Any of us that have read Dave Ramsey know the term "zero balance budget." In a nut shell:
Money taken in - Money spent/allocated = ZERO.
Every dollar has a name. You control your money, not the other way around. But is this possible, every single month? While I would really like to say yes....I am not really sure.
Way back when....when we were working with the Financial Adviser, there was no way we had a zero balance budget. Unless we chose to not eat....no way. Stopping our retirement savings for the time being (which trust me, I reluctantly did) helped a bit, but not entirely. Cutting some expenses down or out....still, helped, but we weren't there.
After we fired him, I looked at the numbers again. Here is what we learned:
1) He took us at our word on our spending habits. Never had us track. While it was easy to pull up the grand totals on the CC, student loan, etc....the variable spending we used an educated guess. And in many categories, we were off.
2) The budget allowed for putting away for future expenses at at a fixed rate. While this is the ideal way to do it, it wasn't going to work for us in our current situation. We would have to take the months where got 3 paychecks (vs 2) to play catch-up.
3) He didn't even try to get at the heart of the matter: What got us there. All he did was try to patch us up.
With all of this....I have been trying to get to a real, manageable, realistic, Zero balance budget. I am still not there. While we aren't using credit (ok, I did use a little, but it is paid off), we aren't able to save for every little expense life has on a regular, consistent basis. Example....our upcoming "vacation" (AKA...a 14 hr drive to my parents, then 4 days later a 7 hour drive to MIL, then 4 days later home). Gas, tolls, spending money.....in reality, we should have a big pool of money ready for this. Nope....I will take some money out of each paycheck for the next 6 weeks for this.
I am not sure that in the beginning a zero balance budget for EVERYTHING is possible. For now, I am ok with hitting the major things....some planning on the other things. When we are at a point in our debt reduction where we can breathe a little more, I will revisit it. I would love to start saving now for next year's vacation....we just aren't there yet.