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The Zero-Based Budget: Powerful tool to help pilots through hard times

The sad reality is that many pilots in both business aviation and the airlines could soon be laid off if they haven’t already. Intuitively we know that this means we need to reign in the expenses and set a budget, but most of us know that’s easier said than done. Many are probably inclined to sit down and hammer out a plan with the other decision-makers in the household, but putting pen to paper is the easy part, right? Implementing the budget is what trips so many of us up. How do we coordinate spending between spouses and other household members? How can we be proactive instead of reactive? What do we do when an unexpected expense arises and screws up our finely crafted budget?


You’ve probably heard about online tools like Mint, which track your expenses and shoot out handy graphs to show you where your money is going. It’s very slick, and it’ll work for some folks, but it’s more of a passive system and doesn’t really show you how to deploy your money effectively. Spend too much on groceries last month? Mint will let you know after the month is over, but it doesn’t help you make real-time decisions.


A superior, active budgeting strategy is called ‘Zero-Based Budgeting’ (ZBB). In a nutshell, this method encourages you to assign a job to every penny of your monthly income. ZBB is a radical departure from the way most folks manage money, and after personally doing it for the past five years, I (Dylan) can confidently endorse this as the best method for families with professional pilots. If you’d like to take a deep dive into Zero-based budgeting, you can read this NerdWallet article or check out this Youtube Video.


The most popular version of ZBB is attached to a familiar name, Dave Ramsey, whose system many refer to as the envelope method. Dave’s process is simple. Step one: Immediately stop spending money on credit cards and transition to cash. Step two: Develop your budget for each spending category (i.e., rent, groceries, gas) and make a physical envelope for each category. Step three: cash your paychecks and physically put money into each envelope as required. This process is a simple but powerful way to force you to stop spending more than you make and stick with your budget. If there isn’t cash in the envelope, you can’t spend it. This system is built to work for the lowest common denominator, but it is tough for many modern families. So much of what we do is electronic, and since pilots frequently travel, bringing an envelope along isn’t practical or safe. Enter technology…


There are two big names in the Zero-based budgeting app game: You Need a Budget (YNAB, $89/yr) and Every Dollar (Dave Ramsey’s app, $129/yr). These platforms allow you to sync with your bank account and create electronic ‘envelopes’ where you can virtually store your money. They also sync transactions from your bank and credit card so you can avoid carrying around a ton of cash and live in the 21st century. I use YNAB, which has excellent credit card integration (so you don’t have to give up that precious Marriott Credit card!). While I haven’t used Every Dollar, many reviews say YNAB is superior unless you’re fully engrossed in the Ramsey universe. Whichever option you choose, the important thing is to transition to a zero-based budgeting system. It is one of the best decisions my wife and I have ever made. Taking control of our money has removed an enormous amount of stress from our lives, and it’s one of the first recommendations I make to professional pilots when they start their careers.


If there’s anything that I’ve learned over the last 15 years of professional piloting, it’s that things can change at the drop of a hat. It can be easy to lose oversight of your expenses, especially once you get that sweet captain upgrade...but history has shown us time and again that a pilot’s income can be cut in half or shut off altogether in the blink of an eye. Start building money management discipline now with a zero-based budgeting system, and you’ll be much better equipped to handle the inevitable ebbs and flows of our industry.



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