Zero-based budget in a spreadsheet: one worked month

By Kitson Workshop · 3 October 2026 · 6 minute read

A zero-based budget has one rule: income minus everything you assign equals zero. Every dollar gets a job before the month starts: bills, food, debt, savings, fun. "Zero" doesn't mean you spend it all; savings and extra debt payments are jobs too. It means nothing is left floating, so nothing quietly disappears.

Here is one complete example month. The household and numbers are made up, but the arithmetic is real and you can copy the layout.

Step 1: start with take-home pay

Use the money that actually arrives this month, after tax and deductions. Our example household takes home $3,600. If your income changes month to month, plan with a low recent month and treat anything extra as a bonus to assign when it arrives.

Step 2: give every dollar a job

Work in this order, so the essentials are covered before the nice-to-haves: fixed bills, everyday essentials, debt minimums, goals, then wants.

Our first draft actually left $220 unassigned. Rather than leave it floating, we gave it jobs: $120 more to the extra debt payment and $100 more to the emergency fund. That's the habit: if "left to assign" isn't zero, keep moving money until it is.

Step 3: track the month, and move money when something runs over

By the last week, groceries were heading over. The zero-based fix isn't to quietly go over; it's to move money from another category so the plan still adds up. Here's how the month ended:

Three categories ran over by $103 in total. Utilities and transport came in $31 under, which covered part of it. The other $72 came out of the extra debt payment, which dropped from $320 to $248. Total spending still equals income, so the budget still balances, and you can see exactly what the overspend cost: $72 less off the debt this month.

Step 4: the month-end review (ten minutes)

• Was the plan wrong or the month unusual? If groceries run over three months in a row, the honest fix is a bigger grocery line and a smaller something else.
• Check the goals. In our example, $450 went to the emergency fund and sinking funds, 12.5% of take-home pay, plus $498 to debt ($250 minimums and $248 extra).
• Plan next month from zero again. Bills change; next month's plan shouldn't just copy this one.

The two formulas you need

Put income in one cell (say B1), planned amounts in a column (say B4:B16) and actual amounts next to them (C4:C16). Then:

• Left to assign: =B1-SUM(B4:B16). Keep changing the plan until this shows 0.
• Difference per category: =B4-C4, filled down. Negative means that line ran over.

That's genuinely all a zero-based budget needs. Everything else (charts, debt payoff dates, savings rate) is about seeing the picture faster.

This article is for education. It isn't financial advice. The household and figures are an invented example; use your own numbers. If debt is weighing on you badly, a free nonprofit credit counsellor is worth a call.