The Easiest Way to Budget--The One Number Budgeting Method

The One Number Budget is arguably the easiest way to budget. You start with your take-home pay. From that number you subtract your monthly fixed expenses, your periodic expenses and any savings goals. What's left is the one number to help you manage your budget.

In this video I'll walk through how it works, a strategy to help you implement it, and 3 budgeting tools you can use to help you with the one number budget.

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The Dough Roller Money Podcast is a finance podcast for easy-to-understand advice on managing your money. How to make it, give it, save it, spend it, and invest it in a way that puts you in control of your money and makes it work for you. This fun, relatable and honest podcast shoots straight and helps people understand the big picture as well as the nuances of owning your finances. From retirement planning, best practices for saving, paying off debt, smart investing and so much more. You don’t have to be a financial expert to listen, but you can become one!

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

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[seriousfaith]

I've been using this budget method for years...no idea it even had a name!

[bryanseverino]

You hit the one thing I forgot before retiring; gifts, birthdays, graduations, Christmas. Had to make some adjustments to my budget to accommodate. Thanks for

[Mike-]

Which Rob Berger are you dealing with?
Just check the shirt!

[alanalbin]

People who are having difficulty budgeting should NOT use services such as Mint. They should get a yellow legal pad and a pen or pencil and actually write everything down. Their minds need to be fully engaged with the numbers, not using apps as a crutch for this stuff. Rent/mortgage/property tax/homeowner's insurance or renter's insurance/utilities is the monthly "nut" for the living space. (Does not include major repairs or home improvements). On average that will be a fixed monthly number for each year until there is a change, like a rent increase, but it's simple to increase that line item in the budget. Cable/internet and cell phone will be fixed on average. Third item is health care. Also fixed on average unless a major change occurs, at which point, you take out your legal pad and pen or pencil and make the adjustment. Auto expense: repairs and maintenance, insurance, gasoline. Also fixed, on average. (Does not include cost for replacing the vehicle). Groceries and non-consumable household items typically purchased at grocery store. Again--it's simple enough to average this number out by looking at one's purchase records for the past several months (easiest is to put this stuff on credit card and pay it off monthly). INCOME TAXES--federal, state and local where applicable. You HAVE to include payment of taxes as part of your monthly "nut" because the taxman will always get his share. Paying taxes is not optional. If the taxes are being withheld from the paycheck, makes no difference--you still have to pay them, and people having budgetary problems need to UNDERSTAND income taxes since there are ways of reducing them. (This doesn't apply to FICA even though FICA has to be paid out of gross income too.) Health care: Monthly insurance premiums, copays, deductibles etc. This MUST be paid too. Any other debt service (credit cards, student loans, and so forth) that you are legally obligated to pay must also be included.

Going out to restaurants is not part of the monthly "nut" because it is simply optional and not necessary. Entertainment is optional and not necessary (you said "subscriptions", I assume you meant for entertainment purposes). They are NOT part of your initial budgeting process. The budgeting process MUST begin with an identification of essential/legally obligated expenses. While the "groceries etc." category seems like it should be very flexible, in reality, it's not--at least not the way most people actually live their day to day lives. Gifting should be assigned the number "zero" because by definition gifts are completely non-essential and non-obligatory (at least financially speaking).

Then there is the final category, savings and investments. You find out what your monthly essential "nut" is (see above) and you know how much if any is left over to spend on savings and investments, and then you can make decisions about what is really important to you. The only other issues would be periodic but unpredictable large expenses such as replacing an automobile or major home repairs or improvements. That's a little bit more complicated to account for and to budget and plan for, especially for people who really need your video, or something like Mint, and have no clue about what they are spending or why they are spending it. I repeat it is an exceptionally misguided idea to advise your viewers to use apps to do the budgeting work for them because psychologically it won't penetrate nearly as well as actually pencilling out the numbers and working through them...over and over and over, if necessary, until comprehension starts.