Term of the week: Zero-based budgeting
Zero-based budgeting is a technique of budgeting made popular by financial gurus like Dave Ramsey. When using zero-based budgeting, you are building a budget that at the end of the month will end with zero. There should be no dollars left over on the 1st of the next month.
It's incredibly simple:
Millennials benefit from zero-based budgeting by telling their money where to go before they lose track of it. With where technology is today, there is rarely a valid excuse for not knowing where your money is going at all times.
A caveat to this style of budgeting is that it is hard and frustrating at times. Bills do not come in on the first few days of the month, and it can be difficult to anticipate irregular income. However, this is the best way to save, invest, pay bills, and have a great quality of life simultaneously.
Have you tried zero-based budgeting before? What did you think about it? We want to hear from you!