Most of your spending is outdated priorities and forgotten subscriptions. Zero-based budgeting starts fresh every month, asking: "Would I choose to spend this today?"
Stop spending for your past self!!
Zero Based Budgeting is a specific way to manage your money, where every dollar gets a job. Here is how it works.
Your first budget is automatically created for you with example categories and buckets. The demo budget is here to trigger memories of how it might apply to your life. Start by renaming the buckets to suit your lifestyle.
You should have a rough idea of how many paychecks you receive a month and how much each one is. Go to the income category, and rename the buckets to indicate where they're coming from, and in the expected column write how much each paycheck should be.
Now the app knows that you have a total income of $4,002.72, and this is where zero-based budgeting comes into play. You have to give every dollar a job. Go through each one of your buckets that you personalized in step 1, and in the planned value column, write down how much you think you spend in that bucket.
Repeat this step until you have given every single bucket a planned value. Once you are done, we call this your plan.
Connect your bank account using the gear icon at the top of the summary section through Stripe. This will download all of your transactions for the current month, and they will show up in about 5 minutes, so go ahead and grab your favorite beverage (if I may assume you haven't already done so), then proceed to the next step.
Start to drag and drop your transactions onto your buckets (or double-click the transaction for a searchable menu). Once you associate a transaction with a bucket (i.e., this transaction has been spent out of this bucket), this will reduce the remaining amount left in the bucket you put the transaction in. This lets you see how your previous plan of spending holds up to your actual spending patterns. The feedback loop provided by your transactions to your actual plan is where the magic happens in your mind—lightbulbs of understanding start to fire off.
We did all of this work to provide insight and data about what the truth of your spending habits are to your brain AND the data it needs to make adjustments. With the way things are broken down, it's very easy to see in which area of your life you are living above your means.
You will also discover transactions you had completely forgotten about. You had forgotten about Netflix but still got charged for the last 6 months.
With all this insight and data, you will free up cash you would not have known about.
I have only talked about the happy path; it is not possible for me to cover all possibilities here. Your situation will probably be messier and require specific problem-solving.
In your welcome email, you should have my email at the bottom. It's completely free to ask about any situation that confuses you. I would be happy to help.
After doing all of this work of understanding your situation and freeing up old spending that does not serve you, you can now begin to strategize how to use the additional funds that you have freed up to take yourself to the next level. This is where certain financial education and principles need to come in—this is your next phase of growth.
When you reach this point, feel free to email us and we can provide guidance.
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