📂 Budgeting
Zero-based budgeting: Assign a purpose to every euro you earn
💡 Quick Tip
Learn the zero-based budgeting technique, where your income minus expenses equals exactly zero. Discover how to give a specific mission to every euro in your account to maximize savings and prevent money from just "disappearing".
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What is zero-based budgeting?
The concept of the zero-based budget is simple: Income - Expenses = 0. It means every euro coming into your account must have an assigned "job" before the month begins.
The philosophy behind the method
Most people save what is left after spending. With this budget, you change the rules:
- Proactive vs. Reactive: You decide in advance where the money goes.
- Savings is a fixed expense: Treat your transfer to savings with the same urgency as a utility bill.
- Flexibility: If you spend more on leisure, simply subtract that amount from another category.
Steps to implement it successfully
- Calculate total income.
- Subtract essential expenses.
- Subtract savings and debt.
- Subtract leisure and desires.
- Adjust to zero.
📊 Practical Example
Practical example with real numbers
Let's say your net salary is €1,600 per month:
- Income: €1,600
- Rent & bills: - €750 (leaves €850)
- Groceries: - €250 (leaves €600)
- Transport: - €100 (leaves €500)
- Debt (car loan): - €150 (leaves €350)
- Savings: - €200 (leaves €150)
- Leisure: - €150
- Final total: €0
If the car breaks down and costs €100, you cannot invent money. You must take it from "Leisure" or reduce your "Savings" ensuring the math balances perfectly.
