Part 3: The 3 I's and Your Budget

In Part 3 of The 3 I's and Your Budget, we are talking about Income!

Income can be a hot topic! People often feel that they don't earn as much as they should. Some jobs can be a noble profession but don't pay a high income. Some jobs have a lot of income growth potential and some are "dead end" so to speak with little to no income growth. Regardless of what your income amount is, it is the driver of your budget. Even the king of budgeting, Dave Ramsey, says your income is your most powerful tool.

The idea when creating your budget is to allocate every dollar of income with intention! The amount of your income dictates how much you can spend in each category. There are guidelines for what percentage of your income you should spend in certain categories. But what happens when that suggested percentage creates a dollar amount that won't suffice? In Part 1 we focused on inflation with the high cost of groceries being an issue for most families. If you need to allocate more to a category then you have to decrease another category. This is where a lot of families are feeling the squeeze these days.

We hear people say "if only I had more income then my budget would work." More income isn't always the answer to making a budget work. There are plenty of people that can make a budget work even without a large income. These are people that truly follow the principle of living on less than they make, avoiding debt, and saving. These are the people that generally will just choose to save more or pay off debt quicker if their income increases; they don't change their spending habits. On the flip side, there are people making $250,000 a year that are living paycheck to paycheck because their spending is out of control. More income wouldn't make their budget work until they changed their spending habits.

If you are feeling a squeeze on your budget or less money going towards debt payoff or savings then more income may be a solution. Multiple streams of income can be ideal so that you aren't dependent on one source. Maybe a side hustle is right for you. Maybe doing a training or certification so that you can grow in your career is a good path. It's important to remember that not all jobs are meant to be in long term. You have to create the right path for you and your family; evolve, grow, and create situations for income growth.

Information contained in this post is for educational purposes only and is not considered financial advice.