zero-based budgeting?

JC Rodriguez
June 04, 2024

Here’s the exact way that I budget:

DEFINITION
Zero-Based Budget

A Zero-Based Budget is a budgeting method where your income minus your expenses equals zero. Every dollar you earn is assigned a specific purpose, such as bills, savings, or investments. This means you plan out where every single dollar goes before you spend it, ensuring that you are in control of your money and that no money is left unaccounted for. This method helps you manage your finances effectively, avoid overspending, and ensure that your financial goals are met.

Here’s how it works:
1. List Your Income: Write down how much money you make each month (like from a part-time job or allowance).
2. List Your Expenses: Write down everything you need to spend money on, like school supplies, snacks, or entertainment.
3. Assign Every Dollar: Make sure every dollar you earn is assigned to something on your expenses list. If you have $100, you might decide $20 goes to snacks, $30 to savings, $10 to school supplies, and so on.
4. Adjust as Needed: If something changes, like you get extra money or an unexpected expense comes up, you adjust your budget so every dollar still has a job.

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