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Zero Balance Budget Yourself To Financial Freedom

August 7, 2015

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Why a zero balance budget is a great way to manage your finances. Here's how to do it via @shoeaholicnomore

Today I have a guest post from the lovely Tennille at Enjoy!

The first time most people, including myself, sit down to create a budget it can feel intimidating. Thankfully with zero balance budgeting it doesn’t have to be. If you have ever written even the simplest of budgets you can easily create one using this system.

This is the system I have been successfully using since 2008. It has allowed my husband and I to pay off nearly $18,000 of debt in just a few short years and will see us though to financial freedom in just a few more.

What Is A Zero Balance Budget?

Simply put, the zero balance budget means that every penny earned has a job to do. It also means that the bottom line of your weekly or monthly budget is zero. If you’re brand new to budgeting, this is perhaps the easiest system to get started with.

How To Create A Zero Balance Budget

The first step is to gather your income statements for the past month and the bills you paid as well. I suggest doing this with a four work week month as the extra week means extra pay that isn’t always available.

Next figure out your weekly or monthly income. Then write that number down at the top of a piece of paper. You will then need to calculate your total expenses, include what you think you spend on food and gas. Leave nothing off of this list, no matter how small it may seem.

Subtract your expenses from your income. The number you are left with should be zero. If it’s not, then you have some work to do.

Money left at the end of the month? You’re in a great position to make some headway in your financial future. Working on your baby emergency fund? Have a credit card you want to pay off? Use the “found money” to make an extra payment.

On the other hand, if you are finding that you have more expenses than money it’s time to take a good hard look at where your money is going. You must then make some difficult decisions. Are you going to find ways to cut your monthly bills, or take on a second job to make ends meet? You may find that you need to do both in the beginning.

It is important for you to understand that if you don’t give your money a job, and you don’t know where it is going then it will be gone in the blink of an eye. You will be left wondering where it went and why you are broke.

For a zero balance budget to work it must be created well in advance so that you can see what is coming down the line over the next few weeks. This is not something that can be one once and then forgotten. Your income and expenses are fluid, even if it doesn’t seem that way at the moment.

Your heating or cooling bill will be higher some parts of the year than others. Christmas and other holidays including birthdays bring additional expenses. There may be a lot of overtime, or an upcoming bonus at work that is giving you a boost in income. Or you could be facing a lay off. Having a monthly budget meeting with your spouse will help keep you both on the same page.

Finally, don’t spend money on something that isn’t already in the budget. If that dollar already has a job don’t assign it a new one without creating a spot for it in your budget. That however means that something else must lose the same amount of money to cover the new expenditure.   It is important to hold yourself accountable to the budget that you created.

From Zero Balanced Budget To Financial Freedom

By sticking with the plan that you have created, you will find yourself moving towards financial freedom. In fact, many people (including myself) who have adopted this form of budgeting have found that they are able to pay down debt faster and save more money on this system than those who don’t.

Stay on track and you may find yourself enjoying financial freedom sooner than you thought possible.

Have you ever tried a zero balanced budget?

Tennille, a freelance writer and a stay at home mom with two young boys lives in the Midwest. She is focused on becoming debt free, while raising a family on a single income. You can join her on her adventure at or follow her on Twitter.

Why a zero balance budget is a great way to manage your finances. Here's how to do it via @shoeaholicnomore

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9 responses to “Zero Balance Budget Yourself To Financial Freedom

  1. Hi Kay! I’m so glad I was able to help you understand it better. It really is a great budgeting system! If you have any questions please don’t hesitate to ask.

  2. Have our editorial calendars been chatting? I had a post go live on this today! haha The beauty of writing about personal finance is that we’re all in the same book, just from different perspectives. It’s my favorite part of the blogging community.
    I think you described it perfectly, “Every penny earned as a job to do.” Great post, Kayla!

    1. Maybe they have been! 🙂 I can’t take any credit for this post though, Tennille at wrote it for me as a guest post. She did awesome though, right?!

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