How to Budget With One Number
Budgeting doesn't have to be complicated. Most people fail at budgeting because they try to track too many categories and make too many decisions. The one number budget changes everything by focusing on just one simple question: "How much can I spend freely this month?"
What Is the One Number Budget Method
The one number budget tracks just your available discretionary spending after all fixed costs are covered. Instead of juggling 15 different spending categories, you focus on one simple question: "How much can I spend freely this month?"
This method flips traditional budgeting on its head. Most budgets fail because they're too complicated. You're tracking groceries, entertainment, gas, clothes, and a dozen other categories. It's exhausting. The one number budget eliminates that mental load entirely.
Why Traditional Category Budgets Don't Work
Traditional budgets create decision fatigue. Every purchase requires you to check multiple categories and do mental math. Did you overspend on groceries? Can you move money from entertainment to gas? It's like playing financial Tetris every day.
The one number method works because it mirrors how you actually think about money. You don't naturally categorize a coffee as "dining out" versus "entertainment." You just want to know: "Can I afford this right now?"
Research suggests that people using simplified budgeting methods tend to maintain them longer than complex category systems. The reason? Less friction means better habits. Building sustainable financial habits starts with systems you'll actually use.
"But what about tracking where my money goes?" Here's the thing - the one number budget doesn't ignore your spending patterns. It just handles the tracking differently. Your fixed expenses and savings happen automatically. Your discretionary spending gets one clear boundary.
This isn't "too basic" - it's strategic simplicity. You're not losing control. You're gaining clarity. The most successful entrepreneurs and growth hackers use this principle: optimize for what matters most and eliminate everything else.
How to Calculate Your One Budget Number
The math behind your one number budget is simpler than you think. You need three basic pieces: what comes in, what must go out, and what's left over.
Step 1: List Your Fixed Monthly Expenses
Your fixed expenses are the money that leaves your account no matter what. Start with expenses that don't change month to month. Rent or mortgage payments, insurance premiums, minimum debt payments, and utility bills all count here. Don't forget subscriptions you actually use and automated savings transfers.
Here's where most people mess up—they forget about savings. Your emergency fund contribution and retirement savings should be treated as fixed expenses. Pay yourself first, then spend what's left. This way, you're not hoping there's money left over at month's end.
Essential Fixed Expenses to Include:
- Housing costs (rent/mortgage, insurance, utilities)
- Transportation (car payment, insurance, gas budget)
- Debt minimums (credit cards, student loans, personal loans)
- Insurance premiums (health, life, disability)
- Savings transfers (emergency fund, retirement contributions)
Pro tip: Round up each expense by a few dollars. This creates a small buffer that prevents overspending later.
Step 2: Determine Your Available Spending Money
Take your monthly after-tax income and subtract all fixed expenses. What's left is your one number—your discretionary spending allowance.
Let's say you earn $4,000 monthly after taxes. Your fixed expenses total $2,800 (including $400 in automated savings). Your one number becomes $1,200 for groceries, entertainment, dining out, and miscellaneous purchases.
You'll want to set aside money for those sneaky irregular expenses that pop up throughout the year. Think car maintenance, holiday gifts, or annual insurance payments. Break these down into monthly amounts and subtract them from your discretionary spending.
If you spend $1,200 on holiday gifts annually, set aside $100 monthly. Your true discretionary spending drops by that amount, but you won't scramble for gift money in December.
Step 3: Set Up Automatic Systems
Once you've calculated your one budget number, automation becomes your best friend. Set up automatic transfers for all your fixed expenses and savings goals first thing after payday.
Most banks for savings accounts offer free automatic transfers. Schedule these to happen 1-2 days after your paycheck hits. This way, you're never tempted to spend money that should go toward bills or savings.
Create separate checking accounts if possible. Keep one for fixed expenses and another for your discretionary spending number. When you check your "fun money" account, you'll know exactly what you can spend without doing math.
Quick reality check: If your one number feels impossibly small, you have two options. Increase income or reduce fixed expenses. There's no magic trick to spend money you don't have.
Your emergency fund should be separate from this calculation. Emergency money isn't part of your monthly budget—it's insurance against life's surprises.
Why This Simple Budgeting Method Works Better
Traditional budgets fail because they're too complicated. You've got 15 categories to track. Food, gas, entertainment, clothes, subscriptions—the list never ends.
Your brain gets tired making all those micro-decisions. Should coffee count as food or entertainment? What about that Netflix subscription you share with your sister? By the time you figure it out, you've already given up.
The Psychology Behind Simple Systems
The one number budget eliminates decision fatigue completely. You know exactly how much you can spend without thinking about categories. It's like having a simple yes or no question instead of a multiple-choice test.
Your brain loves clear boundaries. When you see your spending number hit zero, you stop. No calculations needed.
Automatic Priority Setting
Here's the genius part: this method forces you to pay yourself first. Your savings and bills get handled before you even see your spending money.
Most people budget backwards. They spend first, then try to save what's left. That's why approximately 37% of Americans can't cover a $400 emergency according to recent Federal Reserve data. The one number method flips this script.
It Grows With Your Income
Making more money? Your one number gets bigger automatically. Got a raise? More discretionary spending without redoing your entire budget system.
Traditional budgets require complete overhauls when life changes. The one number method adapts instantly. Whether you're making $3,000 or $10,000 a month, the system stays the same.
