And The Best Personal Budget Planning Method Is…
Over the years, many methods and statistical models have been developed to help individuals accurately track and assess their expenditures. Some of these are just as simple as taking a look at your previous expenditures and try to guesstimate the future using that data. Other methods involve a few more calculations and are often needlessly complex. With the introduction of budgeting software, many makers have gimmicks that will try to sell you complex mechanisms that they claim will help you reduce your debt and improve your situation. Many times, these methods don’t work as well as they claim. However, there is one personal budget planning method that has been proven to work, time and time again, and it is about as easy to do as you can get.
Zero-sum personal budget planning works much like one would expect it to. Simply figure out what your income and expenses are each month and subtract them. Is the number negative? If it’s negative, then you are overspending which in the long run will drive you into deeper and deeper debt. A negative result means that you need to take a good, hard look at how you can make that result at least neutral. Are there some expenses you could cut down? Is your cell phone costing you too much per month or could you save on gas by taking the bus a few days per week? These are example questions of what happens when your expenses are greater than your income.
Conversely if you find that that result is positive, this means that you have a surplus. Many budgeting methods stop here, however the power of “zero-sum” budgeting is that every dollar must be accounted for. It’s not OK to just say “well I have some extra money so I’ll spend it”. Set financial goals for yourself and include those as fictional expenses. So for example, if you had a surplus of $1,000 per month, you may wish to set expenses of $500 for “savings”, $400 for “Hawaii vacation”, and $100 miscellaneous. This way every dollar is given a task or a duty.
Personal budget planning can be tedious so it’s imperative that you choose the best personal financial software that implements this for you. Indeed, using this as a guideline and buying a good program to help you out can unlock a large number of financial opportunities that you never thought were possible!
We highly recommend an extraordinary personal financial software program, You Need A Budget (YNAB) to help you get your expenses under control for good personal budget planning. Take the Free 7 day trial and see for yourself how easy this program is to use. Plus, if you decide to purchase, we offer a 10% discount for a limited time. (Enter coupon code crownfinancial). Don’t delay, get the best personal budget planning program now.
