The Zero-Based Budget That Helps Me Travel, Dump Debt, & Enjoy My Family

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It's the final two months of the year. Most of us are reflecting on all that has (and hasn't) happened in 2015. For many of us, this year didn't meet our expectations. And a lot our disappointment has to do with our finances. 

I am not one of many, I am one of few. The Year of 2015 has completely superseded my expectations. I have traveled out of the country twice, paid off more than $20,000 in debt, upgraded my home to a 4Bed/2Bath, and spent more time with my family than ever before.

All that awesomeness  because I finally learned how to complete a proper zero-based budget. The zero-based budget is a unique budgeting style that empowers you to tell your money where to go every single month. 

Dave Ramsey recommends that we complete a new budget every month before the month begins and I agree (my only tweak is I do my budget twice a month because I have five streams of income). 

Completing a new zero-based budget every month is critical to your success with finances, because every month is different. For example, during the month of November my niece has a b-day and my family and I will celebrate Thanksgiving. So, at the beginning of this month according to my zero-based budget I'll allocate money to buy her a gift and spend a little extra money on groceries to cover holiday foods. Next month in December I'll allocate less money to repaying debts and allocate more money to buying gifts. You see every month is different. 

What you will need to complete a proper Zero-based budget. 

  • a pencil 
  • a piece of paper 
  • your pay check stub 
  • your actual bills (electronic is fine) 
  • a yellow and orange highlighter 

How to set up your zero-based budget. 

  1. Write you income at the top of a piece of paper 
  2. Tell your money where to go, in this order.
    • First, pay tithes.
    • Second, pay savings.
    • Third, pay four walls; which include food, utilities, rent, transportation and basic clothing.
    • Fourth pay, everything else to include but not limited to debt, personal hygiene, extra clothing, repairs, b-day gifts, and household items. 
  3. Adjust allocated amounts  from the bottom up until you get to zero.
  4. After you've spent the allocated money in each area cross it off with an orange highlighter. If you spent more or less than what was allocated for this category highlight in yellow as a reminder to adjust next months budget accordingly.  

The order that you write your budget is the most critical. You must start with listing your income first. After you know how much money you need to manage for the month then you can decide on purpose what bills will get paid. 

This is what a zero-based budget could look like for the month of November. 

And that's it! The Zero-based budget that helps me travel, dump debt, and spend more time with my family. 

Here's a video recap!

 

Smile, 

Stacey