Steve’s Almost Zero-Sum Budgeting

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Some friends and I discussed money management, both in general and how to handle it during the Dumb Apocalypse. I use a version of Zero-Sum budgeting they were interested in, so I wrote it up to share it.

You know me – most things I wrote up become blog posts. I’m no expert, so use my advice at your discretion, but I hope it helps.

The basic idea of Zero-Sum budgeting is that you assign purpose to your money – all of your money. In theory, your budget is so perfected you know what you need to save, when you spend it, and every dollar goes somewhere.

Now I’m not trying to make it perfect. I include leeways for error in my method, but the basic idea is something I’ve done for over twenty-five years in one form or another. I never heard of zero-sum budgeting – it’s just what I came up with, and later found it had a name.


First, let’s get to the goal – because the only purpose of using this method is to meet a goal. Simply, my idea is to manage my money so I’m aware of how much I have and use it properly, working towards living well and retiring happily.

Here’s the basic idea of my “Zeroish Sum Budgeting”:

  • Know what your expenses are.
  • Assign money to them, essentially setting it aside for appropriate times.
  • Make sure every dollar is assigned (even if it’s “here’s my rainy day fund”).
  • Have a buffer because you may screw it up.
  • Move your money around to reflect these plans.
  • Keep checking this budget and making sure it works.

OK, so how do you do this? Here’s what I do.


First, see where you are. That consists of:

  • Assess how much money you have. This should be liquid funds, not investments. I track investments separately, and that’s not my focus.
  • Evaluate your income by year.

Taking this step is simple, but needed – learning what you’ve got to work with.

Next up.


Core expenses are those things you do to live – food, rent, etc. This is not what you should spend, but what you’re spending now.

Figure out your annual expenses on things like:

  • Rent/home payment
  • Utilities
  • Food
  • Insurance
  • Medical care (on average)
  • Transportation (Gas, etc.)
  • Medical and Dental Care

By the way, notice the last one? That’s kind of iffy, right? Do your best to project what your average medical care will cost per year. Now that may be regular, or it may be something you save up for and tap occasionally. This is where you get into a big thing for Zero-Sum (or whatever I do) – projecting expenses.

How do you find this info? Well, your past expenses, credit card bills, and so on. oMake your best guess – because you’ll improve over time. Just do your best now!

Now that you’ve got these expenses, it’s time to apply my 10/20/30 rule. If you’re a bit unsure of an expense, add 10%. If you’re more unsure, add 20%. If you think you need 30%, then you need to rethink your estimates and try again.

You’ll also see how much money you have after these expenses (which helps you plan further or spend better).


Now you’ve got your basics. Not only is that helpful, but it’s also good practice – figuring out your annual expenses for everything else. This will be a challenge.

Some expenses are weekly, like food. Some are monthly, like rent. Some are yearly like insurance. Some stretch over the years, like saving for a car or a computer. Some are unpredictable, like clothing.

Here are some ideas:

  • Home electronics (Computers, phone)
  • Clothes
  • Housewares (blender, silverware)
  • Education
  • Car/car loan
  • Car repair
  • Licenses.

As noted, some of these are unpredictable or spread over time. What I usually do for these is figure out:

  • How much I spend within a timeframe (you purchase a new refrigerator once a decade).
  • Divide that up by how many years it takes.

But as we get here, some of this is unpredictable! Other things may be so far in the future (like a car) inflation may be a worry. This is where my 10-20-30 rule comes in as well.

Notice that we didn’t cover investment or having fun? I save those for later. So anyway, next up.


At this point, you know what you need to live, what you want to live with, and hopefully, have money left over. Now you figure out how much you can invest and how much I need “for fun.” These are the last numbers, and I hold them for last as they can be variable.

Think that’s it? No! Read on!


Now you can set up a spreadsheet with all these numbers, and see how your income is distributed over the year! And you can see if it works. And then you’re going to probably want to rethink it all again.

That’s part of this whole process – assessing and reassessing. Don’t worry, you’ll do this a lot, but over time you won’t do it as much.

Save this spreadsheet. You’ll turn it into a budgeting tool!


Now you have an idea of what you’ll be spending and saving over the years, so take that money you’ve saved and assign it to those categories you came up with. How much is in food? Rent? etc. Do your best with that, and stick that in savings.

An important note – I leave a buffer fund of about half a paycheck to half a month of money in checking.

Initially I didn’t keep everything in savings and spend from there – things like rent and food I kept in my checking account because it was predictable enough. But the Pandemic, which has altered a lot of my spending patterns, has made me see the virtue of tracking more tightly.


So here’s what I do to track my funds week by week.

First, I set up a spreadsheet that lets me see what I should allocate weekly to my expenses. This way I know how my money is supposed to be saved.

Then, every week, I allocate money, moving it to savings. As you can guess, that’s a lot of categories to keep track of, so I just set up a spreadsheet to update itself with a simple cut and paste. I see what’s currently allocated to each category, what I add each week, and what it should be – then take the latter and copy it to the allocation column.

Then, guess what? I move that money once a week! That way I see where it’s going! But . . .

I also see if I have anything wrong. Did I cross my buffer? Did I have more left than thought? Was there some surprise? Each week provides me more feedback!

Plus you get feedback when you spend money!


As noted I’d take money out weekly for things like food, but in general, what I did was put things on a credit card or write a check. To cover those, I’d use my spreadsheet to figure out how much money had to come out of savings and go into paying those things. That way, I see where my money is going every month or more.

By spending money you get feedback. Did I spend too much? Less? How is my savings going in categories that aren’t going to be touched for years?

I find that except for basic expenses (like food), its hard to track things every day, so I usually do weeks and months. If you can do daily great, but don’t drive yourself nuts.


Sometimes, like in the case of investment, you have to move money too. I won’t go into investment (I’m a max-out-the-401k/403b type guy into index funds otherwise). But that is something you set up as needed. For instance, in our current crisis and stock ups and downs, I held off on investing.


Finally, you should always, always learn and check your money. If something is suspicious, go over your numbers. If you need to rethink expenses, do so – prices change.

A personal example from recent events; I noticed some gaps in my spending – my cash flow had a weird anomaly of a few hundred dollars. That’s when I realized I hadn’t worked in changes to retirement – I became eligible for a matching plan and had more money taken out of my paycheck. Then forgot to update my spreadsheet.


Look, you can probably find some books and guides and articles. But this is what I do. Just me, some calculations, and a spreadsheet.

It won’t solve all your problems. It will help you track your money, so you have a chance to deal with those problems.

Steven Savage