Real examples of zero-based budgeting: step-by-step examples you can copy

Why start with real examples of zero-based budgeting?

Theory is nice. But when your rent is due and your paycheck just hit your account, you don’t want theory—you want to know, “What exactly do I write down, and in what order?” That’s why we’re going to walk through examples of zero-based budgeting: step-by-step examples before we talk about fine print.

Zero-based budgeting (ZBB) simply means this: your income minus your planned expenses equals zero. Every dollar is assigned a job on purpose—whether that job is groceries, debt payments, savings, or fun money. You’re not leaving money “left over”; you’re telling every dollar where to go.

Let’s walk through several real examples of zero-based budgeting so you can see how this looks in different situations.

Step-by-step example of zero-based budgeting for a single renter

Meet Jordan. Jordan is 28, lives alone, and brings home $3,200 per month after taxes. Their goals: pay off a credit card and build a starter emergency fund.

Here’s how Jordan builds a zero-based budget, step by step.

First, Jordan lists take-home income for the month:

• Take-home pay: $3,200

Next, Jordan lists fixed expenses in order of importance: housing, utilities, food, transportation, and minimum debt payments. They assign actual dollar amounts until they run out of income.

• Rent: $1,250
• Utilities (electric, water, trash): $150
• Internet: $60
• Cell phone: $70
• Groceries: $350
• Transportation (gas, maintenance): $200
• Car insurance: $110
• Health insurance premium (if paid out of pocket): $150
• Minimum student loan payment: $180
• Minimum credit card payment: $90

So far, that’s $2,610.

Jordan now assigns money to sinking funds and goals:

• Emergency fund savings: $200
• Credit card extra payment: $200
• Clothing: $60
• Personal / fun money: $80
• Gifts / holidays: $50

Add those: $590.
\(2,610 + \)590 = $3,200.

Jordan’s income minus expenses equals zero. Every dollar has a job. If something changes—say, utilities spike in winter—Jordan must reduce another category (usually fun money or extra debt payments) so the total still equals $3,200.

This is a simple, clean example of zero-based budgeting that works well for many single renters.

Step-by-step example for a couple with kids and debt

Now let’s look at a family situation, one of the best examples people ask for.

Alex and Morgan are married with two kids. Their combined take-home pay is $5,800 per month. They’re focused on daycare, groceries, and paying off a car loan.

Income

• Paychecks after tax: $5,800

They start with non-negotiables:

• Mortgage: $1,900
• Property taxes & homeowner’s insurance escrow: included in mortgage
• Utilities (electric, gas, water, trash): $300
• Internet: $80
• Cell phones (two lines): $120
• Groceries and household: $800
• Gas and car maintenance: $300
• Car insurance: $140
• Daycare: $900
• Minimum student loan payments: $250
• Minimum car payment: $350
• Health insurance premiums (through employer, after-tax portion): $200

Total so far: $5,340.

They now have $460 left to assign.

Instead of letting that money just sit in the checking account, they give it jobs:

• Extra car loan payment: $200
• Kids’ clothing fund: $60
• Annual expenses (car registration, memberships): $50
• Family fun / eating out: $100
• Emergency fund: $50

Now they’ve assigned all $460.
\(5,340 + \)460 = $5,800.

Here’s where zero-based budgeting shines: halfway through the month, daycare announces a one-time $100 fee. They don’t swipe a card and hope. Instead, they adjust the budget:

• Reduce family fun from \(100 to \)50
• Reduce extra car payment from \(200 to \)150

That frees up \(100, which they assign to “Daycare extra fee: \)100.”
The total still equals $5,800. This is how real examples of zero-based budgeting handle surprises without blowing up the month.

Example of zero-based budgeting for an irregular income (freelancer)

Irregular income is where many people get stuck. So let’s walk through one of the most requested examples of zero-based budgeting: step-by-step examples for freelancers.

Taylor is a freelance graphic designer. Income changes every month, so Taylor uses a “last month’s income pays this month’s bills” approach.

