The hand holds a coin and puts it in a piggy bank to preserve wealth, savings and financial success.
Zero-Based Budgeting May Help Finally Curb Your Impulse Spending
Giving free rein to impulsive buying could put you in long-term financial distress. Luckily, the zero-based budgeting method can help you maximize profits in the long run.
This method involves only justified expenditures, and putting all of your monthly income toward your expenses and savings so that you start from zero the next month.
Every expense is accounted for so there’s nothing to splurge with. If you’re new to budgeting, follow the 50/30/20 rule: 50% is spent on needs, 30% on wants, and 20% on savings.
After subtracting all the planned expenses, your income should adjust to zero. If it’s a negative amount, you’re overspending, while a positive balance means you’re under budget.
Zero-based budgeting can still be beneficial for those with varying incomes by using the lowest income earned as the planned income for the upcoming month.
This method requires time and attention, but with dedication it can help you better track your expenses and encourage more conscious spending so you think twice before splurging.