Category budgets create artificial scarcity. You've got $50 left for food but $200 for entertainment. So you convince yourself that movie theater popcorn counts as entertainment, not food.
The mental gymnastics are exhausting. Plus, life doesn't fit into neat categories. The one number method reflects how you actually spend—flexibly and spontaneously within your means.
Implementing Your One Number Budget System
Choose Your Tracking Method
Pick a tracking system that you'll actually use every day. You've got three solid options:
Digital Apps
Most people love using banking apps that show real-time balances. Set up a separate checking account just for your discretionary spending. Transfer your one number there each month. When it's gone, you're done spending.
For budgeting apps, consider options like Monefy which offers simple expense tracking that aligns perfectly with the one number method. Other apps like Mint or YNAB can also work, but honestly your bank's app is usually enough.
Physical Tracking
Old school works too. Write your number on a sticky note in your wallet. Subtract purchases as you go. Some folks use the envelope method - put cash equal to your number in an envelope each month.
The Hybrid Approach
Use your debit card but check your balance every few days. Set phone reminders to peek at your spending account balance. This keeps you aware without going full cash-only.
The key is checking your number before you spend. Set up notifications or reminders to check your balance. Check your balance before any purchase over $20. This takes 10 seconds and prevents overspending.
Handle Common Scenarios
Irregular Income: Calculate your one number using your lowest monthly income from the past year. This creates a safety buffer during lean months. Freelancers and gig workers can use their baseline income for fixed expenses, with extra income in good months becoming bonus spending money.
Seasonal Expenses: Build these into your fixed expenses by setting aside money monthly. Holiday gifts, car registration, and annual subscriptions shouldn't surprise your budget. Your emergency fund handles true emergencies, but predictable irregular expenses need their own monthly allocation.
Income Changes: If your income drops, your one number budget makes cuts simple. You already know your true fixed expenses. Your discretionary spending number just gets smaller. Got a raise? Don't just increase your spending number. Split income increases 50/50 between savings and lifestyle upgrades.
Build the Daily Habit
Set a weekly money date with yourself. Review how much you've spent and how much remains. This isn't about judging your choices—it's about staying aware.
Check your spending account balance before making any purchase. Set up account alerts when your discretionary spending drops below certain amounts. Maybe at 75%, 50%, and 25% remaining. Your bank can text you these updates automatically.
Troubleshooting Early Challenges
When You Overspend: Don't abandon the system. Figure out what went wrong and adjust next month's calculation. Maybe you underestimated grocery costs or forgot about a subscription. Either reduce next month's spending allowance by the overage amount, or find ways to earn that money back.
If Your Number Feels Too Small: Review your fixed expenses. Can you reduce your grocery spending or negotiate bills? Sometimes the problem isn't the system—it's lifestyle inflation.
Building Consistency: Start with a higher spending number if needed. It's better to succeed with a loose budget than fail with a tight one. You can always tighten up later. Track for 30 days, then review and adjust based on real spending data.
Building the Checking Habit: Check your number daily for the first month. Set a phone reminder if needed. After a month, you'll naturally start checking before purchases. That's when the system becomes automatic and truly powerful.
The one number budget works because it removes decision fatigue while keeping you accountable. Your emergency fund grows automatically, bills get paid on time, and you still have freedom within your spending limit.
Conclusion
The one number budget works because it's stupidly simple. You calculate your fixed expenses, figure out what's left for spending, and track just that one amount. No spreadsheets with 47 categories. No guilt about spending $6 on coffee instead of $4 on groceries.
This method automatically handles the big stuff—your rent gets paid, your emergency fund grows, and you're not accidentally spending your electric bill money on shoes. The beauty is in what you don't have to think about anymore.
Your one number grows with you too. Get a raise? Recalculate. Move to a cheaper place? Your spending number goes up. It's flexible without being complicated.
Start this week by adding up your fixed costs and finding your magic number—you'll wonder why you ever tried to track every single purchase.
Questions? Answers.
Common questions about the one number budget method
Don't panic or abandon the system. First, figure out why you overspent - was it an unexpected expense, poor estimation, or impulse purchases? For the current month, either reduce spending for the remaining days or find ways to earn back the overage. Next month, adjust your calculation by accounting for what you learned or reduce your spending number by the overage amount to get back on track.
True emergencies should come from your emergency fund, not your monthly budget. For predictable irregular expenses (like annual insurance payments, car maintenance, or holiday gifts), calculate the yearly cost and divide by 12. Add this monthly amount to your fixed expenses so you're automatically setting money aside. This way, these expenses won't surprise your budget when they occur.
Absolutely! Use your lowest monthly income from the past year as your baseline for calculating fixed expenses and your one number. This creates a safety buffer during lean months. When you have higher income months, you can either save the extra money or enjoy additional discretionary spending, but your baseline budget remains stable and sustainable.
The simplest approach is often your bank's mobile app if you set up a separate checking account for discretionary spending. For dedicated budgeting apps, Monefy offers excellent simple expense tracking that aligns perfectly with the one number method. Other options include Mint or YNAB, but many people find their bank's app sufficient for tracking one simple number.
Groceries should typically be part of your one number since food spending can vary significantly month to month. However, if you have a very consistent grocery budget and prefer the predictability, you can treat a baseline grocery amount as a fixed expense and include any extra food spending (dining out, treats, etc.) in your one number. Choose the approach that feels most natural for your spending patterns.