Before we even think about a budget, we need to know how much money is coming in.
Besides, it’s much more satisfying to think about what we’re making than what we’re spending.
For the typical established employee, you get a paycheck every two weeks OR twice a month, which sounds like the same thing, but isn’t.
I get paid twice a month – on the 15th and the 30th. And then get occasional bonuses depending on my performance, extra work done, etc. But I always know I will see a paycheck a day or two before the 1st and another right around the middle of the month.
My husband on the other hand, get’s paid every two weeks, which means over the course of a year, there are 26 paychecks. Most months, he gets two – and then two months a year there’s an extra one. Which feels like bonus money. But these move around, some months they are at the beginning and the middle, some months they are middle-ish and end. And those extra months, they are the 1st, the 15th, AND the 29th. (Those are good months for the budget.)
But both of us have pretty predictable income per month, with occasional ‘extra’.
But, I am thinking about this money thing in terms of ‘new adults’ in the world. You might be students (high school or college) with a part time job with really sporadic income. You might do gig-work with money equal to how much time you spent working. You might have any number of part time jobs that you cobble together while you figure it all out. And all of that is ok, it’s just going to make it harder to figure out what your income is.
But you have to know what you make to figure out if you’re spending more than you’re making. (Remember rule #1 – spend less than you make)
So what’s your next money task? Find the records you need to figure out what you’ve made for the last three months (6 would be even better, if you can do it). That might be pay stubs, your online pay portal (if you have one) or just going in to your bank account and seeing what was deposited over the last three months from your job. And be able to answer these three questions:
- How much did I make each month after taxes and all deductions? (How much actually was deposited into my bank account?)
- Is it a consistent amount or does it vary?
- What is the minimum I can be guaranteed to make each month?
This will give you a baseline for where to start managing your money.
Right now, don’t worry about the rest of the details, we’re just answering basic questions to be able to put all this in order. Money is always tied up with all sorts of emotions – and we just want facts right now. We can work on the emotions later.