Your Way To Better Savings In 2022

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Are you tired of not having enough money at the end of the month? Do you need to save more money for your future?

Zero-based budgeting (ZBB) can help you make your financial plan and change your finances forever!

With zero-based budgeting, you can finally manage your finances and start your path to financial freedom.

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3 Steps To Make A Zero-Based Budget

Man and woman sitting at table budgeting to fit their new financial goals

We will teach you about zero-based budgeting and how it can help you get your money under control.

By following our Savvy steps, you can make the budget process simple and easy and you can go from no budget to having a sure-fire budget in no time.

And, once you have created your budget, you’ll be on your way to better money management!

1. Determine Your Monthly Income

The first step in zero-based budgeting is knowing your monthly income.

You need to know how much money you have coming in each month to allocate it towards your expenses.

Knowing how much you make may seem like a no-brainer, but many people don’t know their exact income!

Write down all your income streams for the month, how much you expect to make from them, and get some totals calculated.

You can use a money management app like Personal Capital or Mint to help you track your income, savings, and more!

2. Be Real About Your Expenses

The second step in this budgeting process is knowing your expenses.

You need your fixed costs (rent or mortgage) and variable costs (groceries or transportation costs) as part of your expense categories.

Cost management is vital to implement in this step! It is much the same as for a business. You want to make sure you make a spending limit and don’t go over it so you can keep as much of your money as possible.

One way to figure out your monthly expenses is to track how much you spend for a month. Use your bank account statement and credit card statements to track how much you spend in each category.

Once you know how much you spent in one given month, you can estimate how much you’ll spend on your current month. Simply write down the bill (company or what the expense is) and how much you’ll be spending.

Now you have your income minus expenses totaled up, but what do you do with the remaining money?

SAVVY TIP: Using a budget template or budgeting software like Quicken can help you with the zero-based budgeting process to keep track of your money automatically.

Also, use programs like Trim to save on utilities, cancel unused monthly subscriptions, and save on your monthly expenses.

3. Make Sure Every Dollar Has A Home

Every dollar of your income must have a home- the ‘zero’ of this budgeting plan means you have ZERO dollars remaining at the end of the month.

Now, this isn’t exactly true! You’ll still have money every month, and your income is assigned to whatever else you may want to do or save after the necessities are paid for.

With a zero-based budget, you set aside money for all that good stuff, plus some savings. That way you never skimp out on money for the future, but you don’t overspend on stuff you don’t need either.

You can pay yourself first by making sure you have money to buy clothes, fun stuff from Amazon, etc.

Once you have your typical expenses, it’s time to write out money for other expenditures, sticking with tight spending limits so you never have to dip into your savings that month.

BONUS: To find more cost savings, use coupons and get cash back from Capital One Shopping and Honey.

SAVVY TIP: There are many other ways to get cost savings and reduce your expenditures. You could:

  • Cut back on eating out
  • Spend less on groceries
  • Use public transportation services
  • Negotiate your personal loans payments

The possibilities are endless to reduce cost drivers (like in business) and work toward zero dollars in the budget!

Zero-Based Budgeting Vs. Traditional Budgeting

Savvy Couple budget template

Zero-based and traditional budgeting are two different budgeting methods for managing your income.

Zero-based budgeting starts with a clean slate each month, meaning you allocate every dollar to a certain category.

The traditional budgeting method allows you to carry over last month’s expenses to your current month to use leftover income, but people find this leads to overspending.

Both methods use a structured approach to allow you to track your spending, but aren’t money isn’t assigned the same way to expenses.

The main difference is that zero-based budgeting starts with a clean slate each month. You allocate every dollar towards specific categories, which leads to mindful spending.

On the other hand, regular budgeting allows you to carry over last month to this month. This is easier for budgeting because leftover income is there for whatever, but it’s left “up for grabs,” which people tend to spend quickly.

Why Use Regular Budgets?

There are a few reasons you might want to use regular budgeting Instead of zero-based budgeting:

  1. Easy to manage: Regular budgeting can be easier because you start a new period with leftover income from the previous month. Your new budget may follow the same setup every month rather than changing spending categories.
  2. Save time and energy: You don’t have to spend time budgeting all your money, just what you expect to spend in a typical month. Your previous results from your budget will be the same some months, so you’ll be able to copy-paste your budget month to month and just add the money left from before.

Why Use a Zero-Based Budgeting System?

The main benefit of zero-based budgeting (ZBB) is that it forces you to be mindful when you spend. It’s the same concept as using the envelope-based budgeting method.

When you “spend” to $0 every month, you are less likely to make impulse purchases or overspend in any one area. It gives you a chance to prioritize better savings!

Here are a few quick reasons why people are switching to a zero-based budget:

  1. To get rid of debt: If you have a lot of debt, creating a zero-based budgeting method can help you get rid of it faster. You can put extra cash towards your debt each month rather than other purchases.
  2. To save money: A zero-based budget can also help you save by making it a top budget category and filling it every month, rather than skipping it.
  3. To live a simpler life: If you want to live a simpler life, a zero-based budget can help you. You can justify expenses and cut out the things in your life that you don’t need so you don’t spend money.
  4. To be more organized: Finally, one of the best reasons to create a zero-based budget is you can easily track your spending and your savings with easy organization.

Zero-Based Budgeting Example

Here’s an example to help you create your zero-based budget!

In January, Joe has a salary of $4,000 per month from a local business and has his paycheck deposited in Chime like clockwork.

He uses his bank statements and credit card statements to create a list of all his costs:

  • Housing: $1,000
  • Food: $400
  • Car payment: $300
  • Gas: $100
  • Utilities: $200
  • Phone: $100
  • Insurance: $150
  • Entertainment: $50
  • Total expenses: $2,300
  • Leftover money for other expenses: $1,700

Joe can use budgeting percentages to divide his leftover cash between other expense categories. For example, he could put 30% towards savings, 20% towards debt repayment, and 10% for going out with friends or getting new clothes on sale.

He’s been researching some budgeting tips and decided to divide the remaining $1700 this way:

  • Invest in an Emergency Fund at CIT Bank: $350
  • Pay off extra in credit card debt: $100
  • Invest in a Retirement Fund savings: $250
  • Pay off doctor’s services: $200
  • Pay extra on mortgage: $350
  • Put extra on student and personal loans: $200
  • Save for special occasions: $150
  • Personal spending (clothing, shoes, etc.): $100

Now all $4000 of his earnings has a home, and his total cash at the end of the month is $0.

By creating this budget, Joe can be mindful of his current expectations with planned spending and make sure that he is only using his money on the essential things and cut costs if needed.

He can also save money each month more than ever before and progress towards his financial goals of becoming debt-free and returning early!

Pros & Cons Of Zero-Base Budgeting

save monthly to avoid living beyond your means


  • Help you stay on track with your spending
  • More mindful before buying or splurging
  • Prevent you from overspending in any one area
  • Help you save money


  • Can be time-consuming
  • May require you to make some changes to your spending habits
  • May be challenging to stick to
  • Require a lot of discipline

Final Thoughts

saving money for an emergency fund money moves to be debt free

Zero-based budgeting can be an excellent tool for helping you save money and stay on track with your spending. However, it does require discipline to create a budget every month.

You may need time to change some of your habits towards make zero-based budgeting work, so you progress your financial goals.

And, once you have created your zero-based budget, you will be well on your way to better money management!

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