How to Repay Massive Amounts of Debt With a Zero Sum Budget
A few years ago, I was successful at budgeting for the first time, and it helped me pay off my student loan.
I had tried budgeting before with things like Mint.com but was never able to stick to the process.
So, I created my own budget method with pen and paper that helped me control my money instead of having it control me.
The budget I ended up creating was a unique take on the zero-sum budget. The main difference being that in the textbook definition of the zero-sum budget, you use this month’s income to pay for next month’s bills.
I’m guessing right now you don’t have extra bill money laying around to get ahead by one month.
Ha! Neither did I.
Instead, I created a zero-sum budget method where you can use this month’s income to pay for this month’s bills.
So, of course.
I made a zero-sum budget workbook with my budgeting method that you can use to replicate the same technique. Grab the workbook here.
But, first, let me explain:
The Zero Sum Budget Explained
It’s called a zero sum budget because your income minus expenses, debt, savings, investments, etc. should equal zero.
The budget is more centered around the cash you’re bringing in than the cash that’s going out.
You look at your income and give every dollar and cent a purpose.
With a traditional money management system like Mint.com, you make estimates of how much you’ll spend in each area for the month.
Then you monitor progress throughout the month.
For me, there’s too much gray area in this type of budget.
I don’t have the presence of mind to check my budget daily or weekly to make sure I’m on track.
This type of projected budget, in my opinion, gives you an overview of your spending, but not how it relates to the actual money you’re bringing in.
You can estimate all you want, but if what you spend sums up to be more than the cash you’re bringing in you’ll eventually rely on credit cards.
A zero sum budget is different.
You give the money you earn a specific job.
Way, way less ambiguity here.
Putting the Zero Sum Budget into Practice
When I put it into practice, the zero sum budget was easier to keep track of than a traditional budget.
I only needed to check my budget each paycheck (bi-weekly) which is when I distributed money according to my budget.
I always thought budgeting was tough, but this totally dumbed down version of the budget I did with a pen and paper is what I found helpful for aggressive debt repayment.
Get a Step-by-Step Guide to Creating This Budget…
Back to the budgeting workbook.
I created a 50+ page workbook just for you with nifty zero-sum budget worksheets to help you create this budget from scratch.
The workbook includes:
- A discussion on how to set + meet your money goals
- How to improve your mindset to make this zero-sum budget work
- 8 Steps for creating this budget with an example
- Strategies to cut your bills to balance your budget
Snatch up your workbook >>> here!
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