Zero based budgeting – tell your money where to go


The concept of zero based budgeting is that income equals expenses. This means that you budget for each and penny on your income. For example, if you earn R10,000 you will budget for the full R10,000 – so your budget will include everything from rent to black tax to your monthly spend on chocolates. In this way, you always know where your money is going.

Not knowing where their money is going is what kills a lot of people’s money situations. They just look up one day and find they have no money—and no clue about where it went.Remember, you’re the boss of your own budget. You get to tell every single rand exactly where it will go each month.

And don’t think of it as confining. Having a budget actually gives you the freedom to spend money! If you don’t tell your money where to go, it will still go but you won’t be able to control its journey.

Here are some common areas that eat your money up without you even noticing:

Eating out. It’s very easy to decide to eat out on the whim, without tracking how much you’ve spent on it in a month.
Car payments. When buying a new car, you can be bombarded by amazing add ons which cost from as little as R89 per month but can easily add an extra R1,000 or more on your car payment..
Groceries. It’s easy to pop into a supermarket to get the tomatoes and walk out with a basket full of snacks and other unplanned and unnecessary items.
Utilities. Shut the lights off when you leave the room. Entertain yourself with a book instead of the TV. Those are just a couple of ways to save, but they are big.
Clothing. We don’t need new clothes as often as we think we do, and buying from only when there is a sale can save you enough to make your jaw drop.

Zero-sum budgeting might be exactly what you need to get your finances under control once and for all. Why? Because it helps you identify problem areas, create limits you can live with, and make your money work for you.

All you have to do is face your spending head-on and follow the simple steps given below, to build your own zero-sum budget from scratch. It might not be easy, but you are sure to learn a lot about yourself and your own spending habits along the way.
Like it or not, a look in the mirror is sometimes necessary to make meaningful changes that last. In that sense, zero-sum budgeting will show you who you really are, flaws and all.

Tips for Zero based budget:
Budget for everything: Creating a zero-sum budget will only work if you are willing to budget for everything – even things you wish you didn’t have to budget for to begin with. When writing out your monthly budget, make sure to include all categories where you spend money. Doing so is the only way to ensure success!
Overestimate variable expenses: Variable expenses can be hard to estimate at times, especially when it comes to costs that fluctuate – things like utility bills and electricity usage. With these items, it’s advisable to err on the side of caution. If you overestimate how much you will spend, you can always transfer any “leftover money” to savings at the end of the month. Likewise, you can use it to take care of overages in any other category.
Track your spending once per week: Your new spending plan might take some time to get used to, but it will be easier to adjust if you’re able to track your spending as the month progresses. For example, your new R1000 monthly grocery allowance will be easier to swallow if you check your statements to see where you’re at at least once per week. Checking in frequently with each category will help you discover how much you have left to spend.
Prepare for setbacks and adjustments: Your new zero-sum budget might go off without a hitch, or it might be a total nightmare. Either way, it’s important to know that you’ll likely need to adjust and readjust your spending for categories as the months progress. For example, you might think that a R1000 food budget is entirely feasible, but find out that it is completely impractical in real life. When those things happen, make a note of it and change things up for the following month. Your zero-sum budget can evolve as you go: It should work as a tool to help you track your spending, but it shouldn’t be too restrictive.

If you are ready to try zero based budgeting, and have any questions, please email Zwi on

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