By – nsjfinancialservices
24.08.22 04:45 PM
No one wants to spend money, but it’s always felt like a privilege of the upper classes. Now with my $0 budget system, you can save money too!
The $0 Budget system is a tried-and-true way to help you save money, pay off debt and gain financial freedom
To start, it’s important to understand the difference between your fixed expenses (e.g., rent and utilities) and your variable expenses (the stuff that fluctuates from month to month). For example, if you’re a freelancer who makes $3,000 each month but loses their client at the end of March for two weeks without pay—that’s a variable expense!
The $0 budget works by setting up categories based on your spending habits. You’ll then assign each category with an amount that represents what you need to live comfortably in that area so there will be enough left over each month to put towards savings goals or paying off debt—in other words: frugality!
One of my favorite things about this system is how easily adaptable it can be; it doesn’t require complicated spreadsheets or calculators because all you need is pen and paper (or maybe even just a napkin). This process will take some time but once complete will become second nature once you get started using it every day.
Use this system monthly
The zero-sum budget is a way of creating a monthly spending plan that helps you stay on track. You will see the best results if you stick to this plan for atleast a year to see how it can transform how you think about your money.
You start by listing all the sources of income and expenses in your household, including all major and minor bills, investments, savings and any other expected or unexpected sources of income.
Next, you divide your total income by the number of paychecks you get during the month (for instance, if you are paid twice per month then double each paycheck). This provides an average amount to spend each week or biweekly pay period.
Once these numbers have been established for each category (income vs expense), compare them so that there is no deficit at the end of each month. If there is more money going out than coming in, then adjust accordingly by increasing revenue or reducing expenses until you reach a zero sum budget.
For every dollar you receive, you give it a purpose or job by assigning it to an expense category.
If you are new to budgeting, it’s important to know that there is no such thing as a zero-spending budget. That’s because there are always going to be some expenses that you can’t control, like taxes and insurance premiums. You also need an emergency fund so that if something unexpected happens (like your car breaks down), then you have money set aside to deal with it.
The $0 Budget System lets you choose how much of each category should go into your Emergency Fund and how much of each category should go toward paying off debt and saving for retirement. The rest goes toward discretionary spending—or more simply put: whatever else you want/need from month-to-month.
Each month, you assign the same dollar amount to each expense category.
The first thing you need to do is set aside a specific amount of money for each category. For example, you might have three categories: housing, transportation and food.
Set aside $300 each month for housing, $150 each month for transportation and $100 each month for food.
It doesn’t matter if it seems like too much or too little at first; once you get used to this system and realize how much money is really coming in every month, it will become second nature to adjust your budget accordingly so that all categories are being covered.
Any money that doesn’t get spent goes directly into savings.
The money you don’t spend, the more savings you have. And it’s a big deal! After you’ve added up all your expenses, any left over money gets added to your savings! That’s where the zero in zero based budget comes in. You extra money isn’t a free for all instead, you give that money a purpose, a goal, a job.
The more money we have saved up, the more options open up to us, like:
- Investing in yourself. If you know what you’re doing and can be self-employed, then investing in yourself might mean starting a business that makes money.
- Investing in your family members’ futures. This could include helping them pay for college or saving for retirement when they retire or buy a house or car for them someday (or all of these things).
- Investing in your business as it grows from small to large scale—while also providing a good income and benefits package for employees who work there (and hopefully being able to offer benefits like health insurance).
Use the $0 Budget to help you make every dollar count
You won’t be able to see all of this at first, but as you keep track of your spending, the $0 budget will become a valuable tool for helping you make every dollar count. It will show how much money you have leftover after meeting your obligations each month, and it will help guide decisions about what to do with that surplus.
It helps because it allows you to answer the question: “How much can I spend?”
Many people reach a point where they have an idea of which areas need improvement (they’re spending too much on clothes), but no clear plan for addressing them (how can I cut back?). The $0 Budget provides an answer by showing exactly how much money is available each month after accounting for essential expenses such as rent/mortgage and food costs.
In Conclusion
So there you have it! You now know all the steps to creating your own $0 budget.
To recap, these are just a few extra tips for making your budget work:
- Make sure you have everything accounted for in your budget (There are many free templates online that can help with this)
- Start by setting up direct deposit from one account into another so that money is automatically transferred each month, making it easier on yourself.
- Use credit cards wisely; make sure they’re paid off at the end of every month and never borrow more than what you can afford to pay back within a year.
Remember that budgets should be flexible
Figure out what works best for you based on how much income or spending happens each month.
