Zero Dollar Based Budgeting (2024)

I’m delighted to introduce Suzanne as a member ofThe Mom of the Year team!Suzanne amazes me with her incredible budgeting smarts and financial savvy.She regularly makes magic happen for her family for a song, organizing their lifestyle around a firmly establishedbudget. Suzanne will be sharing her economictechniques and ideas with us, and I can’t wait for all of us to learn from her!

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Let’s face it friends, life is expensive. Gas prices change quicker than my mood on aMonday, milk and bread are no longer cheap staples, and fruit can catapult yourgrocery budget into the red quicker than a rogue marker on a beige carpet. Raisinga family can often leave you overwhelmed and your bank account underwhelmed.

You are left defeated and wondering if you’ll ever win the uphill money battle. Butimplementing a zero-dollar based budget can turn feeling overwhelmed into feelingin control. After all, it’s your money–shouldn’t you be telling it where to go?

A zero-dollar budget means you are budgeting every single dollar that comes in,right down to your Friday night pizza. Our family first began zero-dollar budgetingwhen a money savvy friend introduced us to Dave Ramsey and his debt reductionplan. It worked so wonderfully for them that we decided to give it a shot. Sincebeginning a zero-dollar budget we’ve chiseled away debt, planned several familygetaways, and the holiday season was a time of joy and giving (as it should be) ratherthan stress. Overall our stress level is down and our bank account is up. Not becauseof increased income but all because of a solid working budget.

Hereare 7 steps to get you on your path to smarter money management with zero dollar based budgeting:

1. Make it a date! Set a time with your spouse where it is just the two of you. Nokids, no laundry piles, or dirty dishes. Okay, okay. I know that’s impossible. Atleast put the laundry out of sight. Your only companions should be paper, penand your bills.

2. Write it all out. Start easy with the reliable bills that come every month. Carpayments, electric, mortgage, water and so forth. Next do grocery, clothing,sports fees, babysitter, music lesson, etc. Last should be your spendingmoney. This is the “not so necessary but sure is fun to have” money. You haveto have a budget for your budget. This extra money takes commitment andwill power on your part. Challenge yourself to stop less for coffee, wait onemore month before buying new jeans, saying “no” to the new throw pillows.You just might find you have a bit more money when you put yourself on amoney diet.

3. Keep track and communicate. Hold yourself and your dollars accountable.Write down every single dollar that is spent. There are several computerprograms and apps that will assist you with this. Do some research anddecide which is best one for you. We choose to use the EveryDollar app. Besure both partners use the same program and communicate daily in regardsto spending and upcoming expenses. And most importantly STAY INBUDGET.

4. Use cash. Remember being a kid and heading to the MAC machine to “tapmac” with your mom? Well, it’s time toget nostalgic and go do that with your kids. Showthem the innards of a brick and mortar bank. Plastic, whether debit or credit,makes it so easy to spend. It means we always have money with us, even ifwe don’t. Pocket some cold hard cash and leave the plastic home. Cash holdsus accountable.

5. Which leads us to step 5, how to use cash. Cash makes using your zero-dollarbudget easier. Head to the dollar store and buy a coupon portfolio. Figure outhow much cash you need for the week, or two weeks if you prefer, and labeleach section of the portfolio. When you head out for errands you have yourorganizer divided by groceries, dry cleaning, birthday presents, coffee, etc.Anything you can use cash for you should. Using cash helps you keepexpenses on track and makes budgeting easier. If you allot $10 for twoweeks of coffee you will find yourself saying, “hmm, do I really need thatcup?”

6. Make a new budget each month and talk about the future. Some things,mortgage for example, will remain consistent by the month. But otherexpenses change monthly. Are soccer sign ups this month? Do we want tovisit the zoo next weekend and is that in the budget? Car inspection is upnext month. Who needs new shoes and what is our budget for that? Hold amonthly budget meeting and soon your household expenses will be runninglike a well-oiled machine.

7. And lastly, but perhaps most important, is get the kids involved. One of themost important things a parent can do is raise a financially fit child. Childrenneed to learn early on that life isn’t free. You don’t want them heading off tocollege and saying “wow, groceries are really, really expensive!” Include yourchildren in your budget meetings and show them how a budget works. Makeit simple and age appropriate. Grade school age children can comprehendnumbers, so showing them the $275 January heating bill will help themunderstand why pizza night can’t happen every Friday. They may even startto turn off the light when they leave the room! Does your child need newsoccer cleats? Discuss a good budget with them and if they decide they needto have the fancier, more expensive pair have them contribute the differencewith their own allowance.

A zero dollar budget can be daunting at first, especially if you haven’t operated on abudget before. But with time, patience and commitment you will soon see therewards. It will feel like you got a raise as you challenge one another to come inunder budget. And with a little extra cash the possibilities are endless. Stash awayfor a vacation, pay the car off early, or take the family out for ice cream. The choice isyours. Before long you and your partner will be fist bumping and high fiving yourway through the month as you celebrate your zero-dollar budget finesse.

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More financial scoop you should know? As a home owner you have an asset available that you can tap into when you need extra cash after you retire. Your home has a value which increases or decreases based on changing local markets, home improvements and other factors. When you talk to a reverse-loan lending agency you can determine what the current value of the home is and how much of that value you can take out as spendable money. Reverse mortgage funds will most likely be allocated to you in small monthly doses or can be given to you in a single payment if you choose. What makes a reverse loan of this type unique, other than the fact that it is only available for retirees, is that you don’t have to pay back the money quickly as you would with a normal loan. However, if you ever leave your home before you have repaid the balance then the loan balance will be owed almost right away. Look into it, friends!

First image credit: depositphotos.com, image ID:6414132, copyright:stuartmiles

Second image credit: depositophotos.com, image ID:68425601, copyright:david_franklin