Zero-Based Budgeting (ZBB)

Budget smarter, not harder with Zero-Based Budgeting Method!

Money, money, money! It’s all we ever hear about these days. And let’s be real, who doesn’t want a little extra jingle in their pocket? But, what do you do when your expenses keep going up, and your income stays the same? Well, that’s where zero-based budgeting (ZBB) comes in!

“I work all night, I work all day to pay the bills I have to pay, ain't it sad? And still there never seems to be a single penny left for me, that's too bad.”

What is Zero-Based Budgeting Method?

ZBB is a budgeting method where you start from scratch each month and allocate every dollar you earn to different expenses. Instead of just looking at how much money you have left over at the end of the month, you take a hard look at each expense and determine if it’s necessary or not. If it is, you allocate a certain amount of money towards it, and if not, well, goodbye expense!


In a simpler way of putting it, if you earn $2,000 a month, then you must spend $2,000 (yes, savings and investments included).

How to Apply Zero-Based Budgeting?

Determine Your Income:


The first step to ZBB is to determine your total income for the month. This includes your salary, any side hustle money, and any other sources of income. 


What if you have irregular income? You can still apply this method by taking the lowest income you had in like – past 6 months, and use it as a rough estimate. Once the payments start to kick in, you can adjust the outcome later.


List Your Expenses:


The next step, which is also one of the least favorable part of the process, is to list out all of your monthly expenses. This includes necessities (bills, groceries, transportation, etc.), savings, essentials (childcare, health care, etc.), leisure and more – simply every single way you envision your money to go.


It can be time-consuming, tedious, and tiring. But once you’re done, you’ll be glad you did it in the first place.


What about unexpected expenses? The easiest way to handle that is by allocating it under ‘emergency expenses’ or ‘miscellaneous’, and in terms of how much to spend, you  can take the average amount of unexpected expenses you had in the past few months and put it as your benchmark.


Allocate Your Money:


Now it’s time to allocate your money to each expense. Be sure to prioritize necessary expenses like rent and utilities before allocating money to less important expenses. If you have leftovers, allocate some for unexpected expenses and investments.


Review and Adjust:


At the end of the month, review your budget and adjust it as necessary. This way, you can make changes and improvements for the following month.




By the beginning of each month, you will have to start fresh again, calculate your income, draw your expenses, put the money where it belongs, review, adjust, and repeat!

Pros of Zero-Based Budgeting Method:

Increased Savings:

By allocating every dollar you earn, you’ll have a better idea of where your money is going and how much you’re actually saving each month.


Better Spending Habits:

ZBB forces you to look at each expense and determine if it’s necessary or not, which can lead to better spending habits in the long run.


Improved Financial Planning:

With ZBB, you’ll have a better understanding of your financial situation and will be able to make better financial planning decisions.

Cons of Zero-Based Budgeting Method:


ZBB can be time-consuming and requires a lot of effort in the beginning, but once you get the hang of it, it’ll be a breeze!


No Room for Spontaneity:

With ZBB, every dollar is accounted for, leaving little room for spontaneous expenses or treats.


May Seem Restrictive:

For some, ZBB may seem too restrictive and may cause stress. However, once you see the positive impact it has on your finances, you’ll be singing praises!

Bottom Line

In conclusion, zero-based budgeting is a budgeting method that requires a lot of effort and dedication but can lead to improved spending habits and increased savings. It’s a budgeting method that’ll make you scream “Well, that’s worth it!”

So, why not give it a try and see how it can help you reach your financial goals? Who knows, you may just fall in love with ZBB and never look back!

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