Businesses and individuals benefit from careful money management and financial responsibility. In fact, it is virtually impossible to care for your needs and wants without budgeting and understanding exactly where your money is going. Some companies may get by with a basic idea of what funds are coming in and what expenses are going out, but individuals who are strapped for cash — even living paycheck to paycheck — may completely forgo budgeting. This is a mistake.
Zero-sum budgeting is popular for a reason. Even with just a pen and pad of paper, people can take steps toward controlling their finances. Unlike an operating budget or a cash flow budget, a zero-sum budget takes a micro look at every penny that goes in and out of your checking account. This approach is thorough, and it’s the best way to get a grip on your savings while allowing you to spend on the things you and maintaining control over the areas needed to ensure a comfortable life.
The benefits of zero-sum budgeting are multifaceted and include managing one’s debt; eliminating waste; precisely balancing one’s budget; avoiding overspending; and accounting for factors such as savings, investments, food, and entertainment. This means your budget will account for everything that will affect your bank statement, from annual expenses to monthly bills and daily costs. There are many other benefits to this approach, and it can be done starting today. Take this quiz to test your knowledge of this budgeting technique and learn what else you need to do to stay on top of your finances.