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How to Make an Effective Zero-Based Budget During Pandemic

A budget is always part of our being accountable when it comes to our finances. Especially this time of pandemic when everything seems so shaky, all the more that we need to manage our finances properly. My husband and I will lay it out prior to every month so we can tell our money where it exactly has to go and not the other way around. 

Know well the condition of your flocks, and give attention to your herds…– Proverbs 27:23

The Zero-Based Budget

In our household, we make our budget using Zero-Based Budgeting Method. I first heard about this method from Dave Ramsey. It is a way of budgeting where income minus tithes, savings and expenses equals to zero. You are allocating your money to the different expense categories and you’re making sure that your expenses match your income that month. It’s basically a plan for your hard-earned money so you’ll know exactly where they are going.




The Best Formula: Zero-Based Budget Formula

If you are new to this method, this is explained by the formula below:

Income – ( Tithes (10%)+ Savings/Investments(20%) + Expenses(70%)) = 0. In this formula, you are giving God what is His first , then you pay yourself second and you pay others last. Watch the video below for the step-by-step tutorial on how to make an effective budget using the Zero-Based Budget Method. 

Prior to our debt freedom, when it comes to our expenses, we prioritize our needs first, debt payments second, and things that we can live without last. When you deduct the tithe, desired savings, and various expenses from the income, the result should be zero.


As you can see, tithe is included in our budget. Our family believes in tithing. The tithe is 10% of the gross or total  income and this shall be given back to the local church that takes good care of us spiritually. The tithe is not ours, it is God’s so it is just right for us to bring Him back what belongs to Him.

Malachi 3:10 says, “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it”.


We also believe in giving. We can’t give what we don’t have but we also believe that whatever our situation is, there is always an opportunity that we can give. Giving is not only talking about money. We can give out our time, talent and treasure. So look for what you have as of the moment and use it to bless others. If in this season of pandemic, God has blessed all the works of your hands then you are blessed to be a blessing. 

The 20% of our income is put into our savings/investment accounts. In our case, we prioritized our Emergency Fund first so that when an unexpected expense arises, we’ll have something that we can take out so we can deal with it without borrowing money or going into debt again. Now that our emergency fund is fully funded, we are now using that 20% to invest in our future and our children’s future.

Living Below our Means

Living below 70% of our total  income every month is our goal. Honestly, there were times when we spent more than 70% of our income due to some unforeseen things. That is why after we got out of debt early in 2020 we worked hard to save for our emergency fund which is 6 times our monthly expenses to avoid going over our budget because of different emergencies. This is very useful as all of us have witnessed that due to lock downs there are a lot of businesses that are closing. As per the Philippine Statistics Authority in January 2021,there were already 4 million  Filipinos who lost their jobs during this pandemic. If you still have a job today, be thankful for you are blessed.Thus, it is so important that while the stream of our income is still flowing, we need to save for emergencies and we need to manage our finances well by making an effective budget. 

The budget should be prepared prior to each month because it serves as the plan on how to manage the family’s finances for that particular month. Since there are usually different expenses to be incurred each month, we must prepare a different budget also for every month.

Ok, so here’s how we do it. Below are the five (5) effective steps that we are doing in making a budget.

Stages of Budgeting

1. Appraisal

Gather all important information for the budget like the following:

1. Total Monthly Income


  • Salary
  • Business Profit
  • Interest Income
  • Capital Gains
  • Side Hustle Income
  • Property Income
  • Royalty Income
  • Vouchers
  • Commisions
  • etc.

2. Bills/Expenses to Pay for the Month


  • Government Taxes
  • Food and Grocery
  • Housing
  • Transportation
  • Utilities
  • Kid’s Education
  • Debts
  • Giving
  • Personal Necessities
  • etc.

2. Planning

Write down all the categories of your budget on a budget sheet and allocate an amount on each of the items in each of the categories.


3. Execution

Carry out or implement the budget as planned. All of your spending should  stick to the budget. A plan without proper execution is useless.

4. Monitoring

To ensure that you are sticking to your budget, you need to track or monitor your expenses. You can use an app or pen and paper in order to do this.

Record all your expenses, big or small on a notebook, paper, Google sheet or expense manager app. My husband and I are constantly recording all of our expenses every day and we’re using the Budget Wallet ni Momshie for several years now to help us stick with our budget . Even a single peso counts.

Catch for us the foxes, the little foxes that ruin the vineyards, our vineyards that are in bloom. -Song of Solomon 2:15

5. Evaluation

Assess your budget if it is effective or not. Is there something that needs to be adjusted? In this stage you will have to compare the planned spending with the actual spending.

If it is just your first to three months in making a budget, most likely that you will have a lot of adjustment to make. But It’s ok. As for me, it took me 6 months or more before I finally figured it out that it was because at first, we do not have an emergency fund. There were a lot of emergencies and unforeseen situations at that time when we were starting to do our budget wholeheartedly. My husband needed to have an operation on his impacted tooth that cost us 10,000 pesos per operation and it happened twice in a year. Me and my children were also hospitalized several times. Although we had a  health card, we needed to buy our medicines, etc. from our own pocket. So, since we do not have an emergency fund yet, we took the money from our budget and everything was in chaos. It changed when our emergency fund was funded. Every time we have an emergency, we charge it to the fund and not from our budget. 

Get Your Free Editable Budget Spreadsheet Here!

Well, that’s it. I hope that this will help you in creating your monthly budget. Reach us by filling out the form below if you have some questions and want to know more about how to take control of your finances. You will also receive a copy of the editable budget spreadsheet that you can use and customize according to your family’s budget needs. We will be happy to help you in the best way we can. Let’s improve our way of managing our finances this year and let’s start with a budget. God bless you!

With love,


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