Creating a zero dollar budget and the benefits

People often talk about zero dollar budgeting, but do you actually know what it means or how it can benefit you?

A zero dollar budget basically refers to the concept of ‘spending’ every single dollar you earn in your budget spreadsheet or paper spreadsheet, BEFORE the month begins. This means that every dollar in your earnings is accounted for on or before pay day.

The idea is that you will assign every dollar you have to each of your expenses, even a savings account should be seen as an expense. If you reach your limit for your category, like I did with my ‘transport’ costs this month – simply stop spending in that category and find a way to reduce the costs.

You may wonder how I can reduce the costs of transport – though really it was simple, I caught the train and will continue to catch the train until the end of February.

If the zero dollar budget is going to work well for you, you MUST organize time in your monthly activities to sit down and figure out the following months expenses. This can be done by making it a fun task, organize the husband/wife/kids or whoever and sit down for 45 minutes on a Sunday morning.

Quick zero dollar budgeting tips:

• Always include your savings accounts in your zero dollar budget
• Always pay yourself at the very start of the month.
• Seperate your savings from your everyday account – this will reduce spending
• If you earn extra money in the month, ensure you account for it in your budget
• Consider having an account or fund that is for fun things and spare of the moment activities. Don’t lose your fun in life simply for a few dollars!

Starting your zero dollar budget

Now that we have explained what a zero dollar budget is, it may be good for you to actually start using a proper budget spreadsheet.

You have two options:

• Do a Google search for ‘budget spreadsheet’ and try and download a free template for Microsoft excel.
• Buy the Savings Guide spreadsheet for $29.95

We do suggest you download a free template first, as you will quickly learn that most of them are not good enough. That is why we released the Savings Guide Budget Spreadsheet which can be located on;

• http://www.budgetspreadsheet.com.au

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