A Detailed Guide to the Zero-Based Budget


I launched FinanceSuperhero in April 2016 to help others save money, get out of debt, earn more money, and live the best life possible. Send me an e-mail or a comment if I can help you in your journey. Thanks for reading!

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10 Responses

  1. Sarah says:

    What do you recommend doing when your spouse does not have the same desire to budget?

    • Hero says:

      Sarah, that is a great question. I am going to assume that you are fired up and ready to get started budgeting. First, hopefully your excitement will be contagious. Second, I recommend having your spouse read my post on the Five Reasons Everyone Should Have a Budget. Specifically, ask your spouse to watch some of the Debt Free Scream videos within the post. If that doesn’t get him pumped up and ready to get started on a budget and maybe even go run a marathon, I’d be surprised!

  2. Anders says:

    Hey, Hero!

    Thank you for this post, very good in-depth information.

    The zero-based budget is the one that works best for us in our family. We’ve had different kinds of budgets in the past, mostly traditional budgets. The problem we encountered with those budget was that sometimes, we had money left at the end of the month. That money didn’t have a place in the budget so it was often it magically became free-to-spend-money – instead of something smarter, like savings.

    Now we’re using a zero-based system where we live off last month’s income. If something is left in one category at the end of the month, it’s put into the account we use for paying the coming months expenses. And, we’re also paying ourselves first. So we’re using quite a mix of different tactics. But, it works! And that’s the point, right? 🙂

    Thanks again for taking the time to write this post Hero, good and extensive information.

  3. Very informative. I have personally been doing this for years, but did not know it had a name. It is best to allocate all of your expenses and then be able to see what is leftover for savings. If it is not high enough, I cut other places.

    I also do the budget based on gross income and include the taxes, and employer withdrawals. If we skip looking at taxes, then the government has the potential to be getting a free loan from us, which is unacceptable. I look to minimize the taxes withdrawn throughout the year to maximize my investment money. It also helps to look into the 401k contributions and health insurance deductions that your employer may make.

    For budgeting, I use Gnucash which is an open source alternative to Quicken. Using that I have the most in-depth look at my finances.

    Thanks again for the in-depth look at 0 based budgeting.

    • Hero says:

      Justin, thanks for sharing your budgeting approach. I’ve always budgeted based on after-tax income, but I can see that it could be valuable to calculate the numbers based on gross pay as well.

      I will have to look into Gnucash – I had never heard of it until now!

      • Gnucash is a very interesting piece of software that is definitely written for accountants. I am an engineer, but taught myself accounting through the use of Gnucash. Gnucah has excellent tutorials that go through the basics of accounting and how to use the software.

  4. Patty Colaprico says:

    Awesome!!!! Thank you

  1. July 7, 2016

    […] with my actual spending (leftmost column) at the end of the month. In fact, despite projecting a zero-based budget, I spent more money than I earned in September […]

  2. September 4, 2016

    […] Check out Penny’s post on charitable giving and David’s (aka Finance Superhero) post on how they build giving into their zero-based budget here. […]

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