last blog ..Money Funk goes Comic =-.

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    • Yea, I’m a fan because I know any extra money I have coming in can go straight to savings

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  • This is a great idea and super simple too. I wish I could get my sister to do this. I’ve been trying to get her to put together a budget for the past three years,… no joke!! Thanks for the post, Kevin!

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  • I am a big fan of the zero based budget too! That’s how we do it; too much extra and it simply gets frittered away.

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    • Exactly KISS

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  • Great Post. This can be the first step for personal finance
    Also Mint.com gives you a visual look at how you spend money

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  • I just set an amount per month at $1000/month to spend as a guideline and I try to stick to it. If I go over, I don’t cry, but I try to remember it for next month.

    Then I bank the rest.

    I do this because I’m a freelancer and some months I don’t work, so my income is $0 and I can’t save what I don’t have.

    My overall goal this year was $20,000 for the whole year for personal expenses.

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  • […] to continue. There are a lot of different types of budgets out there. My personal favorite is the Zero Based Budget because it accounts for every dollar.There are also lots of computer/online based options, that […]

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  • I do have a question regarding the zero budget.
    some of my friends use the envelope system. using your zero budget as an example,
    they would make separate envelopes for each category and actually deposit the cash accordingly. I like the idea but already question how I would keep myself on budget without a certain tracking system in place.
    How do you keep track of the budget?
    .

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