ZERO BASED BUDGETING Step-by-Step ✉️✨ cash envelope method, by GB | Income Babes on YouTube. 28 min 59 s.
- Video length
- 28 min 59 s
- Time to do it
- 1 hour
- Difficulty
- Easy
- Steps
- 10
What you need
Steps
Add up your take-home pay for the month from each paycheck. Use real bank statements so the number is accurate, not a guess.
List your fixed bills for the month: rent or mortgage, utilities, phone, insurance, loan payments and subscriptions. Write the exact amount and due date next to each one.
Add the costs you pay often but in different amounts: groceries, fuel, transport, pet food, school costs and fun money. Estimate from your last two months of spending.
Set aside money for sinking funds such as car repairs, birthdays, holidays and yearly bills. Divide the yearly cost by 12 and save that amount each month.
Give every dollar a job until your income minus all categories equals zero. If money is left over, send it to savings or debt. If you are short, cut a category.
Decide how much cash each envelope needs until your next paycheck: groceries, eating out, personal care, kids and gifts.
Withdraw that cash from the bank or ATM and put each amount in a labelled envelope. Write the category and the amount on the front.
Spend only from the correct envelope. When an envelope is empty, stop spending in that category until you refill it.
Record each purchase in a notebook, spreadsheet or budgeting app so you always know what is left.
At your next paycheck, top up the envelopes, check which ones ran out early and adjust the amounts for next month.
Tips and common mistakes
Keep the envelopes in a locked drawer at home and carry only the one you need that day.
Round your bill estimates up so a small surprise cost does not break the plan.
Do not borrow from another envelope unless you write down where the money came from and pay it back.
Questions
Do I need cash envelopes for every category?
No. Keep fixed bills like rent and insurance as online payments and use envelopes for the spending you can see and touch, such as groceries and fun money.
What if the cash runs out before payday?
Check which envelope emptied first and move money from a lower priority category, or lower that amount next month.
How is this different from a normal budget?
Zero-based means every dollar is assigned to a bill, savings or spending category, so the plan balances to zero instead of leaving money unplanned.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
