How to Budget Using Zero-Based Budgeting by Dave Ramsey

 “Know well the condition of your flocks, and give attention to your herds…” – Proverbs 27:23
A budget is indeed part of our being accountable when it comes to our finances. My husband and I need to lay it out prior to an upcoming month so we can tell our money where exactly they have to go and not the other way around.
In our household, we make our budget using the Zero-Based Budgeting which we learned from Dave Ramsey. If you are new to this method, this is explained by the formula: Income – ( Tithes + Savings + Expenses) = 0. For example if your net salary is P 30,000, so your tithes is P 3,000, desired savings is P 6,000 and the remaining P 21,000 will be budgeted for various expenses. And of course, the result is zero.
Our budget is prepared ahead of time because it is our plan on how to manage our money for a particular month. Since we have different expenses to be incurred each month, every month we prepare a different budget.
How to Do the Budget
Ok, so here’s how we do it or how I do it since I am the one in charged for our budget, I am using the online budget plan sheet found in Budget Simple. It is FREE! You can try to check it out, maybe you’ll find it helpful also.
Below are the three (3) steps in making a budget:
1. I list all of our income. Included here are the following income of my family yours can be more or less but it’s ok:
  • on-call job income;
  • business commission;
  • business profit;
  • husband’s salary;
  • rebates;
  • etc.

2. I list all of our expenses for the following month. There are two (2) categories for our expenses namely, fixed and variable expenses.

Fixed expenses are those expenses that are not changing each month such as the following:

  • mortgage
  • condo dues
  • insurance
  • cable
  • internet
  • etc.

Variable expenses are those expenses that can vary each month such the following:

  • grocery
  • electric bill
  • gasoline
  • water bill
  • etc.

3. I subtract tithe, savings and total expenses from the total income. When doing this, the result should be zero.

The tithe is 10% our gross income and we are giving this back to our local church who takes good care of us spiritually and visits us to check if everything is well with us. My family believe that the tithe is not ours, it is God’s so it is just right for us to bring Him back what belongs to Him. Malachi 3: 10 says, “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it”. 

We then take 20% of our income and put it into our savings account. We are also working on establishing our Emergency Fund so that when emergency arises, we have something to deal with it.

Living below 70% of our total net income every month is our goal. Honestly, there are times when we spent more than 70% of our net income due to some unforeseen things. But we never stop trying each month to do our best so we can achieve our family’s financial goal. We desire to be debt-free soonest so we should take actions and sacrifices.

4. We monitor our budget throughout the month. My husband and I are constantly recording all of our expenses everyday. Even a single peso counts just to ensure that we are staying on top of our budget.

Well, that’s it guys. I hope that this will help you in your family finances. If you have some questions and suggestions, leave us a comment. We are so excited to hear from you. God bless you!

Love lots,

1 thought on “How to Budget Using Zero-Based Budgeting by Dave Ramsey”

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