A zero-based budget is simply your total income minus your total expenses with your baseline ending in Zero. This method helps you assign your total income to an expense or savings category.

The benefit of Zero-Based budgeting is that it allows you to gain total control over every dollar you spend. This is accomplished by putting every one of your expenses down on paper so that you are aware and can deal with the differences that may show up on a month to month basis. Many people like Zero-Based budgeting for the simple reason that it forces them to see where every dollar is spent and where they need to make future adjustment. This also allows for better choices in the months and years ahead and helps you learn to spend responsibly.

On the flip side, some say this method leaves them feeling stressed out and anxious. They don’t want to think about whether they can treat themselves to a cup of coffee without checking their budget. These individuals prefer not to worry more than is necessary when it comes to finance. They are OK having some of their money fall into a black hole as long as they are meeting their savings criteria. They prefer a more relaxed budgeting practice.

Whether you use a disciplined structure like Zero-Based Budgeting or a traditional budget, choose one that works best for your personal style. You can learn that budgeting can be fun and enhance your financial future— it doesn’t have to control your life.

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