$17 in checking and zero-based budget

How low does your checking account have to get before you squirm?


In the winter of 2009, things were desperate. Just divorced, house for sale at the bottom of the market, new city, new job.

But I had money in the bank:


My bills were paid. I was out of debt any my 2 doggies and I were housed and fed.

I was too proud to ask for help and knew that I could hang on until the next pay day.

And I had just begun to follow 2 of Dave Ramsey’s guidelines:
No more than the following of take-home pay:

Month after month I kept at it. Paying off bills, having faith, living below my means.

Years later, I would learn about Financial Peace University, the Total Money Makeover book and cashflow from Mr. Ramsey.

The days of $17 and little more in the bank haunted me for a long time. And once I saw $100 or more in there, I liked having a cushion of money to feel secure. The cushion grew a bit and I wasn’t sure how to best use it for the future.

What does he mean by “cashflow” and a “zero-based budget?” It simply means that your money should “0 out” each month.
What?! Keep $0 in the bank?

No. Keep a little cushion in there that comforts you.
Maybe it’s $50, $100 or more.
At the beginning of the month, each dollar has an assignment: “sir, yes sir!, I shall pay the mortgage!”
“M’am, yes, m’am, I will buy groceries!” And so on.

And any remaining money? It has an assignment too: it goes into your sinking funds-those things you want to save for: a new sofa, a down payment, paying off the mortgage.

How on earth was I going to do this in the Budget in Excel? Ramsey has paper forms to use on his site. That’s great if using paper and pencil helps you-in fact he encourages this tactile exercise to feel the budget and see it on paper.

I’m a spreadsheet nerd. So, I made space at the top of our family budget to go to “0” each month.

Like this example:
Cashflow: $0

Post tax pay: $3000

Total actual expenses:

Sinking fund:$200
(Pay-actual expenses)

Ding! See how the leftover $ starts to fund the sinking fund?

Conceptually, I always thought I understood this but until I saw it on my spreadsheet, I could not have any idea how much we could expect to put into a sinking fund.

The leftover money was not employed. Flopping about in the basement and playing video games into its 30’s.

Now it has a job and its title is “sinking fund team lead”. When we get good at this, it may become “night manager”.

After I figure out how to create a calculator online, I will share a template.

For now, you could just use the free cashflow forms from Dave Ramsey: once you see it on paper, it’s life-changing:



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s