Zero-Based Budgeting: A Complete Guide

Published: Febuary 19, 2026| Category: Budgeting

Zero-based budgeting is a method where your income minus your expenses equals zero. That doesn't mean you spend all your money—it means you give every dollar a job, whether it's bills, savings, investments, or guilt-free spending.

How to Create a Zero-Based Budget

1. Calculate your monthly income – Include salary, side hustles, etc.
2. List all expenses – Fixed (rent, utilities) and variable (groceries, dining).
3. Subtract expenses from income – The goal is zero. Adjust categories until you hit zero.
4. Track and adjust – Use apps or spreadsheets to monitor.

This method forces you to be intentional and often reveals wasteful spending.

Pros and Cons

Pros: Gives full control, encourages saving, reduces debt.

Cons: Requires time and discipline, may be too rigid for some.

Try it for a month and see if it works for you!