Is Zero-Based Budget The Best Budgeting Type?
No, a zero-based budget is not the best budgeting type. It consumes a lot of time. For people with hectic schedules or those who prefer a less involved approach to budgeting, Zero-Based Budgeting can be time-consuming and intimidating due to the requirement for meticulous recording and classification of every cost.
Furthermore, spending flexibility may be restricted by the rigorous allocation of every dollar, making it difficult to account for unforeseen costs or shifts in financial priorities without continuously adjusting the budget.
Another explanation might be that some who would rather use a more straightforward budgeting technique find Zero-Based Budgeting to be too complex. For those looking for a simpler way to manage their finances, having to justify every expense and guarantee a zero balance might be intimidating.
You can also see Why Zero-Based Budgeting is Important
There are many other budgeting techniques, but two well-known ones include Dave Ramsey’s budgeting strategy and the 50/30/20 rule. Although they share the goal of achieving financial security and stability, they diverge greatly from the zero-based budgeting strategy.
For instance, the 50/30/20 Budget Rule is a budget that clearly allocates your monthly after-tax income into three categories. The categories:
- You spend half of your salary on necessities.
- Thirty percent goes toward desires.
- You put 20% toward savings.
Compared to other budget strategies, you may find it easier to follow the 50 30 20 guidelines. You may avoid wasting important time and anxiety over what to do with your salary by limiting the number of areas you need to monitor to three.
While, the Dave Ramsey Budget Rule requires that people set aside every dollar of their monthly income for a certain category, making sure that their total costs and their total income are equal. The Dave Ramsey Budget Rule is monthly income less monthly spending equals zero.
This implies that you would report $5,000 in costs if your monthly income was $5,000.
Conclusion
Deciding whether the Zero-Based Budget is the best would solely depend on your financial goals and capabilities. The best financial advisors can not recommend only one budgeting style or method for everyone since humans are unique in various ways.
Although the Zero-Based Budgeting method provides a very comprehensive way of tracking and deliberate distribution of funds, the 50/30/20 Budget and Dave Ramsey’s approach to budgeting I mentioned in this article offer a more straightforward, adaptable, and goal-oriented options that might be more appropriate for people looking for efficient yet less time-consuming ways to handle their money.
The great thing about all these is that budgeting helps you get control over your finances.
