A zero-sum budget is one that has been planned to the last detail.
The objective, which might seem strange, is to spend every last rand in the pot (but never more). The catch is, every bit of money must be spent on exactly what it was allocated for – each and every rand in the budget is assigned a job. This way, no money is spent carelessly and there’s nothing left to waste. Although the concept might sound strange, this kind of budgeting is ideal for keeping Christmas spending in check.
Here’s how to create your zero-sum budget:
1. Record your monthly income
This should include pay checks, any income from small businesses or ‘side hustles’, and can also include money
you’ve made selling items online on sites like OLX or Gumtree. Use a notebook, or use a budgeting app like
22seven, and list your entire income.
2. List monthly expenses
Just because you’re putting together a budget for Christmas doesn’t mean you should ignore all your usual expenses. Start your budget with the necessities like bond, food, utilities, and petrol. Once you’re done with the essentials, list all your other monthly expenses – internet, entertainment services like Netflix, and your gym membership. Follow up with
any other expenses you can think of.
3. Cut and save
Cut down on any areas you can to start putting together savings for your Christmas budget each month. Make sure the goal amount you want to save for your budget takes into account all the trimmings, like wrapping paper, food and
decorations, as well as gifts.
4. Minus your income from your expenses to equal zero
If each and every rand of your income is allocated to something, the total should be zero when you minus that amount from your expenses. If there’s money left over, give it a ‘job’ – allocate it to something (even if it’s a treat).
If you don’t, you’re more likely to spend it carelessly and wonder where it went at the end of the month. With your
zero-sum budget, everything is accounted for. The key is to never spend more than the allocated budget. Stick to your zero-sum budget and you’ll find all the money-related stress will disappear from Christmas shopping, because
you’ll know exactly what things will cost, and it won’t affect money set aside for your other expenses.
Did you know?
South African dads receive more expensive Christmas gifts than other family members, according to Statistics South Africa. The average cost of gifts given to dads is R776.22, with gifts for moms averaging at R328.74. Gifts for kids range from R124.60 to R173.95.
COMPILED BY CAITLIN GENG PHOTO: STOCK.ADOBE.COM