Can't Find the Money to Save or Pay Off Debt? Try My Twist on Zero-Based Budgeting

Hoarding leftover money could be hurting your finances.
Bernadette Joy
Money coach and founder of Crush Your Money Goals
Bernadette Joy is a nationally recognized money expert featured on Good Morning America and NBC News, and in Time and USA Today. She inspires her audience to explore the intersection between net worth and self-worth. While she has two degrees in business and a degree in psychology, her credibility comes from leading by example. As first-generation Filipino Americans, she and her husband AJ paid off a whopping $300,000 of debt in three years and grew their first $1 million of net worth in their thirties. Joy founded Crush Your Money Goals® for the many who are overlooked and underestimated by traditional financial services. Her goal is to help others gain confidence in managing money and provide a blueprint to achieve financial independence.
Dashia Milden
Editor
Dashia is a staff editor for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.
Tiffany Connors
Editor
Tiffany Wendeln Connors is a senior editor for CNET Money with a focus on credit cards. Previously, she covered personal finance topics as a writer and editor at The Penny Hoarder. She is passionate about helping people make the best money decisions for themselves and their families. She graduated from Bowling Green State University with a bachelor’s degree in journalism and has been a writer and editor for publications including the New York Post, Women’s Running magazine and Soap Opera Digest. When she isn’t working, you can find her enjoying life in St. Petersburg, Florida, with her husband, daughter and a very needy dog.
CNET staff — not advertisers, partners or business interests — determine how we review the products and services we cover. If you buy through our links, we may get paid.
Bernadette Joy
Money coach and founder of Crush Your Money Goals
Bernadette Joy is a nationally recognized money expert featured on Good Morning America and NBC News, and in Time and USA Today. She inspires her audience to explore the intersection between net worth and self-worth. While she has two degrees in business and a degree in psychology, her credibility comes from leading by example. As first-generation Filipino Americans, she and her husband AJ paid off a whopping $300,000 of debt in three years and grew their first $1 million of net worth in their thirties. Joy founded Crush Your Money Goals® for the many who are overlooked and underestimated by traditional financial services. Her goal is to help others gain confidence in managing money and provide a blueprint to achieve financial independence.
Dashia Milden
Editor
Dashia is a staff editor for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.
Tiffany Connors
Editor
Tiffany Wendeln Connors is a senior editor for CNET Money with a focus on credit cards. Previously, she covered personal finance topics as a writer and editor at The Penny Hoarder. She is passionate about helping people make the best money decisions for themselves and their families. She graduated from Bowling Green State University with a bachelor’s degree in journalism and has been a writer and editor for publications including the New York Post, Women’s Running magazine and Soap Opera Digest. When she isn’t working, you can find her enjoying life in St. Petersburg, Florida, with her husband, daughter and a very needy dog.
CNET staff — not advertisers, partners or business interests — determine how we review the products and services we cover. If you buy through our links, we may get paid.
When my clients first build a budget, I notice they often make one key mistake: They don’t include saving or paying off debt as a line item.
They plan for the expenses they know they’ll have, like rent and necessities. Then, they assume they’ll use any leftover money for other goals, but it’s an afterthought. By the end of the month, they don’t have any money left to reallocate. 
As a money coach, I’m a strong advocate for the zero-based budgeting method, or what I like to call the “spend-all strategy.” Following this method helped me pay off $72,000 in student loan debt in less than a year. Since then, I’ve taught this method to thousands of clients looking to eliminate their debt and grow their savings.
I like that zero-based budgeting teaches you that spending isn’t bad as long as you’ve built a smart framework. This budgeting method can feel uncomfortable at first, but it could change your relationship with money forever. I know it did for me.
The zero-based budgeting model requires you to assign a task to every dollar you receive each month so that no money is left over.
It was hard for me to unlearn the old savings strategy since my dad taught me it was good to have extra money after handling your necessities.
So I put my own spin on zero-based budgeting and created the “spend-all strategy.” 
I call my version of zero-based budgeting the “spend-all strategy” because I noticed that it helps me explain that spending in and of itself isn’t bad. 
My clients are surprised when I point out that the goal of budgeting is to spend all of their money because they think a budget means they won’t be allowed to spend any money. 
But the spend-all strategy is about intentionally prioritizing your financial goals and taking control of how you manage your money. It reinforces the idea that the point of budgeting is to live your life — not to hoard money.
Implementing a spend-all strategy starts with shifting your mindset. Instead of viewing leftover money as a windfall, embrace the idea that every dollar has a purpose.

Proactively assign every dollar of your income to a specific expense or financial goal. Here’s what it can look like:
Let’s say you budget $2,500 monthly for essentials like rent, groceries and gas. If you have $3,000 of monthly income, you’ll need to figure out what to do with the remaining $500. If it isn’t assigned to a goal, you could deposit $100 into a high-yield savings account that you’re using to build your emergency fund. Now, you’ve “spent” the $100 in a way that helps you reach your financial goals. You’ll do this for the remaining $400, too. 
You can track your income and expenses using pencil and paper or spreadsheets, but I highly recommend a budgeting app compatible with zero-based budgeting, like EveryDollar or Monarch. A budgeting app makes it more convenient to track every dollar since you can quickly make adjustments from your phone with fewer chances for oversights or mistakes.
I use Monarch because it handles my budget and tracks my net worth. One of the upsides of Monarch is that you can share your budget with your family and financial coach without sharing your password. 
Make a plan for any money you allocate at the beginning of the month but don’t end up spending. For example, if you budget $100 for entertainment but only spend $70, you could put the extra $30 toward one of your goals, like paying down credit card debt. By planning how you’ll use any extra money ahead of time, you’re still following the spend-all strategy.
Assigning all of your income doesn’t mean giving up what you love or need to spend money on. Instead, giving each dollar a goal helps you control your spending without sacrificing fun purchases.
For example, instead of spending $100 at Target on a whim, you may budget $100 toward non-essential shopping. This gives you money for splurging, which can help you stay on budget without feeling deprived.
When you’re ready to try the spend-all strategy, here’s what I want you to remember. 
I don’t expect anyone’s budget to be 100% accurate, including my own — and I’m a money coach. But if you approach budgeting to zero with an all-or-nothing mentality, you’ll likely feel like you’re failing with this method.
Instead, I tell my clients that following this budgeting method even 80% of the time is a win and that an unexpected bill or unplanned purchase is OK when following this strategy. As long as you understand where your money is going, you can make changes to your budget as needed. 
When new members join my online community, they often get hung up on the value of tracking every penny. But just focusing on recording expenses is like checking off a to-do list, rather than changing your money habits. Instead, tracking your budget should be the first step in identifying spending habits that you can work on changing if needed.
People who achieve financial freedom don’t waste time tracking every little penny. They’re forward-thinking. You might need to track your expenses for the first three months to understand your money habits better, but over time, you’ll get a sense of your spending and how to plan for the future.
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