![]() ![]() When every penny spent goes through an analysis decision, you have more control of your finances. Zero-based budgeting allows for superior spending intentionality, easily cutting out unnecessary spending, reaching financial goals quickly, and more budget flexibility. You would then take that $20 and reallocate it toward a new goal so that every dollar has a name and a plan! Advantages ![]() Or perhaps you spent more than planned in another budget category, and you could use it there. Every dollar needs a goal and a purpose! If it doesn’t get spent on groceries, perhaps it will go directly toward debt payoff, or savings. You would then take that extra $20 that you didn’t spend on groceries (hooray for spending less than planned!) and put it toward something specific. You stayed within budget, yay! Goal met, right? With zero-budgeting, start with your income from each paycheck and plot out which bills it will pay for, how much you can afford for groceries and other variable expenses, and then see if there’s any room for saving, debt payoff, and investing until $0 are left unplanned.įor example, with traditional budgeting if you were to budget $500 for groceries and end up spending $480, the extra $20 would likely just sit in your bank account with no purpose. ![]() The main difference is that with traditional budgeting, you would set a limit for yourself on how much to spend on groceries, gas, and bills and try to stick to that. ![]()
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