Zero-Based Budgeting
Learn about the zero-based budgeting philosophy that powers CashCat. Give every penny a purpose and say goodbye to guesswork. Budget with the money you have, not estimates of how much you might have.
The Zero-Based Formula
Income - Expenses = Zero
In zero-based budgeting, every penny of your income should be assigned to a specific category before the month begins. This doesn't mean you spend everything - savings, emergency funds and debt payments are also categories that receive assignments.
Core Principles
Every Penny Has a Purpose
Before the month begins, assign every penny to a specific category. Whether it's rent, bills, groceries, emergency fund, entertainment or savings - every penny should know where it's going. This way, you know exactly where all of your money lives and what it is for.
Proactive Planning
Make spending decisions before you're in the shop or online checkout. When you've already allocated money for dining out, you can spend guilt-free within that limit.
Savings is a Category
Savings goals, emergency funds, and investments are treated as expenses in your budget. Pay yourself first by budgeting for these important financial goals as a priority. Once your emergency fund is set up, you can start putting your money into savings. Once you're happy with your savings, you can then start giving money to your fun categories!.
What If I Overspend?
If you overspend in one category, move money from another category to cover it. Overspending is not a disaster! You have flexibility in your budget. The total budget remains balanced, but you can adjust as life happens.
Why Zero-Based Budgeting Works
- Eliminates mystery spending - you know exactly where your money goes
- Forces you to prioritize what's truly important to you
- Makes savings an instinct rather than hoping money is left over
- Reduces financial stress through intentional planning
Ready to Start?
Put zero-based budgeting into practice with CashCat: