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Budgeting & Personal Finance

Zero-Based Budget

Definition

A budgeting method where every dollar of income is assigned a specific purpose, so income minus expenses equals exactly zero. Unlike traditional budgeting where you track spending after the fact, zero-based budgeting is proactive: you plan where every dollar goes before the month begins. Categories typically include necessities, savings, debt repayment, and discretionary spending. This method is especially effective for freelancers with variable income because it forces you to prioritize spending based on actual earnings each month.

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