When using a zero-based budget, how do I account for money already in my bank account?
We are transitioning to a zero-based budget. My question is, how do we account for the money we currently have in our bank account? We haven't been a super-strict budget and I think this "pad money" has been saving our bacon the past few months.
Whatever is "left-over" will be going towards building our savings as we are starting to save for a three-month emergency fund.
EDIT: I was asking the wrong question before. I honestly don't know why I said savings. That part we have a handle on. I'm talking more about the money we have already in our bank (checking) account. How do we account for that money?
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You don't. My budget for the year takes my gross income and nets out tax, spending, etc to account for every dollar.
My assets (and the target of the savings during the year) are a balance sheet item. The sum already there isn't part of each year's budget.
Household budgeting is about giving a job to your money before you spend it. Having it zero-sum means that you've assigned all your money coming in to whatever tasks you've decided align with your financial priorities.
That means that if you start with money in the bank, then that money needs to be assigned jobs as well - it's likely that if it's savings, then its job will be to wait around until needed for things like car repair, home repair, vacation, etc.
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