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Why You Should Budget From Zero

Why You Should Budget From Zero

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You know when you see a child throwing a tantrum after having their iPad privileges revoked or dessert prospects threatened with an ominous, “no ice cream for you”?

I remember one such occasion while babysitting a shockingly tech savvy four year old. He was so glued to the computer, I had to physically remove his hands from the keyboard to turn off the screen and get him to the dinner table. In that moment, he collapsed to the floor in a dramatic fit of despair as if someone had cut off his lifeline.


How to Budget from Zero


These childish overreactions are familiar to us all – whether we’ve experienced them ourselves as the enforcing adult or witnessed them from afar at the supermarket checkout line. We laugh, shake our heads and think – “someday they’ll know what it really means to lose something”.

And yet, we adults aren’t much better. The mere suggestion of cutting back on a discretionary expense in favor of greater savings or more aggressive debt pay off triggers a defensive, even angry response, reminiscent of those childlike tantrums.

How dare you suggest I reconsider my need for a premium cable package or forgo an engagement ring equivalent to my consumer debt balance?

Yes, we’re all entitled to our own spending choices, but like children at the ice cream truck, let’s remember that we don’t need every item on the menu to satisfy our sweet tooth.


Cutting Back vs. Building Up

Much of the resistance I’ve encountered in response to my suggestions for budgeting seems to be triggered by an aversion to cutting back. The focus instantly skews toward the negative – “what I can’t have” or “what I have to give up”- turning many away from the foundation of fiscal responsibility- smarter spending.

What if, instead of starting from some preconceived notion of what is considered “normal” and cutting back, we approach our lifestyle from zero and build up from there- budgeting from nothing?

Rather than maintaining some arbitrary, hyper-consumer status quo and seeing everything that falls short of the McMansion, performance vehicle and luxury filled “American Dream” as sacrifice, we shift our perspective to recognize the abundance we’re already enjoying- in whatever form it takes.

Build Your Budget From Zero

Mr. Money Moustache exemplifies the value of this bottom up approach in his description of what many consider a lifestyle of extreme frugality …

“I mean, holy shit, we are […] living in an expensive house with a stream of luxury goods, services and food shooting at us from all directions. Not only do we bathe daily in this spectacular river of affluence, but we even walk casually away from it a few times a year in order to ride in a Jet Aircraft which allows us to sample other unnecessary parts of the world. The total bill for this nuclear explosion of consumption is an outrageous $25,000 per year.”

While this description may be dripping with disdain for the collective consumer consciousness, it’s totally true. Just as we prod our children, telling them “they’ll live” in the midst of their tantrums for being denied the latest toy, we’ll live too without the bells and whistles of the luxury lifestyle – and well at that.


Why You Should Build Your Budget from Zero


Let’s not forget to reground our own perspective when we start losing track of all the abundance we’re already enjoying.



Shifting your perspective to the former may prove the most valuable tool in promoting both your fiscal security and your happiness as a whole.


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28 responses to “Why You Should Budget From Zero

  1. Oh, I really like this idea — I’ll definitely have to keep that in mind. You’re right that we tend to think about cutting back rather than building up from zero income, which is interesting considering that all of us do actually *start* adult life from zero income!

  2. I think that’s key. It’s more difficult to make sacrifices when you have everything and can easily afford it.

  3. I thought about this in the movie The Good LIe (one of my favorites from last year), and how when the boys arrived here from Africa, they couldn’t believe the “luxury” of something as simple as a phone or ordering pizza. Stuff that seems so mundane to us. It’s hard to find the novelty in every single thing, but if we can TRY to appreciate more, we will want for less.

  4. I love this mentality. I think increasing from nothing helps you really double think what you need. For me, I’ve always had a car, it’s my biggest expense, probably coming in between $2-3,000 a year with insurance, registration, repairs and gas and yet the prospect of ever getting rid of it is inconceivable to me… because I look at it from a place of excess. On the flip side, everything about owning a home and furnishing it, etc., I look at as things that just take my money and I’m very cautious in all those areas of life.

  5. It is all about perspective! I am dealing with this with one of my kids who think they are entitled and it seems it almost doesn’t even compute for anything to be a bonus or a privilege …. just a right!

  6. Aah soo soo true. When we have everything then it really is difficult to cut back, but when we are at ground zero then it does become easier. Its like that joke where they say that if you are buying from your parents money then a 100 dollars item seems like a necessity, but when it comes to buying things yourself at times a 2 dollar item seems like a waste.

