By MoneyBees
Give every dollar of your take-home pay a job: start from salary after CPF, set aside your monthly income tax, and assign the rest until S$0 is left.
A budget where income minus everything you assign equals zero. Every dollar gets a job before the month starts. Savings, debt repayments and a tax set-aside all count as jobs.
No. Zero means nothing is left without a job. If S$1,200 goes to savings and investing, that is part of the plan, and the budget still balances at zero.
Take-home pay, as that is what reaches your bank. For a citizen aged 55 and below, the employee CPF contribution is 20% of wages up to the S$8,000 monthly ceiling, so S$5,000 gross leaves S$4,000.
Singapore does not deduct income tax from your salary. IRAS assesses it once a year on the previous year's income, so setting aside a twelfth each month means the bill is already paid for when it arrives.
The 50/30/20 rule splits take-home pay into fixed shares for needs, wants and savings. Zero-based budgeting has no fixed shares: you assign each dollar line by line, which suits months with uneven bills.
Move money from another line so the total stays at zero. Overspending on food might mean less for fun or a smaller transfer to a sinking fund that month.
Cash stuffing is one way to run it: the spending lines are envelopes of cash. Zero-based budgeting works the same way with bank transfers, cards or an app.
Not as income. CPF goes to your Ordinary, Special and MediSave Accounts and can only be used for housing, healthcare, retirement and other set purposes, so it does not pay for day-to-day spending.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).