How to create a zero-based budget {and a free printable}

A zero-based budget is one in which you allocate every cent of your budget so that you know where every dollar is going. Your income less your expenses equals zero (hence the term).

The process is quite straightforward and requires you to sit down at the end of every month to budget for the month ahead. It may take a few months to understand the process fully but after that, it's a cinch.


1 | Record your income

List your entire household income that you expect to receive in the upcoming month. Include things like tax returns, investment earning, second jobs etc.

2 | List your budget categories

Create budget categories such as home, transport, food, entertainment, clothing, medical, education, health, gifts, donations.

3 | Add your budget items

List individual items under each category such as car repayments, fuel and repairs under ‘Transport’.

3 | Assign your dollars

Assign every dollar of your income to these categories including putting money towards repaying debt and savings. This is your budget for the month.

4 | Record your expenses

As you go through the month, record your expenses against each item in your budget. Do this as regularly as possible and if you begin to overspend in one category, try to reduce spending in that category or underspend in another to make up the difference.

5 | Review your budget

At the end of the month, calculate your spending, review how you went then set next month’s budget.


A Side Note...

A common misconception about zero-based budgeting is that it requires you to spend all of your money each month but in fact, part of your 'expenses' go towards debt repayments and savings as well.

If you need some extra help with saving for something big, like a car, or something smaller, like a vacation, this free printable Savings Tracker from Lorna Leigh Lane will help to keep you motivated as you see your savings grow and get closer to your goal.


Budgeting is easiest with templates that you can re-use each month.

The Lorna Leigh Lane Home Budget Ultimate Planner Kit is full of templates that you can edit to make your own.

Within the pages of this kit you can create monthly budgets, track your spending as well as debt repayments and savings tracking.

To get your Home Budget Ultimate Planner Kit click the button below below and give zero-based budgeting a try.

Shop Lorna Leigh Lane Printables Now


To download your free Jar Savings Tracker template, click the button below to head to the Printable Library.

Happy planning!