The 'One-Number' Approach To Budgeting

Life costs money.

And our goal is to always be spending our money intentionally.

We talk about many different approaches to budgeting because there is no one-size fits all solution.

The One-Number approach has us calculate how much money we can afford to spend on ‘flexible costs’ each week so that we only have to remember that One-Number.

1. Calculate our Fixed Expenses.

2. Decide on our desired Monthly Savings Amount.

3. Add up our Future Expenses such as taxes, any annual or bi-annual payments, expected or unexpected medical bills, etc.

4. Add together the amounts for Fixed Expenses, Monthly Savings, and Future Expenses.

5. Subtract this total from our monthly take home pay amount. (This will leave us with our monthly ‘Flexible Spending’ amount.

6. Divide your monthly Flexible Spending number by 4.3 (the approximate number of weeks in a month).

Voila! We have One-Number that we need to remember each week.

From there we can perhaps take out this amount each week in cash and then that is the amount we have to spend each week on Flexible Expenses.

Or designate one debit or credit card for our flexible spending amount so that we can easily track it each week.