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
- 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.
- 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
377 thoughts on “Build the Foundation”
My income is what I expected I can’t work as much during football season so it is not very much.
I spent to much this month payi
ng off some dr. Bills.
Iris
Income higher than expected. Led to questions of ‘what am I spending so much money on’
Same here
Story of my life! LOL Since I want to be saving, investing, and donating more this is a good time for me to evaluate what I’m wasting money on.
Income was higher than what I thought.
Mine was as expected
Income at least for the last month was lower then expected but I realize I can’t miss work if I want my check to be better
Our income was about what we thought it would be.
Our income is where and is as much as we thought it would be
Our income was a bit more than I thought
My income was more than expected, I plan on continuing to pay ahead on my bills that way I plan on adding a little more to my savings for emergencies and still have spending money, that way I’m not over extending myself on my budget.
My income was as expected. What I notice is that I have one source of income and that is something I need to work on. I will start developing a plan to have more sources of income as a way of building a better and more steady financial life.
Found out I spend more than I make, hopefully taking this course will help me get back on track
My income was exactly what I thought it would be. It does not fluctuate.
It’s okay. I am happy we have it considering what is happening around us.
As expected. I’m on a fixed income.
My income was as I thought it would be. But because I did all the Christmas and birthday shopping this month, my spending was also considerable. But I managed to stay in the green, plus my December budget won’t be for presents shopping.
My income is fairly consistent…I clearly need to work on my spending habits since it practically disappears within a week.
Right as expected & will increase next month.
I guess I don’t make that much when it comes to salary, especially with pre and post tax deductions. My income is exactly what I thought it would be.
I am just doing average. It doesnt fluctuate too much.
My income was more than I expected it to be.
Income is as expected
Income is as expected
Pretty much what I expected.
Our income was what I expected, but to see all the transactions was crazy. Definitely over spending.
I was surprised that my take home was so much less than my gross income. My partner was surprise to learn their take home was higher than anticipated.
My income was what I expected. I have a fixed income
My income is lower then I thought
Mine is lower then i thought
A little bit more than I expected.
Thanks for sharing! I’m sure it’s a nice surprise to find out you’re bringing in more than you expected. That gives you more wiggle room to focus your cash on what’s important.
I notice is lower than I thought
My income was as expected, but wow – I need to dial down the spending.
Expenses are higher than my income
Same here
Income was what I expected but fluctuates depending on shift work and holidays. So that’s what’s been difficult in estimating.
Income is as expected. It’s tough to be exact since my partner pays half of the variable expenses to me, so that part of income is based on expenses which change monthly.
Lower than i thought. Wondering how Im doing this if thats the case honestly
My income was slightly lower than I thought- taxes lol.
lower than expected
Income higher than expected, curious how I spend so much money
My income is less but with school and work we have to find a happy medium! But I’m hoping to learn some tips
Income is what I expected.
Income is what I expected.
Income is what I expected
I noticed that I don’t pay that many expenses so I do have a higher income.
I dont have an income
Income is what I expected. I will be receiving my raise in the next paycheck though, so I will account for that going forward.
mine was as expected
My income is larger that expected.
income is what I expected.
I dont have an income
I do not have an income.