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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300 thoughts on “Build the Foundation”

  1. 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.

    Reply
  2. 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.

    Reply
  3. 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.

    Reply
  4. 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 .

    Reply
  5. My income is higher than I realized. I bumped up contributions to my HSA this year and haven’t seen that impact yet.

    Reply
  6. 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.

    Reply
  7. 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.

    Reply
  8. 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…

    Reply
  9. 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.

    Reply
  10. 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.

    Reply
  11. 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.

    Reply
  12. 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

    Reply
  13. I got my income from salary, occasionally overtime work and holiday greeting money. A very tiny margin on selling unused second hand.

    Reply

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