Make A Budget That Leaves You With No Money

Budgets are supposed to leave you money left over, right? Well, the zero-based budget takes the opposite view, and thinks you should allocate every single dollar from every paycheck so that you’re left with nothing. Well, nothing that you don’t know what you’re going to do with. The allocation can, and probably should, include savings, for example. Getting Finances Done shows you how to get started with this budgeting technique that can save you time, headache, and yes, money. To jumpstart things, here’s a spreadsheet template you can use.

How to create a zero-based budget [Getting Finances Done] (Photo: riot jane)


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  1. KStrike155 says:

    Oops, I’ve been budgeting with no money leftover for the past 9 months. I thought that’s how you were supposed to do it?

  2. ckaught78 says:

    The word budget has such a negative connotation. My financial planner and I like to refer to it as a spending plan.

    • wesa says:

      @ckaught78: I don’t think it has a negative connotation at all.

    • Traveshamockery says:

      @ckaught78: The word “death” has such a negative connotation. My mortician and I like to refer to it as “blinking for an exceptionally long period of time”.

      • SadSam says:


        We use a spending plan in our house, but it also has a major differences from a budget (allocate certain funds for certain budget categories, i.e. $300 a month for groceries).

        Our spending plan works as follows. We pay all fixed and semi fixed costs twice a month (i.e. mortgage, utilities, service providers, escrow savings for annual and semiannual payments, anything with a bill), we also move money to savings (our 401k savings is deducted prior to pay day) for long, mid and short term goals (other retirement, car replacement, vacation, home improvement, fun, gifts, etc.) and we each receive a set amount for variable expenses (groceries, gas, personal expenses, non holiday gifts, entertainment, eating out, etc.) which we term allowance. So all our money is allocated except for allowance and the allowance money can be spent as either of see fit but when the money is gone you have to wait for the next pay day.

        • Mange says:

          @SadSam: That is EXACTLY how we do it in my house. Crazy. It works very well, though. But I don’t call it an “allowance” since I don’t think that would go over very well with the old man. He’s already cranky enough that I take care of all the finances.

  3. Firethorn says:

    I laughed a bit – what’s on the budget list?

    ‘Cushion Account’ – IE excess! They simply renamed it, and made you keep track of it.

    Personally, I keep a cushion fund – if I don’t spend the money that month, it goes to savings. By ‘spending the money’, I mean something like semi-annual car insurance, home insurance, filling the propane tank, etc… Something necessary.

    • Traveshamockery says:

      @Firethorn: It really is semantics for most people who just dump any budget excess into savings. I personally do the “zero budget” myself, but just because I like the feeling that the money has a task instead of just hanging out.

      • floraposte says:

        @Travishamockery: Yes, I’m starting to do that and I like it. I have a specific amount as an expenses cushion and then a list of larger elective costs (things I want to buy, things I want to get fixed) that I pull stuff off of when there’s enough to cover it.

    • Anonymous says:

      The cushion account actually isn’t just the excess. This is designed to be money that covers SMALL unforeseen expenses. It should be limited to a certain dollar figure, not just whatever is left over. This actually helps you limit your small non-planned-for expenses while giving your budget a little less rigidity.

  4. Ayrk says:

    The zero-based budget changed my life. Through it I got out of debt and now have a substantial emergency fund.

    Basically by allocating your money it eliminates the need to make pressured decisions when spending money. If you have money for it allocated in the budget, you buy it, if not, don’t.

    For those business majors out there, it is simply a statement of cash flows.

  5. FatLynn says:

    This is way too much for me. If I really had to check a budget every time I wanted to grab a soda from the vending machine, I would pull my hair out. I can’t plan my “slush fund” that closely, and if you work hard, you deserve the splurge from time to time.

    • floraposte says:

      @FatLynn: Sure, but some people–a lot of people, I’d say–do something because they deserve it without realizing that they can’t afford it. Most of us can’t afford everything we deserve :-). A budget can help you realize that, and to remind you that you also deserve not to be in debt.

    • Robobot says:

      @FatLynn: Some people just need that much discipline. People like you and me have a good enough sense of our financial situations and enough self control to know when to spend and when not to, but not everyone is so lucky. I think that for the right person, this could probably revolutionize the way they spend money for the better. (For everyone else it would just be a huge pain in the butt.)

    • realserendipity says:

      I do the zero based budget and have not once ever checked the budget before using a vending machine. Our household budget includes an allocation of “blow” money that DH and I take out in cash. Its money that we can use on our to buy whatever we want without having to check in on each other.

      • ophmarketing says:

        @realserendipity: How much are you allocating for blow these days? I’d think that could really drain the account quite fast.

      • FatLynn says:

        @realserendipity: That makes sense, but if there is some leftover at the end of the month, does it go into savings? If so, you aren’t really doing a “zero-based budget”.

        • realserendipity says:

          @FatLynn: Not sure about other budgets but in my situation, any extra in categories such as car, groceries, and the “blow” funds just remain in the envelopes until the next month. In the beginning there was alot extra and we had to readjust accordingly. Extra grocery money goes to stocking up on goods, car funds are saved for tires, oil, etc., and the blow fund is saved up for more expensive fun purchases that arent really neccesary.

  6. KittensRCute! says:

    I actually had MANY problems maintain a budget, until i started doing this. it really is NOT for everyone but it really has mad a major and positive difference in my life.

    • oneandone says:

      @KittensRCute!: Same here – though I had no idea it was called a ‘zero-based budget’. I made a spreadsheet of all my income, expenses, debts, obligations…. and realized things were not good. So I started paying the debts & obligations first, and planning how I should spend what was left over, and then I put together a more rigid plan.

      Turns out I could have found a more organized system online and saved a few months of trial & error – but maybe working through the mindset helped me out in the end.

      Regardless, it’s a useful tool – especially if like me, you tend to treat yourself to something modest, forget about it a week later, treat yourself again…. and then at the end of the month wonder what the hell happened. If you can remember what you spent, it might be less useful, but it was a lifesaver for me.

  7. Brazell says:

    @Travishamockery: Clever.

  8. realserendipity says:

    I am a Dave Ramsey follower and the zero based budget totally changed my mindset on budgets. There is room for some fun stuff in the category of “blow” money where we withdraw cash for use however husband and I see fit but for everything else, there is a plan. Its amazing how much more money we have this way. It just made us more concious of spending.

    • lindyman77 says:

      I thought I sensed that when you said “blow” money. My wife and I are Financial Peace graduates and used his zero-based spending plan very effectively. We’re now debt free with a 3 month emergency fund in place. Also FatLynn, you don’t have to check a budget “every time you want to get a soda from the vending machine” because of the Blow money category that realserendipity mentioned. It’s designed for you to blow it on whatever you want as long as you have the cash set aside to do it.

      • realserendipity says:

        I think I can honestly say that FPU was the best financial thing I have ever done in my life. Also as a newlywed, its prevented the money fights from ever happening because we are always talking about it. Its good to feel in control of the money instead of feeling like it controls me.

  9. synergy says:

    I think this is what I do. I put all my purchases on one CC that gives me rewards and when I get my monthly pay close to the due date on the CC, I pay that off figure out what gets auto-paid on the bank card, add a small no-we-don’t-take-plastic cushion, and everything else goes into savings.

  10. stands2reason says:

    I don’t like the idea of committing every dollar that I’m going to make. Just not enough flexibility.

    OTOH, I’m a pretty serious saver and I can trust myself to just have money and not really spend it.