The "Zero" budget

Dave Ramsey's "The Zero Budget" idea tends to stump some people. It's actually BRILLIANT! Let me explain...

Every dollar you have has a name. EXAMPLE. Your paycheck is $2000 a month. Your bills are as follows:

Rent/Mortgage: 1000
Electricity: 200
Water: 50
Cell phone: 100
Gas: 50
Insurance: 200

Okay so it looks like you have a LOT left over... BUT, if every dollar has a name then you have to break it down like this.

Food: X amount of dollars
Gas: X amount of dollars
Savings: X amount of dollars
Childrens clothes fund: X amount of dollars


And so on and so forth until the bottom of the page says:

"LEFT OVER AMOUNT FOR THE MONTH OF SEPTEMBER"-- $0.00

That's the point. The point is not have "Extra' money. That doesn't mean you can't spend money on fun stuff. that means you BUDGET for it. You give X amount of dollars each month the name "SPENDING MONEY". It's OK to spend money, and go to the movies, and buy shoes... just give yourself an AMOUNT, instead of looking at your checkbook and saying "Hmmm.. i'll let myself spend X." WRONG! Give it a number, and give it a NAME!

THAT is how a Zero budget works! And get this... it really DOES work!