Build savings plan into Zero sum budget

What’s the best way to make sure you save some money each month? Start a zero-sum budget with a built-in savings plan. Besides the usual line items like rent, food and health care, earmark the exact amount you plan to save to invest for your future, along with funds set aside for emergencies. Zero-sum budgets are like puzzles where all pieces have to fit into one big picture, or account for every cent.                                                                                                                     

Make all the pieces fit into your monthly budget; Cut costs where you can              

Whatever line items you have, look for possible ways to save in areas like those in this sample budget:                                                 

  • Monthly net income: $4,119  Budgeted monthly: Possible ways to reduce monthly bills:   
  • Rent or house payment with taxes  $1,074                  
    Refinance at lower interest rate; Downsize                          
  • Groceries, household cleaners and supplies                800 
    Use coupons; Buy in bulk; Shop at sales
  • Car payment, car insurance, fuel, upkeep                    544
    Buy good, used vehicles; Buy new at 0%   
  • Health Insurance, medical and dental co-pays        426
    Start health savings account; Compare costs
  • Utilities, phone, internet, etc.                                     263
    Negotiate with carriers for potential deals
  • Furniture, appliances, upkeep, repairs                            120
    Buy with 0% interest; repair or refinish   
  • Clothing, personal care and grooming                          200
    Ask about specials; Buy on sale only; DYI
  • Entertainment, education, hobbies, misc.              200
    Eliminate those low-satisfaction pastimes
  • Donations, charitable causes, gifts                             200 
    Volunteer time; Give only hand-made gifts
  • Long-term savings to invest for the future                  200    
    Study and learn how to invest $$$$ wisely
  • Emergency fund savings                                             92
    Keep saving leftover amounts until needed
  • Total monthly expenses, including savings:           $4,119                                                                                        

Using zero-sum budgeting, calculate the amount of money coming in each month; then, set aside as much as it will take to pay all your bills, along with some savings. Treat savings like any another expense. Add a sensible amount to save to each month’s budget. If your rent or house payment is taking too much of your cash flow, downsize or cut costs in other areas. When you’re really serious about saving and investing money to get ahead:

. . . Look for less expensive housing and transportation                  

. . . Put a temporary moratorium on personal care and clothing purchases  

. . . Eliminate entertainment or check books and movies out from the library  

 . . . Shop around for better prices on insurances, repair services, groceries, supplies, etc.                                            

Make saving a top priority. Small sacrifices today could mean a better lifestyle for you tomorrow!

Manage Your Money . . . financial facts for a brighter future provided by

Advancd Asset Management LLC                          

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Ronald Van Surksum, CFP                4555 Wilson Ave SW – Suite 2      Grandville, MI 49418     

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