The Zero Based Budget

RateState put together a free “zero based budget” excel sheet which you can use to get a handle on your personal finances. The idea behind it is that every single dollar you earn will get allocated to a specific category. There is no money sloshing around, you have total mastery over all of your money.

The template comes with a lot of categories set up, so plug in your numbers and create or delete slots as necessary.If you have a positive difference after taking care of expenses, allocate to paying down debts or to savings or to an investment. If you have a negative difference, then you need to reduce non-essential items.

The key is to have no money left over at the end, to know where every single penny is going, even if it’s going towards CDs or bubble gum.

Download Zero Based Budget (XLS)

Free Budgeting Tool [RateState]


Edit Your Comment

  1. jamesdenver says:

    Looks complicated and time consuming. After allocating your 401k, savings, bills, and weekly personal spending cash why not just put the excess into savings?

  2. BrockBrockman says:

    @jamesdenver: Putting together an effective budget tends to be complex and time consuming.

  3. jamesdenver says:

    I agree. If you are sloppy at tracking your spending well it would definitely behoove you to keep close track of every penny.

    But if your follow the golden rule of “spend less then you earn”, you really DON’T need to keep track of lattes or new pants at Deisel AFTER you pay your bills and pay yourself. Unless you’re trying to plug leaks.

    By the way I don’t see a category there for “massive credit card debt” which in my opinion trumps savings, charity, and emergency funds.

    just my opinion :)

  4. warf0x0r says:

    This would be useful if my Companies payroll didn’t have 26 pay periods per year instead of 24 like every other normal company ever… *sigh*

  5. filmsnack says:

    @warf0x0r: or if you got paid more than once a month. Which is something of a challenge, I must admit.

  6. thepounder says:

    I too get paid 26 times per year. Fine by me because I used those “extra paychecks” to sometimes buy things I’d like but wouldn’t normally get.

    I’ve never really been able to adapt myself to using things like this spreadsheet to track my budget. I’ve actually grown accustom to keeping any receipts I have from each day and deduct them from my post-bills-paid balance. I only use my current pay as my starting point, and I typically round up (something like an $11.27 lunch becomes a $12 lunch) to not only make the math mucho easier but it leaves a touch extra left over each pay period. I’m sure some folks would disagree with this method, but it has worked well for me over the years.

  7. get hold of some more of Dave Ramsey’s stuff, eh? Anyway, we use something similar to the zero-based idea, but if we get under $10, that’s good enough. My time is more valuable to try to shove $8.46 into savings then using the debit card for a taco and having to redo the whole thing…

  8. Charles Duffy says:

    This isn’t a new idea, or anything remotely approaching one. See “double-entry accounting”; it dates back to to 1490s.

    I use GnuCash (yup, it’s available for Windows now… yaaay, Free Software!), and it works this way out-of-the-box.

  9. drjayphd says:

    @jamesdenver: Yeah, this seems to be making quite a few assumptions… namely, that the user earns a living wage. ;) Kind of depressing when the household income is double one’s actual salary…

  10. anatak says:

    This looks like a cleaned up version of the spreadsheet we use. Zero-based budgets are tough for the first few months, but only because its unlikely that you realize how much you are spending on what. After that its pretty easy. This method is great because if you don’t give your money a name and purpose, it will leave you and you’ll have no idea where it went. This method won’t let you do that.

    @jamesdenver: I’ll argue that you need to know how much you make, as well as how you’re spending it each month to know what you can afford and if you are indeed spending less than you earn before you spend it. Also, this order is correct. “massive credit card debt” comes after savings, charity, and emergency funds. Your order is partially why we have so many people in massive credit card debt and no savings – because they have their priorities out of whack.
    > You need to be giving 10% off the top, especially if you are Christian. Either way, if you can’t make it on 90% of your income, then you won’t make it on 100%.
    > Savings MUST be made a priority or you will never do it. Pay yourself first.
    > Emergency Fund MUST be a priority also, when you are building or replenishing it. Not always a line item.
    > After that its necessities – Shelter, food, transportation, utilities
    > Credit card debt is an “above or below the line” line item. If there is enough money left over then you are above the line and you get paid. Otherwise you are below the line and you don’t get paid. Even though they may say they can, a credit card company can’t repo your car or foreclose on your house. Its much better to be current on your mortgage than to be current with Visa.

    • HogwartsAlum says:


      I don’t NEED to give 10% to anything. Paying down my debt would come before that. Tithes are not mandatory and I don’t go to church anyway.

  11. forever_knight says:

    @anatak: “You need to be giving 10% off the top, especially if you are Christian. “

    for everyone else, the rate is 15% on the middle third. you know, just because you want to be viewed separate from christians.

  12. rouftop says:

    [] has a great zero-based budget that my wife and I have been using for a few months. It’s hard to learn the paradigm but once you do you do gain a lot more control over your financial life. Highly recommended. (No, I’m not a shill.)

  13. dangerp says:


    I would have to disagree in principle on the credit card vs emergency fund argument. If you don’t have an emergency fund, and something unexpected happens (car breaks down, unexpected medical bills, etc), then guess where you are going to have to get the money from? That’s right, you can borrow from the heaping mound of credit card debt. For a lot of people, the absence of an emergency fund is exactly why they are in debt.

    Of course, that is just the way I look at it. There are as many ways of handling your money as there people who have money, and who’s to say which one is the best? This one’s cool, but another, newer, shinier one will come out that will have everyone switching again.

  14. hexychick says:

    For someone like me who lives paycheck to paycheck, has a tiny 401k allocation, needs to track spending, and also needs to save, I have to say that using my bank statements along with this budget tool has helped me figure out exactly what I spend where. Now I know what I can put into savings or an emergency fund whereas before I didn’t have a clue so I didn’t. (Yes, I know, very stupid… that’s why I’m starting now.) I can already tell that this is something I’m going to use every month to keep myself in order. I think it’s very useful if you’re far from perfect and do not have a grasp on this stuff.

  15. HogwartsAlum says:

    Thanks for posting this spreadsheet. I emailed it to myself and will go over my budget this weekend. I need to begin paying student loans (they’ll just have to take what I can give them at this point).

    I wanted to do this but wasn’t sure where to start. The old Money program I have on my desktop is kind of confusing. Not sure if it would run on my laptop anyway, since it’s so old.

  16. kexline says:

    Neat. I just did a spreadsheet very similar to this last week to figure out whether I could handle a big unexpected expense that’s come up. I didn’t exactly think of it as a budget, but keeping up with that spreadsheet daily has motivated me to eat out less and walk past great deals on things I don’t need right this minute.

    I want to continue using the spreadsheet in the future, but wasn’t sure the idea could be rolled over from month to month. I’m very happy to see some guidance that could help me figure out whatever it is I don’t get about the ongoing process.