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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372 thoughts on “Build the Foundation”

  1. I prefer the YNAB teaching that I only budget what I have and not predict, I will continue using that philosophy as I set up my budget.

    Reply
  2. My only income is my job, so I know exactly how much I have to work with. Last month’s income is irrelevant, as I just got a promotion with a hefty raise!

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  3. I made slightly more in my income. But I still spend a lot more each month so I definitely need to plan out my monthly budget.

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  4. I have just learned that I do a lot of spending in the moment without considering my budget first. It is eye opening.

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  5. I have two incomes 1 fixed which stays the same and one that can fluctuate at times, depending on if I work the same hours or not. Either way most of the time I over spend, so I need a budget definitely.

    Reply
  6. My income will be higher this month because I am going to pick up a couple of shifts at my part-time job. I’m excited to have extra to clear out some of the debt and not rely so heavily on credit cards since one of my main goals is to focus on paying credit down/off.

    Reply
  7. My income varies as I am an independent contractor. On a few months I see more than expected, but it fluctuates pretty consistently.

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  8. I’m an independent contractor and in the process of adding a new income stream, so this is not really possible for me to do at the moment. Will work with what I have in the bank for now.

    Reply
  9. Income is higher than expected, because I mainly focus of “now” ins and outs. Because I believe I see the outs as bigger than the ins, plus the fact that there little left over after a paycheck, I’ve create a very narrow view of my income. Also, I find the extra steps before entering my actual income in the app slightly intimidating…

    Reply
  10. Our income comes from 2 sources at separate times during the month so this was a useful exercise in working out a clear picture of our money. There were no surprises but good to confirm what I knew.

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  11. Mine was more than expected and I didn’t include my bonus I received in December. With that I made a lot more this month and yet I’m broke. I really need to create and keep a budget

    Reply
  12. I am a contractor so my income varies from month to month so we picked a lower amount that we felt comfortable with that would meet all of our needs. What to do with the extra is another discussion.

    Reply
  13. My income is higher than i expected. I do gig work though so it does change month to month but i also have a guaranteed monthly income also which covers most of my larger bills.

    Reply
  14. It’s amazing to look back and see the amount of income I had last year, compared to what I thought I had. It was more than I expected

    Reply

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