Create Your First Budget

The Problem

A blank budget is scary. Forty categories, forty empty boxes, and no idea what to put in any of them. Most people guess low, blow past the guess in week two, and decide budgeting does not work. The fix is to start from what you actually spent, then adjust on purpose until every dollar has a job.

What Zero-Based Means Here

Income − everything you assign (including savings) = $0

Income at the top is your Monthly Take-Home Pay from Module 2. Below it, every category gets an amount: the fixed bills, the variable averages, the debt minimums, and savings as its own line. When the net comes out to zero, nothing is floating. Every dollar has a job.

Zero is the target, not "as low as possible." If you finish with money unassigned, give it a job: an extra debt payment, a savings line, or a fun-money line you will not feel guilty about.

Start From Your Averages

The Budget Averages Report looks at your past budgets and transactions. For each category it shows what you budgeted on average, what you actually spent, and the difference. That is your starting point. It is a suggestion, not a decision. You will change most of the numbers.

Try It: Read Your Averages

1. Navigate: Budgets → Averages
2. Verify: a table lists each category with a Budget Average, an Actual Average, and a Delta column
3. Type: Number of months to include — 3
4. Click: "Update"
5. Verify: the averages recalculate for the last 3 months

Scan the Delta column. A big positive delta means you keep budgeting more than you spend. A big negative one means the opposite. Both are places your first real numbers should differ from the average.

Try It: Build the Budget From Averages

The Planning page creates a draft budget for the next period and can fill every line from your averages in one step.

1. Navigate: Budgets → Planning
2. Click: "Create Draft"
3. Select: Seed budget lines from — Use averages
4. Click: "Create Draft"
5. Verify: a new budget with a "Draft" badge appears on the Planning page with amounts filled in

Try It: Adjust to Zero

Now make it yours. The draft is a column on the Planning page, and you edit it right there. Work the big lines first. They move the total the most.

1. Navigate: Budgets → Planning
2. Verify: the draft column ends with Total Income, Total Expenses, and Net
3. Type: Paycheck — your Monthly Take-Home Pay from Module 2
4. Type: each fixed expense — the exact figures from your Monthly Fixed Expenses list
5. Type: each variable amount — start from the average, then raise or lower it on purpose
6. Verify: Net reads $0.00
7. Click: "Promote" on the draft column
8. Click: "OK" in the confirmation dialog
9. Verify: the column no longer shows the "Draft" badge

Each cell saves as you leave it, so there is no Save button. A draft only shows cells for the categories its source had an amount for; seed from a budget or from averages that already include a category to plan it here.

If the net is positive, you have unassigned dollars. Give them a job. If it is negative, you have promised more than you earn. Lower a variable line or a savings line until it balances. That choice is the budget. The app just keeps the arithmetic honest.

Three Mistakes to Avoid

• No savings line. Savings is an expense you pay yourself. Put it in the budget or it will not happen.
• Forgetting the yearly bills. The divide-by-12 amounts from Module 2 need their own lines.
• Copying the average and stopping. The average is what you did, not what you decided. Change at least one number on purpose.

Key Takeaway: Start from the Budget Averages Report, fill a draft in one step, then adjust each line until Net Cash Flow is exactly zero. Every dollar assigned, savings included. The report suggests. You decide.

Check Your Understanding

1. What does it mean when a zero-based budget "equals zero"?

   Answer: Income minus everything assigned, including savings, is zero. Every dollar has a job. It does not mean you spend everything.

2. Where do you find what you have historically spent per category?

   Answer: The Budget Averages Report, under Budgets → Averages, which shows budget averages, actual averages, and the difference for each category.

3. What should you do if your draft budget ends with a positive Net Cash Flow?

   Answer: Assign the extra dollars a job: an extra debt payment, more savings, or a fun-money line.

4. Why doesn't the app just set your budget amounts from the averages and finish?

   Answer: The averages show what you did. Deciding what you should spend is a choice about your priorities, and only you can make it.