In March, Taylor earned $4,500 after taxes. That money will fund April’s budget.

At the start of April, Taylor builds the zero-based budget using the known $4,500:

• Rent: $1,400
• Utilities: $150
• Internet: $70
• Phone: $70
• Groceries: $400
• Transportation: $180
• Health insurance (through marketplace): $350
• Business software subscriptions: $120
• Estimated quarterly tax savings: $600
• Emergency fund: $200
• Retirement (IRA contribution): $300
• Fun / dining out: $200
• Gifts / travel sinking fund: $160
• Miscellaneous: $300

Add it up: $4,500. Every dollar has a job.

If April ends up being a lower-income month, say \(3,800, that only affects May’s budget. Taylor will then build a new zero-based budget using \)3,800, trimming categories like fun, travel, and extra savings first.

For freelancers, this style of zero-based budgeting is recommended by many financial educators, including nonprofit organizations like the Consumer Financial Protection Bureau, which offers tools for budgeting on irregular income.

Small business example of zero-based budgeting

Zero-based budgeting isn’t just for households. Many companies use it to justify every expense each year instead of just tweaking last year’s numbers.

Imagine a small marketing agency with projected monthly revenue of $60,000.

The owner builds a zero-based budget by assigning every dollar of revenue to a category:

• Salaries and wages: $30,000
• Payroll taxes and benefits: $6,000
• Office rent and utilities: $4,000
• Software and tools: $2,500
• Advertising and lead generation: $6,000
• Professional services (legal, accounting): $1,500
• Travel and client meetings: $2,000
• Equipment and subscriptions: $1,500
• Owner’s salary: $5,000
• Profit reserve: $1,500

Total: $60,000.

Each month, the owner compares actual numbers to the zero-based plan. If revenue drops to \(55,000, they must actively decide where to cut \)5,000: perhaps delaying new software, trimming travel, or reducing ad spend temporarily.

This is one of the best examples of zero-based budgeting in business: instead of saying, “We spent $4,000 on travel last year, so let’s add 5%,” the owner must justify every travel dollar from scratch.

For more on zero-based budgeting in organizations, you can explore resources from business schools like Harvard Business School that explain how companies use budgeting methods to align spending with strategy.

Zero-based budgeting example for aggressive debt payoff

Some of the most powerful real examples of zero-based budgeting come from people attacking debt.

Sam has \(2,000 in take-home pay, a \)600 credit card balance at high interest, and a goal to wipe it out in three months.

Sam’s non-negotiable expenses:

• Room rent (shared apartment): $700
• Utilities and internet share: $120
• Groceries: $250
• Transportation (bus pass, rideshare): $150
• Phone: $60
• Minimum student loan payment: $120

Total: $1,400.

That leaves $600 to assign.

Instead of letting that money vanish into random spending, Sam builds a zero-based plan:

• Extra credit card payment: $400
• Fun money: $80
• Clothing: $40
• Small emergency savings: $80

\(1,400 + \)600 = $2,000. Every dollar has a name.

The next month, if Sam gets a \(200 tax refund, they don’t just cash it and hope. They add \)200 to income and assign it:

• Extra credit card payment: +$200

Now the card is gone even faster. This is a clean, focused example of zero-based budgeting used as a tool to accelerate debt payoff.

If you’re working on debt, nonprofit agencies and government sites like USA.gov can provide guidance on managing and prioritizing what you owe alongside your budget.

Example of zero-based budgeting for savings and sinking funds

Not every story is about debt. Zero-based budgeting is also powerful for planned big expenses—vacations, car replacement, or home repairs.

Lena earns $4,000 per month after taxes and has no high-interest debt. Her goals:

• Build a 3-month emergency fund
• Save for a $2,400 vacation next summer
• Set aside money for an eventual car replacement

Her fixed expenses total $2,600.

That leaves $1,400 to assign. Here’s how zero-based budgeting helps her prioritize:

• Emergency fund: $500
• Vacation sinking fund: $200
• Car replacement sinking fund: $300
• Roth IRA: $200
• Gifts / holidays: $50
• Fun money: $100
• Miscellaneous: $50

Total added: $1,400.
\(2,600 + \)1,400 = $4,000.

