March 8th, 2025

What is the simplest budgeting system? How about a "one-number" budget. A single number that helps you feel confident about your spending.

So, what is that number? It’s the amount you can freely spend each day for a year while still covering all your fixed expenses. Here’s how to calculate it for yourself.

1. Income

Start with the total income you plan to make during a year.

2. Fixed Expenses

Make a list of all your fixed expenses for the year—things like rent, insurance, and subscriptions.

Note: fixed expenses are typically charged automatically on a set schedule, running in the background of your life. Even if you never used your credit card for a year, these charges would still occur.

Total them up for the year.

3. Subtract

Subtract your fixed expenses total from your income total to find out what's left for everything else. This is the money that you have discretionary control over.

4. Divide

Divide that number by 365 and BOOM–you have your "one-number" budget.

To put it another way, if you spent exactly this amount every day, you could still cover all your fixed expenses. Of course, on some days you’ll spend more or less, but simply knowing this number brings a peaceful confidence to your financial life.

Know Your Number

If you want to quickly calculate this number for yourself, try Tend. Enter your income sources and fixed expenses as if you were setting up a repeating event on a calendar. Tend then calculates your annual income, your fixed expense percentage, and your daily allowance for discretionary spending.

Keep it simple.