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Day 3 - Your Income

Day 3 - Your Income

Hi hello it me – and it’s day 3. Welcome back, budget bosses.

So yesterday we established how much you need to pay in bills/subscriptions each month to cover yourself for the entire year. We’re well on our way to savvy financial management.

Today’s task is a short one. A bit like when your teacher was off sick and you had a half-baked relief teacher in and you knew you were in for 55 minutes of dossing.

You’ve looked at your expenses – now it’s time to look at your income. Some might say this is the fun part, but that entirely depends on your salary and how you feel about it.

You will need:

  • Payslips/invoices

  • Calculator

  • Budget bible and pen


This will be much easier if you’re employed on a set salary and can go by payslips, but don’t worry. All you casual workers/self-employed folks/commission-based earners, I got ya.

I want you to work out how much money comes in each pay cycle. Whether that’s weekly, fortnightly or monthly. Include any income from regular ‘side hustles’ or second jobs, too, but only if it’s regular and you can rely on it.

If you work irregular hours, are commission-based or are self-employed, here comes a sub-task for you.

Write down all your income from the past 6 months, and divide that by 6 months or 13 fortnights or 26 weeks – whatever you used in your bills equation yesterday.

Now you’ve got an average of your income.

Next, take your bills amount from yesterday, and work out what percentage of your income that figure is.

If you’re struggling to throw it all the way back to high school maths, this is how you work out the percentage:

Let’s say your monthly bills total was 1400, and your average (or actual) monthly income was 3600.

Divide 1400 by 3600 and multiply the answer by 100.

In this case, it’s 38.8%.

So your bills, including rent/mortgage, would be 38.8% of your total income.

Note: you really want to keep this figure below 40%. Remember this must include your rent/mortgage and utilities, too. If this is above 40%, you might want to look into cutting back on some subscriptions, or switching providers for TV/Internet/Insurance to reduce it.

We’ll leave it there for today. Tomorrow we’ll pick up from here and look into what we do with the remaining 61.2%.

Over and out.

Day 2 - Fixed Costs

Day 2 - Fixed Costs

Day 4 - Minimum Cost of Existing

Day 4 - Minimum Cost of Existing