The idea
Income – Outgo = Zero (on purpose). Every dollar goes to a category: bills, goals, and fun.
Steps
- List net income for the month.
- Create categories (needs, wants, savings).
- Assign dollars until the unassigned balance = 0.
- Spend from categories; move money as needed.
- Reconcile weekly; reset next month.
Envelopes & sinking funds
- Digital or physical envelopes for groceries, fuel, dining, etc.
- Add sinking funds: car maintenance, gifts, travel.
Handling mid‑month surprises
- Move $$ from lower‑priority wants.
- Keep a small "miscellaneous" envelope.
Frequently Asked Questions
Isn't this rigid?
It's flexible—move money, keep the plan.
What about annual bills?
Fund monthly as sinking funds.
Do rollovers expire?
Choose: monthly reset or allow rollovers.