Key to Financial Success: Zero Balance Budgeting


At some point in your life most of us have heard the word “budget” being thrown around. If you are like me, most of you have likely been abused by that word. It used to be that when I heard the “B” word a few choice sentences come to mind:

“You can’t have that! It’s not in the BUDGET!”

“You would have your life together if you just did a BUDGET.”

“You should REALLY do a BUDGET.”

I remember sitting down and doing my very first budget in my early 20’s, and like most young people in their 20’s, I thought I knew everything on how to create a budget. Boy was I wrong. My budget had plenty of holes in it. I would account for how much my bills would be and then hope that I made enough to pay for all of them that month. It was a very reactive approach and it lasted for about a year before I gave up on it.

My second budget was created with help from my parents a couple years later. I was in tears and in crisis. I wasn’t making enough to cover my bills, credit cards, student loan payments, car payment, and a cash advance I had taken out. So, the decision to move out of my apartment and back in with my parents was made. We sat down with a legal pad and hammered out the details of where my paychecks were going to go.  At the end of our planning session, I felt hopeless. I had just enough coming in to pay all my bills with $100 left over for any extra/unforeseeable expenses.

Now I had a plan. Yet, I still felt as if I was living on the edge. At this point I had no emergency fund in place and at the rate I was going I would have my debts paid off in the next 25 years. Talk about a real downer. 25 years of servitude meant I wouldn’t be able to start thinking about saving for anything until I was into my 50’s! I felt stuck, but didn’t let anyone know. I continued to suffer in silence until the fateful day that I visited a friend in Texas.


While visiting Texas I was invited to go to Financial Peace. A class taught by the financial guy Dave Ramsey. The class was on dumping debt, and an hour and a half later, I was hooked. It was as if my eyes had been open to a completely new lifestyle that I had no idea existed. For the first time in a long time, I had hope for my financial future and was motivated. A month later, I found out how to use a Zero Balance Budget, and to this day continue to use one.

So what is a Zero Balance Budget?

Quite simply it is a budget that you do before each month begins (so if it is April, then you do your budget for May at the end of the month) where you allocate (or spend) all of the money you are going to make for that month on paper.

For example:

Say you make $2,500 a month in take home pay. You would write out that amount at the top of the page. Then you would make a list of your ALL of your expenses and allocate your check until you have spent all $2,500. Included is an simple example below:


Your first budget is not going to be perfect. In fact, your second one isn’t going to be much better. But don’t worry. The budget you make is not set in stone, and because life happens, it is constantly in flux. So you WILL have to make changes as the month goes on. I did. My friends who budget had to. My fiance is going to have to once we get married (yup, she’s not excluded from budgeting)!  After awhile you will get the hang of it and eventually it will only take you 5-10 minutes each month!

You will start to relax a little. I can still remember the feeling I had when I realized I had enough money to keep the lights on AND eat! Such an amazing calm came over me that I could start to focus on other things in my life like work, friends, and even play! If I can do this, I know you can too!

Summary: budgeting is key to financial success. The Zero Based Budget is by far the best way that I have found to help keep track of expenses and to be intentional with your paychecks. It can restore your sense of control and purpose in your life and it is worth the time you put into it each month. It takes about 3 months to get decent at it, so give yourself some grace when you make changes!

7 thoughts on “Key to Financial Success: Zero Balance Budgeting

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