Zero-Based Budgeting for Beginners
If you constantly wonder clearly "where did all my money go?" at the end of the month, zero-based budgeting might be the answer.
What is Zero-Based Budgeting?
The concept is simple: Income - Expenses = $0.
This doesn't mean you have zero dollars in your bank account. It means every single dollar you earn is assigned a job.
- $1500 for Rent
- $400 for Groceries
- $300 for Savings (This is a "job" too!)
- $100 for Fun Money
If you earn $2300, and your plan adds up to $2300, you have succeeeded. You have $0 left unassigned.
Why It Works
Most people pay bills and spend whatever is left. Zero-based budgeting flips this. You decide where money goes before you spend it. It turns saving into a non-negotiable expense rather than an afterthought.
Using ExpenTrace for Zero-Based Budgeting
In ExpenTrace:
- Go to the Budget tab.
- Create categories for all your expenses.
- Adjust the limits until your total budgeted amount equals your expected income.
When "Remaining to Budget" hits $0, you're done planning. Now just stick to the plan!