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
401 thoughts on “Build the Foundation”
My only source of income is holiday money or chores like yard work.
My income was higher, because I do not nanny over the school year so I was expected what I saw
my income was higher, I thought about some random times I got money and I realized I got more than I thought.
Im happy how mine is going up though babysitting.
my source of income is though babysitting and holiday presents
My income was exactly the same as I thought it would be because I always get the same allowance each week, and don’t have a job outside of that.
My income is the same as I thought it would be.
I get money from allowance and babysitting my cousins, and it is about how much I expected.
high, because that is a lot of money
My income was higher, because I didn’t spend a lot of money this month
my income is higher than I thought but I’m not very good at managing my money so it can run out fast sometimes.
It was lower than I thought
My income was lower because I spend a lot of money each month
It was higher than I thought even though my only source of income right now is gift money and mowing lawns.
My income was lower, but that was expected because I haven’t been babysitting often.
It was around where I expected.
My only the income is gift money.
my income was higher because I take someone to school and I forgot to add it in until now
My sources of money are from holidays and chores
My only source of income is gifts and money that my parents give me, it was higher than I expected it to be.
My income was much larger than I expected
My income was higher than I expected
My income was the same because i have an allowance.
actually more than I thought. Hope I can figure out where it goes!
My income was higher, because i forgot about a time that i got money from my father.
I added my Social security and Supplemental Income together and I Know exactly what my income is monthly.
Our family’s income is lower than I thought.
My income is better than I thought but harder to realise with a partner who is self-employed and if he doesn’t work he gets no pay.
Income never changes the same every month just not enough
I am retired so I must tighten up to not run out of money and to have enough to meet my obligations. I have three income streams: Social Security, pension and a part-time job driving a school bus. I only get paid for the hours I work so no holiday pay or pay when schools are closed. So this income varies from month or month.
My husband and I are retired. We have5 income sources. 2 pensions, 2social security payments and minimal rent income from two sons living at home but gainfully employed.
For most of our marriage my husband has taken complete control of the money. But now, the responsibility has shifted to me.
I am learning on my own and want to be organized . I want to follow a budget .
I have 1 full time job. I knew pretty much what my income was.
My income was exactly what I expected. It’s usually the same monthly.
I know exactly what my income is from two sources.
My income was more than I thought due to cost of living increases.
My income is what I thought.
My income is higher than I realized. I bumped up contributions to my HSA this year and haven’t seen that impact yet.
My income is only disability from the VA ATM but when I begin school I will get the pell grant, a housing allowance from CH 31, and be able to start working a Work-study job with the VA. i plan to work 25 hours a week bringing 3 sources of nontaxable income.
my wife and I are salaried, so our income remains virtually the same each month.
This one is kind of up in the air. I am working full time hours at my part time job while waiting to start my Full Time job at the end of the month. Child support remains the same and I’m not including projected bonuses only guaranteed money.
I try to keep track of how much I should be earning each paycheck, so it wasn’t higher or lower than expected.
While i’m a bit lost of how much i spend… i am aware of my monthly income.
Our monthly income is pretty static, but it was minorly bigger than anticipated (new year COLA). It is our spending that we are working on reigning in…
I just started using Goodbudget, I noticed that I spent a lot without noticing it. like for example, i spent $40/month for gym (sounds cheap), then $30/month for wifi, and then cars etc. My salary is actually on a higher range for a fresh graduate, but my spending on little things surprisingly take up most of my income. Really hope by using this app I will be able to achieve my 2022 saving goal.
My monthly income is about $30 higher than I thought. I forgot that months have an average of 4.3 weeks and I was calculating based on a 4-week plan.
I under estimated based on last month, but our income fluctuates depending on sales, over time ect. I think I prefer to under estimate for those leaner months and put away any extra on those more robust months.
My income was lower. I depend on my payslip. No side hustle.
My income is exactly how I thought it would be.
I realize that my income fluctuates Edith every paychecks depending on my deductions and the hours I have worked extra . I am am becoming more mindful of my spending habits, my investing habits as well my saving habits . I am so grateful for this deep dive into my financial health
I got my income from salary, occasionally overtime work and holiday greeting money. A very tiny margin on selling unused second hand.