Zero-Based Budgeting (ZBB)

Zero-Based Budgeting is a method where your Income minus Expenses equals ZERO. It doesn't mean you have zero money left. It means you have assigned every single rupee to a specific category (including savings).

The Formula

Income - (Expenses + Savings + Investments) = 0

How it Works

Imagine you earn ₹50,000. You don't just spend and see what's left. You allocate it before the month starts.

Why is it Powerful?

1. Intentionality: You are the boss. You tell the money what to do.
2. No Guilt: If you allocated ₹3,000 for Entertainment, go watch that movie! You planned for it.
3. Finds Extra Money: When you have to assign every rupee, you realize you have more than you thought.

Steps to Implement ZBB

1. Write down total income: Salary, side hustle, dividends.
2. List all expenses: Be detailed.
3. List savings goals: Treat savings as an "expense" (a bill you pay to your future self).
4. Subtract Expenses from Income:
   • If positive (Surplus): Assign it to debt or savings.
   • If negative (Deficit): Cut costs. You cannot budget what you don't have.
5. Track during the month: If you overspend on Food, you must take money from Entertainment. The total must remain zero.

7-Day Action Plan

Day 1: Calculate your exact take-home pay for next month.
Day 2: List all fixed expenses (Rent, EMI, Wifi).
Day 3: Estimate variable expenses (Food, Travel). Be realistic.
Day 4: Decide your Savings amount. (Make it a line item).
Day 5: Do the math. Income - Outflow. Is it Zero? If not, adjust.
Day 6: Use an app (YNAB, Excel, or Pen & Paper) to record the plan.
Day 7: Start the month. Every time you spend, check if it fits the category.

Quiz

💡 Final Wisdom: Give every rupee a name, or it will find its own way out of your pocket.