Can getting one month ahead save your budget?
There are usually ways to save money each month — believe it or not.
For instance, once upon a time, my husband and I were pretty clueless when it came to how we spent the money we earned at our 9 to 5 jobs. We made a decent income but struggled to keep track of where it was all going and, more importantly, why it always managed to disappear into thin air. I won’t bore you with the details again, but we ultimately discovered that we were spending ridiculous sums of cash on groceries and eating out, home repairs, and miscellaneous frivolous purchases. But how did we find that out? Now, that is the interesting part.
Using a Zero-Sum Budget
Once we decided that we needed to make a change, we poured through bank statements from previous months and began tracking our current spending. This led to a plethora or discoveries — including the realization that we were eating out more than we were eating at home and were much deeper in debt than we knew. Still, we kept digging through data and strategizing a plan for debt repayment and escape. However, as we put all of our efforts into figuring out how to create some sort of budget, I realized something. Our incomes were fluctuating — a lot. With that juicy detail in mind, we talked endlessly about what we were going to do about it. After all, how could we budget without knowing how much money we would make in any given month? And how could we create a plan of action when the most crucial piece of data (our income) was missing? My light-bulb moment came when it dawned on me that, instead of budgeting on this month’s income, we could build a budget based on what we earned last month instead.