By assigning every dollar, Lena knows exactly when she’ll hit each goal. For example, \(200 per month toward vacation means \)2,400 in 12 months. That’s one of the best examples of how zero-based budgeting reduces money anxiety: you trade “I hope I can afford it” for “I know exactly when I’ll afford it.”

2024–2025 trends: how people are using zero-based budgeting now

In the last few years, with inflation and rising housing costs in many U.S. cities, more people have turned to detailed budgeting methods to stay afloat. Surveys from organizations like the Pew Research Center and reports referenced by the Federal Reserve show that many households feel squeezed by higher prices and are cutting back on discretionary spending.

In this environment, examples of zero-based budgeting: step-by-step examples are getting more attention because they:

• Force you to look at every subscription, every “little” bill, and ask, “Do I still want this?”
• Make it easier to adjust quickly when rent, groceries, or gas prices jump
• Help families prioritize emergency savings and debt payoff during uncertain times

People are also using apps and spreadsheets to automate parts of the zero-based process. You might see categories like “Inflation buffer,” “Groceries overage,” or “Cost-of-living adjustment” added to budgets as people try to stay realistic about changing prices.

How to build your own zero-based budget (using these examples)

Now that you’ve seen several real examples of zero-based budgeting, here’s a simple way to create your own version using the same logic.

Start by writing down your take-home income for the month. If your income is irregular, use last month’s actual income to fund this month’s budget, like our freelancer example.

Then list your expenses in order of priority:

• Housing and utilities
• Food
• Transportation
• Insurance and medical costs
• Minimum debt payments
• Savings and sinking funds
• Fun and non-essentials

Assign amounts to each category until your income minus expenses equals zero. If you run out of income before you hit savings or fun categories, that’s a signal to cut or renegotiate something higher up the list.

When something unexpected happens, don’t panic. Go back to your budget and move money between categories. You’re not failing; you’re just rewriting the plan so the math still ends at zero.

The goal of all these examples of zero-based budgeting: step-by-step examples isn’t perfection. It’s awareness and control. You see your money clearly, you make decisions on purpose, and you adjust as life changes.

FAQ: examples of zero-based budgeting and common questions

What are some simple examples of zero-based budgeting for beginners?

Some of the simplest examples include:

• A single renter assigning income to rent, utilities, groceries, transportation, debt, savings, and fun until nothing is left unassigned.
• A student with a part-time job using income to cover tuition, books, bus fare, a small emergency fund, and a set amount of spending money—again, until income minus expenses equals zero.

The key is that every dollar has a job, even if that job is “sit in savings.”

Can zero-based budgeting work if my income changes every month?

Yes. The freelancer example above shows how to make it work by using last month’s income to fund this month’s budget. You can also build a “bare-bones” version of your budget that covers only the must-haves, then add optional categories as income allows.

Is there an example of zero-based budgeting that includes savings and debt at the same time?

Absolutely. The examples with Jordan, Alex and Morgan, and Lena all mix savings with debt payments. One common approach is to fund minimum debt payments and a small emergency fund first, then split extra money between aggressive debt payoff and longer-term savings.

How is zero-based budgeting different from other budgeting methods?

Many people use a “percentage” or “50/30/20” style budget. Those can be helpful, but they often leave money unassigned or based on rough estimates. With zero-based budgeting, you’re assigning actual dollar amounts to each category and adjusting them monthly. The examples of zero-based budgeting: step-by-step examples in this article show how detailed and flexible that can be.

Where can I learn more about budgeting and money management?

For additional guidance beyond these examples, consider:

• The Consumer Financial Protection Bureau for worksheets and tools
• General financial wellness resources from the Federal Trade Commission
• Personal finance education from universities such as Harvard University and other .edu resources

Use these real examples of zero-based budgeting as templates, then customize them to your own income, priorities, and goals. The method is the same; the numbers are yours.