Mar 22

Cash Flow Budgeting Summary

Posted by Peter Marmara-Stewart at Friday, March 22, 2019

We are now at the last leg of the Cashflow Series. By now, we are hoping you have found a budgeting technique that best suits you.

To get a brief preview, we have summarised the key points for Cashflow Budgeting:

We hope that over the last weeks, we have provided you with some insight as to the importance and value that good cashflow budgeting can provide you. Now, we are going to recap the key points that we have covered, so that you can have everything you need to get going to start your journey.

Over the last several weeks, we have covered a number of aspects to Cashflow Budgeting and Management, starting with the fact that most of us are aware that we should do it, but we don’t.

We discussed the power and control that you can gain for your financial future, by preparing and taking control of your budget whilst making some substantial and beneficial changes to your life; so you can have success and achieve financial freedom.

The importance of goals was something that we went over, and more importantly, how you go about achieving those goals and about the substantial improvements that having accountability partners can make in achieving your goals. Remember, by having a specific accountability appointment with a person you have committed to, you go all the way from as low as 10% to 95% chance of achieving your goals. Having the goal is not enough. You need to make it happen - plan it, execute it, and have some accountability in place.

Subsequently, we went on to show you why personal budgeting is brilliant, how it will help you see your financial direction, keep you on track, and even improve your attitude when you see your growing wealth! Do not let it pass you by and take control!

Finally, we showed you my favourite budgeting technique: The Zero-Sum Budget. It is an absolutely great strategy for formulating a budget and making sure you allocate all your money, and do not give yourself excuses for not achieving your goals. It helps you prioritise and focus on the most important things for your money.

Your next step is to call us on 03 5134 1778, or email us at to make time to meet. If you have some business and financial goals you want to achieve, and you need help, please do not hesitate to contact us. We have some great programs for both your business and personal goals.

Mar 15

The Power of a Zero-Sum Budget

Posted by Peter Marmara-Stewart at Friday, March 15, 2019

In our last article, we discussed the power of budgeting. In this article, we explore my favourite way to formulate your budget. It is called a Zero-Sum Budget.

The Power of a Zero-Sum Budget

In the midst of the many articles on budgeting systems and strategies, a less publicised (but equally important technique) is the Zero-Sum Budget. This strategy involves "spending" every dollar that you make. However, you are not 'spending' your money in the usual sense of the word. In this situation, it refers to allocating your entire earnings into appropriate categories. The following steps demonstrate how you can apply this kind of budgeting:

Step 1: Determine your Single or Combined Total Salary

For most salaried workers who are paid on a monthly or fortnightly basis, this step is simple. Others may have to put in a little more effort if pay is based on an hourly rate, or particularly irregular. Try to work out your income as a monthly amount - you can then use the strategy of paying for next month's bills using this month's income. By always being "one month ahead", you will find your budget much easier to plan and keep track of.

Step 2: Itemise Your Bills

Once you know the total amount of money coming in, your next step is to work out how much you need to spend next month for bills, groceries, everyday expenditures, etc. Be aware that some things may be yearly or quarterly expenses. Try and include everything you can think of, as the more accurate it is, the better your budgeting will be. Please find below an example list for your reference:

- Mortgage: $1,426
- Fuel/Miscellaneous: $200
- Electricity: $200 (estimate)
- Mobile Phone: $55
- Gas: $25 (estimate)
- Internet: $35
- Groceries: $500
- Life insurance: $77.31 (paid quarterly)
- Daycare: $500
- Rubbish: $56.25 (paid quarterly)
- Health Insurance: $377

Total: $3451.56

Step 3: Compare and Contrast

Once you have listed your income and expenses, you will notice how much is left over. How is this money currently being used? You may realise that you are wasting it on things you do not really need, or you may be gradually saving it. Regardless of what you decide to do with this money, the point is, you now have the knowledge of how much is left and can therefore make an informed decision on what to do with it.

For example: If a couple had a net income of $7000 for the month, a zero-sum budget may look like this:

- Mortgage: $1426
- Mobile Phone: $55
- Electricity: $200 (estimate)
- Health Insurance: $377
- Gas: $25 (estimate)
- Life insurance: $77.31 (paid quarterly)
- Groceries: $500
- Rubbish: $56.25 (paid quarterly)
- Daycare: $500
- Short-term savings: $1500
- Internet: $35
- Long-term savings: $1500
- Fuel/Miscellaneous: $200
- Holiday Fund: $548.44

Total: $7000.00

This strategy may also bring to your attention that you are actually spending every cent you earn. In this case, you might need to start considering the things you could live without. Some possible items you could cut back on are your pay TV, eating out, or excessive entertainment spending. Remember, everyone's lifestyles and priorities are different and it is up to you how you allocate your money.

Step 4: Make a choice and stick to it

Once you know your excess cash flow, you can decide what you would like to do with the extra money. You might decide to pay off some debts, save, invest or put it towards a financial goal. The only trick is - if you decide to allocate a certain amount of money somewhere, stick to your decision and put it there straight away to avoid spending it on something else.

Step 5: Keep on top of your spending

It is important to check in every now and then throughout the month to make sure you are not spending over your self-allocated limit. Try to stick to the motto, "when it's gone, it's gone". It may be painful in the first few months, but it can be one of the best ways to create good habits.

