![]() (Hint: Start with those eating out and entertainment budget lines.) What if you end up with a negative number? You just need to cut expenses until your income minus your expenses equals zero. Get those dollars to work by putting any “extra” money toward your current money goal. You’ll end up mindlessly spending it here and there. What if you subtract your expenses from your income and you’ve got money left over? Don’t leave it there. It’s all accounted for and given a purpose. And here’s the reason we love this method: Zero-based budgeting just means you give every dollar a job to do-spending, giving, saving or paying off debt. It also doesn’t mean you blow all your money. Leave a little buffer in there of about $100–300. Quick callout: A zero-based budget doesn’t mean you let your bank account reach zero. If you don’t know which money goal to go after first, check out the 7 Baby Steps. Quick callout: If you’re working to save money, get out of debt, or some other money goal, you’ll get there way quicker if you cut back on the nonessential spending. We’ve got things in here that might not apply to you, but it should give you a good idea of what your budget categories might look like! ![]() To recap, here are those common expenses. Then work in a miscellaneous line and any nonessentials like personal spending (or fun money) and entertainment.Start with the essentials: We’re talking about insurance, debt, childcare, etc.You’ll learn better what you actually need to budget after a few months. Speaking of which-that grocery budget line is super hard to guess at first, so just start with a really good estimate based on your past spending. okay, you get it.įor example, food is a budget category, and groceries is a budget line that goes under it! Or the category is like a playlist, and the lines are like the songs. Think of a budget category as a folder and the lines as the files inside it. ![]() Make a budget category for each of these, and you can create budget lines underneath. That’s food, utilities, shelter and transportation. ![]()
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