The One-Number Budget: Why Traditional Budgets Fail and What to Do About It

by John W. Crane

In theory, traditional budgeting is an ideal solution for household financial management. It buys you control, peace of mind, and a retirement you can depend on. Except when it doesn’t. When the numbers don’t add up at the end of the month, you can feel like you’re back at square one with nothing except shame and frustration to show for your effort.
It’s a problem that’s easy to ignore—until ignoring it becomes impossible. No matter where you are in the savings journey, there’s a way to simplify both your budget and your life to achieve your financial goals. In The One-Number Budget , retirement income planner John W. Crane reveals a new approach to budgeting that will forever impact how you look at retirement and financial management. He describes the current state of financial services, discusses the psychological aspect of spending, and explains why—and how—one number is all you need to help ensure that you’re meeting your goals. With professional insight and customizable exercises, The One-Number Budget is a philosophy you can grow with and a plan you can stick to for clarity and confidence in all the financial aspects of your life.

188 pages, Paperback

Published August 17, 2022

Reviews

[Emily · Rating 5 out of 5]

This is a great book that changed my mindset on budgeting and cash flow management.
One of the ideas in this book that changed my perspective was the concept of 'Human Life Value.' Human Life Value is the overall amount of money that a person makes in their lifetime.
The author argues that traditional budgets are usually a snapshot of the month, or a particular time period, and do not take into account the Human Life Value/overall cash flow of someone's lifetime.
The one-number is a calculation that looks at an individual's annual income and optimizes for a 20% savings rate. The one-number is the money that a person can spend how they would like, after taking into account the savings, taxes, and fixed lifestyle expenses (it's the only number the person needs to worry about managing). The author also goes into more detail about why 20% is a good target and how to build up to this percentage.
I think that the author's perspective on budgeting is as valuable a takeaway from this book as the formula for calculating the one-number. It was easy and enjoyable to read, and I think it will be helpful for many readers of any age.

[Taylor · Rating 3 out of 5]

This came sooooo close to what I wanted it to be. It started out discussing human life value and the need to spread resources over the course of our lives. It detailed why budgets don't work for many people and why saving/investing should be the top line item. All things I am on board with. I loved the concept of using a single number to monitor cash flow (that's why I picked the book up in the first place) but was disappointed by the lack of nuance in finding that one number. Using a rule of thumb of saving/investing 20% of income is deceptively simple. The author even gives an example where a client would need to save much more than that! I wanted a framework for a more individually fitting one-number.

[Linda Crane · Rating 5 out of 5]

I wasn’t expecting a book about budgeting to be interesting or enjoyable read, but John Crane managed to do that. I appreciate his lack of judgement, humor, and most of all, the very simple and immediately actionable concept that literally anyone could use, from teens to retirees. It’s an easy read over the course of a few evenings.

[Jerry Smith]

A quick refresher. Decent book and a quick read.

[Alexis Roizen Harris · Rating 5 out of 5]

I loved this book and have been using the methodologies for about 5 weeks now without fail!

1. He had me at the Moneyball opening.

2. It’s not another envelope system. For me they always fail because they’re so complicated. This book is about getting you to maximize your retirement savings first, then getting have One Number to know how much you can spend per month. No complicated systems of money allocated for different types of spending.

“Instead of worrying about every little receipt, you just have to make sure your total monthly spending falls within your One Number. That’s it. If you can do that, everything else automatically works, and your wealth building for retirement is taken care of.”

3. It was mind blowing to think that 1 of my income-earning years needs to pay for 2 years, 1 now and 1 in retirement. Absolutely never occurred to me before.

4. The book is short and actionable.

I made a couple enhancements to further simplify:

* I subtracted my fixed costs from my One Number so that I was only having to track my flexible spending

* I made my One Number a weekly number instead of a monthly number.

* I used an app to track my weekly spending. Instead of the usual line items (envelope system) of groceries, gas, eating out etc… I have one line item for each week. Then I track spending against my weekly one number.

The only thing that’s missing is the basic investing to actually grow the retirement savings. I filled in the gaps with another finance book. But this was gold for getting my savings mindset primed, my budget simple, and my tracking easy to do.

I cannot explain how simple this system is. I absolutely love it.