Step 6: Make Adjustments

It can take a few months before your Zero-Sum Budget is working efficiently. Do not be concerned if you have to make adjustments, as it is all part of the budgeting process. As with anything, you will become more aware of where you may need to allocate more funds to, or where you can easily shave a few dollars off here and there.

Don't Forget

One last (but very important) part of your Zero-Sum Budget is an emergency fund. This is crucial in circumstances such as an unplanned medical emergency or car issue, and will allow a bit of leeway so that your whole month's plan will not have to be abandoned. Just remember that when you have tapped into these funds, try to replace them again as soon as possible.


The power of using Zero-Sum Budget is that it allocates all of your money, so the opportunity to spend it on things that you don’t really need is no longer there. It helps you focus and prioritise. If you need help with your budgeting, call our office to make an appointment with one of our Team on 03 5134 1778.

Mar 08

3 Reasons Why Personal Budgeting Is Brilliant, Not Boring!

Posted by Peter Marmara-Stewart at Friday, March 08, 2019

If a business owner said to you that they run their business without a budget, what would you think? You would think they were incompetent! Or perhaps lazy, or even both?

What do most families do?

When you think about it, a family is actually like a mini business. There is income, expenses, and hopefully, something left over to invest and to enjoy.

So why don't most families operate to a budget?

After all, a personal budget helps you to see your financial direction, and helps you stay (or get back!) on track. It is a great comfort.

One reason some people do not put together a budget is because, it makes them feel overwhelmed, or too busy, and leaves them feeling like life is too complex to keep track of all that.

Well the good news is, we can hold your hand through the process, which in turn, makes it easier for you.

Before we look at the 'how' aspects, let's consider 3 more reasons why a personal budget is such an important tool in helping you achieve your financial goals and dreams.

1. Most of your money is already spoken for long before you get it

The money you earn has already been promised to keep the electricity on, make the loan repayments, and pay for the insurance. What most people don’t realise about budgeting is that, it is really honouring the commitments you already have.

Now since we are all honest people and plan to pay these bills, the first step is to track these bills, and see what is left over for your day-to-day living.

2. Your day-to-day living money is spread all over the place

Some of your day-to-day living money is in the bank, and some is in your purse or wallet. Some may even be with your partner or children, if you have them.

You need a simple system that allows you to track day-to-day expenses, such as fuel for your car, shopping, and discretionary spending expenses.

We do not suggest you try to keep track of every cent of your day-to-day living money, as this would provide little benefit for the amount of effort that would be required to obtain that level of detail.

Instead, you need to identify your main day-to-day expenses, and make allowance for all other minor day-to-day expenses.

Here's a key: You need a system that is so easy to use, that you keep using it. You can track the day-to-day expenses by entering them into a spreadsheet, or better yet, use a tool like MyProsperity. MyProsperity can automatically pull in bank feeds, which can save you a lot of data entry.

3. The Number 1 reason people give up on their budgets is that they don't have the right attitude

It is ALL in the attitude!

Have you ever attempted to budget and given up in frustration? What is the reason your budgeting attempt failed? What will make you stick to it?

Think about this…

One of the reasons, if not the top reason so many people give up at budgeting, is attitude. If you think of it as a penny-pinching sacrifice instead of a means for achieving your financial goals and dreams, how long are you likely to stick with it?

Think about the difference between going on a diet, and eating healthy. One is negative and restrictive; the other is positive, and allows you to indulge every now and then while still achieving your goals.

To increase your chances of success, work on your attitude first.

Many people refuse to budget because of budgeting's negative connotation. If you are one of those people, try thinking of it as a 'spending plan' instead of a 'budget'. Once you have attempted to budget and failed, the bad feelings associated with any type of failure can keep you from trying again. Don't give up!

The cold hard reality

Let's face it. Money is a tool that enables you to reach your goals in life. But the cold hard reality is that, until you know where your money goes, you cannot make conscious decisions about how to use this tool effectively.

A budget (or spending plan!) shows you exactly where your money goes and provides a clear plan. It also lets you save for the things that are important to you, like a new house, a new car, a comfortable retirement, a tertiary education, high quality health care, travel, or whatever your particular goals and dreams happen to be.

Now that is exciting!

Whatever YOU decide you want to achieve and save for, you can. All you need is the right attitude, a goal to aim for, and a (spending!) plan.

Avoid This Pitfall

There are several universal budgeting concepts that every successful budget will include. But one of the most important features of a successful budget is, for it to be easy to use and suitable for your needs.

Trying to use a generic, complex, one-size-fits-all budget won’t work. A simpler approach makes it easier to stay committed. If you stick to a realistic and effective budget long enough, the rewards will keep you motivated. In the meantime, do whatever it takes to keep yourself going.

To summarise, the 3 steps for effective personal budgeting (spending planning!) are: Build a Budget, Track Income and Spending, and Compare Budget to Actual. Once you start budgeting with a positive attitude, you will see the difference a budget (or spending plan) can make in your life. Your next step is to call us on 03 5134 1778 and organise a time to have a chat. We would love to discuss this with you further, and help you to get on track towards achieving your financial goals.