The Money Pot
Does your money go into one big pile?
You’re not sure how much is going out.
You don’t really know how much you spent, but you know when it comes in and you don’t really have to think about it until the next time it comes in. When you look at the money pot all you really think about is whether you have money in the money pot or not.
This is a staple of living paycheck to paycheck you see with the money pot you reduce your stress and effort, but the ability to leverage what you have goes down as you don’t know what you have, and you can’t plan for the future.
What is the alternative?
An alternative to the money pot is zero-based budgeting for those with a lot of time on their hands this is a great option.
Every dollar you spend is assigned categorized and then reconciled on every single transaction. Simply put you need to give every dollar a job.
Zero-based budgeting is tight with a primary goal of capturing all expenditures in the budget.
Fundamentally this style is considered a bottom-up approach to budgeting but can add a lot of stress in time to do it right.
Introducing Super Simple Budgeting
So if the money pot is useless to plan, and zero-based budgeting is like having to become an accountant where’s the Goldilocks zone?
How about automatic budgeting using intelligence, elegant algorithms, and minor user input?