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?

  • Do you mean zero-sum budgeting? Zero-based budgeting is generally for government entities who assume that the budget approved for the current year is essentially approved for upcoming year and all that needs to be justified is changes from the current budget. Jun 25, 2012 at 19:01
  • Sure. I've heard it called zero-based; but yes, Income - outgo = 0 is what we're looking to do. #BalancedBugdet
    – Waddler
    Jun 25, 2012 at 19:25
  • In that case, see this answer to a recent question about how to account for savings when doing budgeting. Best of luck in your endeavors. Jun 25, 2012 at 19:32
  • Like JoeTaxpayer points out, a budget deals with cash flow, whereas assets are dealt with on a balance sheet. They are related, but serve different purposes.
    – user
    Jun 26, 2012 at 12:04

2 Answers 2


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.

  • I have that part down about giving a job to the money before I spend it. It's not savings. It's just left over money that's become "padding" so to speak. What I want are some ideas on how to use/account for that money when transitioning to a zero-sum/balanced budget. Do I put it as "income" and go from there?
    – Waddler
    Jun 26, 2012 at 22:41
  • Right - since you're doing a balanced budget, you'll want to budget all dollars on hand, including money in the bank. A useful category might be to have that money set aside as an emergency fund for things you forgot to budget for or periodic expenses that you don't have enough time to save up for (e.g. $1200 in property taxes would mean budgeting $100/month, but in your first year that would be higher since you wouldn't have all 12 months). Jun 27, 2012 at 0:40

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