What’s Your Zero Balance? A zero balance is a specific amount of money in your bank account that you do not touch; it can also be a secondary emergency fund — since a zero balance is usually liquid and easily accessible.
Example Zero Balance:
Total Money In Account: $11,318
Zero Balance: $1,000
Total Money Available For Use In Account: $10,318
Side Note: If you tend to like to spend, keep your emergency fund in an account that is less liquid that will require 3 or more business days to access.
Some people desire to maintain a certain amount of cash on them — physically — or in their bank account. Establishing a monetary number that you want to maintain in your bank account cultivates a habit of financial discipline; it makes it to where you never have less than a certain amount of money in your account.
The benefits of having a zero balance include the following:
Avoid overdraft fees
Maintain a specific level of savings in your bank account for emergencies
Always be certain of the least amount of money you have in your account
If you have never thought of implementing a zero balance, then you can aim to start today.
How much would you like to establish as your zero balance? $500? $1,000? More? Choose a number that works for you, and make it a goal not to touch this money— ever; this money is your zero balance. This is the amount you consider to be $0— even though it is more than that.
Destiny S. Harris is a writer, poet, entrepreneur, teacher, and techie who offers free books daily on amazon. Destiny obtained three degrees in political science, psychology, and women’s studies. Follow her on Instagram, Facebook, or @ destinyh.com
This article is for informational purposes only, and it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.