Build the Foundation

Week 1 | Day 2 | GB 101: Budget Bootcamp

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Creating a budget is like building a house. There are lots of steps, and the most important one is laying a solid foundation. If the foundation isn’t strong, the house built on top won’t be sturdy either. But when a foundation is strong, the house on top will be sturdy too. It won’t crumble after a few years, and will hold firm when the weather gets rough.

We want our budgets to have a solid foundation like this — one that allows us to weather the storm and change with the seasons.

The foundation of a budget has several pieces, the most important of which is estimating income and spending. When we can do that well, we can learn to adapt our budgets throughout our lifetimes, so that our budget continues to serve us well for years. After all, budgets are never final!

But what’s surprising is that many people are never taught the fundamentals of creating a budget. Our friend Lisa said,

“I never saw a budget that my parents used, so [making a budget] was new to me. They might have had one, I just didn’t know about it.”

So that’s what we’ll focus on this week! We’ll start the budget making process by creating a sturdy foundation that you can build the rest of your budget on. The first step is knowing how much income you have to work with.

Today’s Assignment

  1. Estimate your income. If you’re not using the Goodbudget app yet, or are just getting started, head to your online bank account and tally up all of your incomes from the last month. Be sure to include things like paychecks, side hustles, child support, pensions, etc. If you’ve been using Goodbudget, you can get an exact figure by looking at your Income vs. Spending report.
  2. What did you notice when you estimated your income? Was it higher or lower than you thought? Share your experience in the comments below.

Note for couples: Remember to count all the money that you share. That might come from monthly paychecks from each of you, plus money from one of your side hustles. And if you don’t have the same, clear understanding of which incomes you’re sharing, now’s a great time to get on the same page.

That’s it for today! We look forward to seeing you in the next assignment.

Happy budgeting,
-The Goodbudget Team

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37 thoughts on “Build the Foundation”

  1. My guess as to my monthly income was pretty close to spot-on with what it actually has been. But I’ve been using Goodbudget and checking my Income v Spending Report for awhile now, so I probably subconsciously just remembered what I’d seen before…

    • I have just moved back from living/working overseas. I have been using the money i worked so hard for 6 months and now that I have no income we have almost depleted the entire account in just 2 months . I’m excited to see how this course will help change our budgeting !!

    • As I thought need a visual to not waste money frivolously. When I budget in the past I have noticed I do not incur debt.

  2. Our incomes are the same other than my husband’s part-time income may include bonuses or be lower than we expect. I have a spreadsheet that I’ve averaged what he’s received so we err on the lower side with his pay. Anything above that is a win.

  3. We have a set income..so no surprises. Funny thing, before GB I had never actually totaled our sources of income. The only thing I’m not sure about is that each month we take a set amount of money from our retirement account. Part of that money we live on, and a percentage we leave with our retirement brokerage for them to pay federal taxes for us. so should what should I record as the income? All of it or just the part we actually can spend?

  4. My husband and I are on a fixed income so we surely know how much it is. We have used Goodbudget long ago and we got so disciplined that we stopped using it. Now we have lost the track again and we need to start over, specially because we have to adopt and engage with a new habit of saving money.

  5. As I’m working with my wife for the first time in joint budgeting and dealing with the finances she will see our joint income for the first time! Help!

  6. My income is what I expected because I’ve been budgeting for a while. My husband’s income fluctuates a lot because of his side hustle, so that will be a new adjustment as we move forward with creating budgets.

  7. My income was exactly where I thought it was because I have already slightly been budgeting I just can’t seem to keep to it.

  8. I calculated my estimated net income with the calculator on smartasset.com to see what the expected tax deductions will be. Better than I’ve ever made, gross looks great, net not as much!

  9. Definitely high spending which I expected. Since my husband is paid by a commission I can only count on my bi-weekly income for budgeting purposes, this may be my biggest challenge in planning a budget.

  10. I get paid monthly the same rate of pay except for every 3 months I receive commission on top of that base and I need to budget that commission as I currently see it as spending money but it’s really just part of my annual salary.

  11. I have only one source of income and it is consistent, but I could probably bring in more with a side hustle. At this point though, I want to better manage what I have first.

  12. I knew what my income was since I have only one and it is fairly consistent. I could probably improve on it with a side hustle or going back to school. Until then, I need to learn how to use what I have more wisely.

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