Welcome to part 1 of the Master Your Budget Series! We are going to dig deep into Income Sources and I will be breaking it down so you can get a solid number of where your monthly budget stems from to help ease your adulting woes.
Adulting is hard, and having to manage a budget on top of it is even harder.
The Master Your Budget Series will cover: Income Sources, Debt & Savings, and Bills/Expenses. This will give you a good idea of what money you have to count on taking care of your expenses, what your expenses are, ideas of how to manage debt, a plan you can set in place to start building up your savings, and curating a process for you to keep track of bills while also still having a life!
Want to learn how to meal plan for an entire month? Check out my tips here.
Side note: I am not a financial professional, and the information covered here holds no guarantees. This content is purely informational, and I highly recommend doing your own research on how to be safe with your personal finances. I am just a twenty-something trying to find her way in the world sharing what has worked for her and her fam 🙂
Now that’s out of the way, let’s get started…
Income
We are going to put your income into two main categories where it is easier to understand and organize…
#1: Fixed Income: Permanent/reoccurring income that you know you will have every month (i.e. paycheck)
#2: Fluid Income: Income that is not guaranteed and may change month-to-month or may only be received once (i.e. a bonus, side business, etc.)
You want to categorize your income into these two categories and come up with a solid number that you will bring in monthly…this is your budget. Start with what you know you will bring in, and that is what you will navigate from, anything else you bring in is extra.
Out of your budget, you will: pay your bills, put some money in savings, buy groceries, pay for gas, etc.
It is important to know what your budget is so you have a set amount of money to live off of…if you don’t keep track of it, or set aside chunks of money for a specific reason, you could find yourself in hot water.
Pay Day
Your pay day ritual is important. Pay day is a VERY exciting day, but if you don’t give it the respect it deserves you could also find yourself eating Raman and checking the couch for pennies to pay bills the rest of the month. Some months be like that sometimes, and believe me we have had our fair share of close calls, but by coming up with a strategy to manage our money we have saved ourselves a lot of heartache and stress.
Right now, I want you to think about your pay day ritual…
Are you proud of how you handle that big day? Or are you ready for a change?
Whatever your answer is, keep scrolling because there is more to check out!
Auto-Pay
Now that you have assessed your pay day situation, It’s time to check auto-pay! By setting your bills on auto-pay you won’t forget to pay them! Setting your rent/house payment, phone bill, utilities, etc. to pay themself makes sure that you never have to worry about them staying on/functioning, but also so you don’t have late payments.
Make sure that you write down the days that your bills with be automatically paid that way you can double-check you have the funds to cover them! Sometimes you can’t pick the auto-pay date, but if you can, strategically put them after pay day so you don’t have to worry about them.
Check with your providers to see if they have an auto-pay function for your payments!
Credit Cards
Oh gosh, the big CC.
With this type of freedom, comes great responsibility.
I’m just gonna say it so it’s out there…
Don’t purchase anything on a credit card unless you can pay it off fully when the bill arrives.
This is easy to say, but it’s really hard to implement. But unless you follow that thinking and STICK to it, you won’t escape the never-ending cycle of debt until you take hold of your credit cards and make a plan.
For our family, we have 1 credit card account that we use for gas, groceries, and date nights. That’s it. Other purchases come out of our checking account (it’s a strategy so we have to see it come out) and if its not something we need right then, we wait. At the end of the month we pay the balance of the credit card and start over. This way, we are able to save a little bit each month with covering those expenses with the credit card first, and we are also managing the extra that we spend on our other accounts.
There are extenuating circumstances where you might have to use your credit card for an emergency, and you might go over what you can pay back…it happens, its not wrong, and you aren’t a bad person if this occurs. But the moment it happens, you need to sit down and come up with a plan to pay back that money in a timely manner.
Living debt free is the way to go, so if you are able to cut up your credit cards and live without them, DO IT! If you aren’t, work towards being able to so you don’t get in the cycle of relying on them.
Want to learn how to meal plan for an entire month? Check out my hacks here.
Budget Breakdown
Now, it’s time to dig deep into your budget. I want you to gather all of your bills, account balances, and tally up whatever debt you have, and I want you to make a physical list that you can put somewhere to remind you…
Here is an example worksheet that you can download and print, or use as a guide to make your own!
Before we can move on to the next part, fill out your worksheet and analyze it. Check your income. See what bills you have on autopay. Write down what day payday is. Check your credit cards. Look at your debt.
Then, I want you to set a few financial goals for yourself…
Maybe you want to buy a house or live on your own, maybe you want to save $10,000 this year, or maybe you just want some extra money so you can do things you enjoy. Write it down on your list and keep it in a place where you can see it everyday.
Work towards it.
Push yourself to make those goals.
Make a plan to meet your goals and CRUSH IT!
Steward your money well, friend.
Check out my YouTube video that covers income sources in more detail and sets you up for part 2!
