How to create a Personal Zero-Based Budget

Key Takeaways


Zero-Based Budgeting

Assign a label to every personal income and expenses


Paycheck frequency for most of Americans living in the US


Our budgeting app that pays you rewards

You need a budget

There are many signs that may suggest you need a budget in 2022. Here's 6 reasons you need a budget by Investopedia. Budgeting is essential to build a strong financial foundation found in this article. Zero-Based Budgeting is one method out of many that may work for you. Here's a step by step guide on how to create one.

Creating a Zero-Based Budget

Step 1:

Take a sheet of paper and at the top list your monthly income from your bank. For example if you get paid bi weekly then take your biweekly paycheck multiplied by 2 to get your monthly income. Once you have that number write it down, this is where you will draw your expenses from.

Step 2:

Underneath your income, write down a list of your monthly expenses from most important to least important. Once you've listed all of them write down how much they are to the right of it. You can go as far as labeling their due dates as well to keep on track.

Here's a short example:


  • Biweekly $1,000
  • Monthly $2,000


  • Rent $1,000
  • Groceries $400
  • Utilities $200
  • Car Loan $200
  • Gas $200

You see that your income and expenses both add up to $2,000 and all your expenses are accounted for (don't forget debt!). There is no dollar left uncategorized in this Zero-Based Budgeting method.

Use envelopes to your advantage

Your goal is to then try to stick to this budget. It can be hard to overspend especially for variable expenses like food and this is where envelopes come in. By setting aside money for these categories in advance using a tool like Mooch you don't have to worry about overspending or not having enough money for these bills.

Why is it important?

It seems manual and tedious to do this every month, but here's the deal the first month is always the hardest. Once you get past the first month you'll get the hang of it the second month and so forth. It's important to categorize your spending so you get a sense if you're on track to save your goal money amount or set to retire by a certain age and become financially free.

Keep this in mind...

Budgeting can seem extremely manual at times; however, we say it is an essential skillset to master. There are budgeting apps out there that do it for you automatically like Mooch it's not only free to use but also rewards you for doing your budget well. It's the first step in saving money and growing your portfolio.

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