Wouldn’t it be great if congress had a balanced budget? A balanced budget means income minus outgo equals zero. Another term for a balanced budget is zero based. Although congress has the luxury of spending more than they bring in, unfortunately you cannot or you will go broke.
Broke is exactly what many Americans are. The reason for this is simple; not paying attention to what income comes in and what expenses go out. They lack a plan.
A budget is a plan, and a zero based budget is a plan for every dollar that prevents spending more than you make on paper.
When you put together your budget and find extra money, what do you do with it? If you don’t place a name or category to it, it will leave you before you know it. So give the surplus a name and purpose, thus, making your budget balance at zero.
What happens if your budget is in the red or negative? That is a sign of overspending, lack of income or maybe both. Change one or both sides of the equation. Monthly budget deficits lead to increasing debt (refer to our federal government on how to accomplish).
The moral of the story is simple; have a plan, make it balance, and stick with it by using discipline and common sense. The zero based budget will get you on the right track to building wealth.
Question: Do you live on a zero based budget? Why or why not?