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
386 thoughts on “Build the Foundation”
Income was higher than we expected. Currently all money is from our salary
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.
My income is exactly as I expected it was
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!
Income is a little higher than I thought it would be.
No surprises, I know what my income looks like.
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.
Not surprised. Income is what I earn
Income is exactly what I expected from my salary
It was a bit higher than I expected
It was pretty much what I expected.
I have just learned that I do a lot of spending in the moment without considering my budget first. It is eye opening.
Only have two sources so no big surprises. Retired on a fixed income.
I knew my income going in. I do need to pay more attention to my variable expenses.
Not surprised. Income is exactly my salary. I need to plan my budget
No surprises, good handle on income
Only have one source of income so the amount was expected
I’m on a fixed income so it mostly stays the same every month. Minus occasional cost of living increases.
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.
I have 1 income and that’s my paycheck.
Its much lower now that both my husband and I have retired
I was higher one one week and lower one week but the rest I was on point
My spending is higher. My income keeps rising but so does my spending.
My income fluctuates because of tips. Some months are better than others. But I will figure it out an average.
I did not have to do any estimation of my income as I have one steady income from my job.
My income was exact how I expected
No surprises, income is just my monthly salary
Not surprised my income is same every 2 weeks.
My income was higher, so I need to figure out why I am always broke.
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.
Income was slightly higher than I thought it would be. We are on one income but my husband got a raise.
My income varies as I am an independent contractor. On a few months I see more than expected, but it fluctuates pretty consistently.
My income was exactly what I expected with a few extras here and there in the past month from gifts.
I was higher on one week but on everything else I was on point.
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.
My income can vary quite a bit monthly depending on how many days I take off
I was pretty aware of my income so there is no surprise when reviewing my bank accounts.
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…
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.
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
I was not surprised. My income is from my job and there are no other sources of income.
My income is exactly what I thought.
With a steady income as well as a side income, I was surprised how much I make! Now, to use it wisely!
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.
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.
On salary so no surprise
No surprise, my income is basically the same every month.
It’s about what I expected.
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
My income is a little lower than expected. But I believe it’s an amount I can work with