Comments on: How To Create A Zero-Based Budget

By: tinnitus treatment

tinnitus treatment — Thu, 29 Oct 2009 13:29:38 +0000

What I do instead is to reconcile all my accounts I try at least once per week, just to make sure I’m not going crazy and spending too much.

But then again my income AND expenditure are both highly variable

By: Mary H.

Mary H. — Thu, 06 Aug 2009 03:20:58 +0000

I’m not sure I understand how to budget for some of our utilities that fluctuate substantially. For instance, our natural gas can be around $250 in the winter months, but only $25 in the summer. How do I do this?
TIA!

By: Lulu

Lulu — Mon, 27 Jul 2009 20:56:55 +0000

I use the zero based budget too. I have a category in my miscellaneous called ‘overages’ and if I spend less on food for the month this shows up in Excel as an overage in the budget. This amount gets transferred to an overage account in ING and every couple of months I raid it to make a snowflake payment to a debt.

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extenze male enhancement — Mon, 02 Mar 2009 07:25:32 +0000

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By: RateNerd

RateNerd — Tue, 24 Feb 2009 22:06:47 +0000

This is a great explanation – can you use this concept with tools like Quicken or Mint? I would love to have an automated tool to drive the zero based budget formula.

By: Chris R

Chris R — Tue, 24 Feb 2009 17:44:35 +0000

I never heard of a zero based budget until now. Me and my girlfriend were just talking about making a budget when I came across this site.

I’ll try it and let you know.

Thanks

By: Dana @ The Busy Frugal Mom

Dana @ The Busy Frugal Mom — Sun, 22 Feb 2009 03:33:55 +0000

We read about the zero based budget a few months ago and have been trying to follow this plan. Sometime we have a hard time carving out enough time to pre-plan our spending. Thank you for the reminder

By: Fine-Tuned Finances

Fine-Tuned Finances — Sat, 21 Feb 2009 01:39:10 +0000

Thanks for the article! We did our ‘zero based budgets’ at the Financial Peace University class I’m coordinating a few weeks ago, it’s good stuff!

By: Bible Money Matters

Bible Money Matters — Fri, 20 Feb 2009 21:41:59 +0000

Great post on the zero-based budget – one of my favorite budgeting tools! I’ll definitely be bookmarking this one!

Starting our own zero based budget was one of the best financial decisions we’ve ever made. It really forces you to realize where the money is going, and it can be very eye opening sometimes..

By: Ben J

Ben J — Fri, 20 Feb 2009 01:51:56 +0000

Hi there.

This is a really solid post about budgeting.

I’d like to add the following about annual expenses (#3). Once an Annual expense is paid, the allocation needed for each pay check depends on whether one is paid monthly or fortnightly.

To illustrate this I am going to use a life insurance premium payment of $620.00 (for 2009).

A monthly pay check means the following allocation – $620.00/12 = $51.67

A fortnightly pay check means the following allocation – $620.00/26 = $23.85

(Both of the allocation figures have been rounded up).

Another point to be mindful of is whether the premium cost increases each year. This means the allocations will need to be calculated from the predicted increased cost of the life insurance. In other words don’t save the 2009 cost for the 2010 cost, make an educated prediction of the 2010 cost.

So, hypothetically speaking, if during the previous few years the life insurance policy had increased by 5% a year then the allocations would be as follows:

A monthly pay check means the following allocation – $651.00/12 = $54.25

A fortnightly pay check means the following allocation – $651.00/26 = $25.03

I’ve been using my style of zero-based budgeting, well before I came across this term, for just under a decade and a half, and allowing for annual increases in certain financial commitments is the best preventative tool for not being caught short by annual increases.

I have 2 different insurance payments that are paid monthly by direct debit. I’ve always allocated slightly more than required each fortnight. This means that when the policy is due for renewal each year I have accounted for any annual increase in the monthly payments.

I hope the above information enhances this post.

Regards