Allocate every dollar of your income to expenses, savings, and goals. Make sure your income minus expenses equals zero.
Zero-based budgeting means every dollar of income is allocated to expenses, savings, or debt payments. Your income minus all allocations should equal zero, ensuring every dollar has a purpose.
If you have unallocated income, assign it to savings, debt payments, or specific goals. The key is to give every dollar a job before the month begins, so you're intentional with your money.
Aim to save at least 20% of your income. Start with an emergency fund (3-6 months of expenses), then focus on retirement savings (10-15% of income) and other financial goals.