Zero-based budgeting is taking all of your money and putting it towards expenditures, savings, and debt. At the end of the month, your income and expenses should equal out zero.
We must track our spendings, and this is a way we can figure out what we are spending money on. All you have to do is write down everything that you spend money on.
So if you have an accurate calculation of the income brought in, you can effectively create a zero-based budget that helps you live below your means.
We know that this budget must end with zero money left over at the end of the month. With knowing our income and spending, we can finally set up what is needed.
Your budget has to be flexible too. Some months the utilities could be higher due to different weather, and sometimes you will not be making as much income.