How zero-based budgeting gave me freedom over my financial decisions

building a zero-based budget

The Slice: I’ve anxiously avoided budgeting for years. I spent a week building one and I never knew I could feel this relaxed about my finances. 

The Challenge: Use You Need a Budget to build a complete budget that accounts for all future spending.

Difficulty Level: hard challenge

Budget. The word almost tastes bad in your mouth. Kinda like diet, right? These words have a lot in common, actually. Both can function as a noun or a verb, and come to think of it, they also have the ability to induce fear and anxiety in many. So much in fact, that two-thirds of Americans just say no to the whole idea. Me.

And this holiday season, more than half of Americans are getting ready to shop for gifts without any budget at all, according to a survey conducted by LendingTree. Also me. Until now.

The magic number is zero

Ms. I-can’t-budget-and-I-don’t-want-to (still talking about me) knew she would inevitably get to the point where she would build a serious budget. It’s been a huge goal for myself this year, and one I didn’t know I would ever achieve. I’ve never had one before.

Prior to this challenge, I would look for ways to trick myself into spending less from using apps that silently hid my money from me to setting automatic deposits into savings accounts. With that came total uncertainty: lots of “I deserve this!” purchase rationalizations and “I can’t do that until I get paid next week” disappointments.

Although there are many ways to approach budgeting, I decided I would go with a zero-based budget, which is one in which every single dollar is given a purpose. So, let’s say I pay all my bills and have $300 left sitting in my account. I now have to assign, down to the last dollar, how those $300 are going to be spent: $100 groceries, $50 gas, $50 savings, $50 dining out, $25 coffee, $25 fun money. Nothing left over.

Getting to 0 means you've assigned every dollar to a category
Success. Every dollar has been assigned. (Where you assign your money can be adjusted at any time.)

I need a budget? You need a budget.

I enlisted help via You Need A Budget or YNAB, as it is affectionately called. I decided to go with YNAB because it’s an extremely popular program, there’s a 34 day free-trial, and the first year is free for college students. The budget software is $50 a year, otherwise. is a free zero-based budgeting option.

You Need A Budget interface
The YNAB budget template

The thing about YNAB is that it won’t let you budget money you don’t have, even if you know that you can count on it. I thought this was very rude. This was my biggest mental hurdle and admittedly, YNAB’s biggest strength. It took me hours to figure this out. HOURS. I read through the user guides and even sent an email to their very responsive help team to the tune of “I think there’s something wrong with your app sir or ma’am.” After an eternity, I realized that was the whole effing point: you can’t spend more than what you have. Why was that so hard for me to understand?

Work with what you got

Because my spending habits are structured in a way that depends on each paycheck, I could really only account for first two weeks of December. Once my next check clears, I will make up the difference for the rest of my December obligations. The goal is to eventually have enough money up front to cover the whole month when financial planning, thus,  breaking paycheck-to-paycheck dependency and furthering along my goals.

It’s only been few days, and I’m slightly obsessed. I feel extremely empowered. It’s given me total control over my financial decisions. Already, it’s made me reanalyze my cash flow and consider my immediate financial obligations. And I’m totally relaxed when I think about my finances: a new feeling.

It also doesn’t hurt that the average YNAB user saves $200 in the first month. I’ll have to let you know.

Andrea Aldana is Your Daily Apple’s finance contributor. She’s had a problem with spending before she gets it.

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