A budget is a plan that outlines your income and expenses. It can be used as a guideline for spending and saving money. Usually done on a month-to-month basis, budgeting provides us with an excellent visual and solid figures that can be used to justify the dollars and cents we spend.

Becoming a good budgeter takes time and it doesn’t come easy to everyone but you can get better at it. You can use a simple template on Excel, or if you have a higher skill level, you may know of better templated options. Plus, there are a lot of apps available on Android and iOS that can help make your budgeting easier.

When it comes to being able to afford your mortgage, budgeting is essential to some households. If you find it difficult to make ends meet after paying all necessary monthly bills, or alternatively if you simply want to save more money for the future, zero budgeting is like something that can benefit you.

What is Zero Budgeting?

Gather all of your expenses and your income statements to give you an accurate picture of how you spend your money. Start from zero and give every cent a name. Every dollar must be categorized, if you can do this – you’ve got yourself a zero based budget.

How can Zero Budgeting help me?

If you are thinking about making a major purchase such as buying a new car or home, you want your lender to see that you are responsible with your money. Lenders are looking at the money you have in the bank, your credit score and the money you owe. If you have a zero based budget, you may have extra money that can be saved and you might be looked upon as a person who deserves a little extra from your lender, since they will be able to see that you are financially responsible.

General Budgeting Tips:

  • Have a short term goal in mind.
  • Have a specific long-term goal in mind.
  • Figure out how much money you actually make after taxes.
  • Have accurate data on your income and spending patterns.
  • Use a budgeting tool that’s user friendly and you know how to use to the best of your abilities.
  • Be realistic and honest with yourself about your finances.
  • Adjust your budget periodically.
  • Come up with a timeline for how long you will want to budget – will you be budgeting every month for a year, or just a few months?
  • Name your categories wisely so you can get a full snapshot of your finances at a glance, when needed.

If you want to know more about general budgeting or to learn more about zero based budgeting, there are many resources available at your disposal online. You can also speak with a financial adviser for more detailed information to help keep your finances in check to ensure you qualify for a better mortgage.