  7. Love this! I think this is why it’s been easier for me to live on less, because I’ve never had much to begin with. Scaling back can be hard for people who are used to a certain lifestyle.

    1. Likewise. Even though I grew up upper/middle, I never really had money of my own- no allowance and then crap salary for years. Really helped me become accustomed to a bottom up approach.

  8. Love the analogy here.. you’re exactly right in that people throw tantrums when they’re told to cut discretionary expenses! This post is a great reminder for everyone, including folks who consider themselves pretty frugal. It’s always smart to periodically evaluate your budget and I love the idea of working from nothing up, instead of trying to choose this or that to cling on to.

  9. “When you build from a place of nothing, everything is a bonus. When you come from a place of excess, everything is a sacrifice.” –> YES. And I think this has more to do with perception than reality. Lower your expectations and you’re going to be a lot happier.

  10. I like the concept and agree being grateful for what you already have is a great place to come from. Learning to be content with what you have is necessary. Unfortunately, most over consumed people will find this as difficult as cutting back, because they’re not trained in this thinking. People want cutting back and reeling in their spending to feel good, but that’s impossible – at least in the beginning. That’s why so many don’t do it.

  11. This is a really interesting perspective and it’s something that I think my husband and I been doing without really realising. We went from having “excess” in our lifestyles to being forced to cut back because of our debt. We were too mentally exhausted at that point to even have those adult tantrums (although we definitely had them in the past)! Now though, we live almost a back to basics lifestyle, only really paying for the things that we absolutely need. We can afford to live on one income now, although we choose not to – everything I earned gets saved. I guess that’s our way of building up from nothing!

  12. We were always frugal but since we’ve retired we have really started to watch things. It’s been nice to know we can make it on his retirement check and do the things we want by watching what we spend on other things

  13. I know exactly what you mean, budget management is a real challenge. Until recently, I used excel but recently I am looking for a appropriate software that will help me in this. Mainly I’m talking about controlling daily expenses.

  14. You and Mr. Money Mustache are so right. Here in the western world, we’re awash in luxury goods and non-necessities while many people on the planet spend their days scavenging food. I wonder how the average North American’s perspective would change if he or she changed places with any one of the billions far less privileged on the planet for a month. While grueling, we might come away better understanding of affluence, saving, and consumption. Thanks for writing!

  15. Great post! If more people learned the word no and learned to say it more often to themselves and their kids life would be much easier and fullfing. Since I learned to say no my life has been much more fullfilling and richer. No more cable tv, no new cars every few years and no more stuff to add to my home. With stuff out of the picture I can now concentrate on what gives me meaning in life- family and friends. Plus we now get to save for our future instead of working like a mad man for stuff.
    Your right it is easier to start from nothing than to give up stuff. But giving up materialistic things even though difficult is well worth it.

  16. I’m not sure if anything in this pertains to the actual title. I pay just the normal bills, electric, gas, water and food. We eat just one meal a day and it is home cooked from food we buy from super savings stores. I don’t have a house note as we paid our home in cash when we purchased it years ago. We don’t have one single credit card, don’t own a smart phone… we have one computer that I have had for over 5 years and the only simple thing we pay for is internet but it is crucial to my job to have internet access at home. We take care of my elderly mother and have been for the last ten years. We have not been out to see a movie in 5 years, have not eaten at a sit down establishment in over 5 years and still people tell us to cut back and we will have savings… Did I mention we don’t use heat in the winter or air conditioning in the summer either. Yeah we just can’t afford it. What do you tell those of us who are beyond cut back and did it without as much as a cry let alone a temper tantrum. I am 30 years old and can tell you going without has been extremely implemented in our life for many years. We go to work and come home, we talk and do little things like draw and talk about our future there is not entertainment. We do not even own a tv. I just want those who think they know it all, to take a look at true poverty and see that not everyone can save and sometimes there is NO room to “cut back”. Take the boots experiment, a poor man has 35 dollars to his name and he needs work boots, those boots range from $10 for the pair that will leak in a month to $50 for a pair that has a 10 year guarantee on them. However the man does not have $50 to spend on the more valuable and better quality pair, he buys the $10 boots monthly resulting in a $120 a year expense, but only $50 per 10 years for the man who had enough.

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