1Step 1 of building a budget, whether is business or personal, is determining what you make. Sounds easy, right? It is. (Find other steps here .)
First, let’s look at the personal side of the question. How often do you get paid? Weekly, Bi-Weekly, Monthly, never? Whatever it is, take the amount and multiply it by the # of times you get paid. For example, if you were paid $500 and you get paid weekly, multiply 500 x 52… This is your annual pay. Annual pay isn’t super helpful when you’re building a budget.
What if you want a monthly budget – multiply by 4, here’s why:
You’ll actually be getting paid 4.3 times per month if you’re paid weekly. (52/12 = 4.3). But in reality, you’ll be paid 4 times 8 months out of the year and 5 times 4 months out of the year. When you’re doing a monthly budget you should assume the low end so you’re not struggling to make ends meet 67% of the year. Take that 0.3 and pay down debt; or, you can put it into savings, IRA, 401k, or some other investment. Or, be dumb and take that extra $500 and buy a new Playstation4 – as long as you’re being smart in your budgeting, you’ll have an opportunity 4 times a year to do something dumb and not even notice it in your finances.
“Being dumb in your finances is only bad if you can’t afford it.”
It doesn’t matter if you decide to do something dumb with that $500 or something smart. What matters is that you don’t over-estimate your monthly income. If you do that, you’ll be hurting when the bills come due.
Now you know what you make. Next questions to ask yourself are:
Can you make more money? How?
Do you want to make more money? Is it worth the time & effort?
Unless you are very dumb, you’ve heard/read the expression “time is money.” Can you make more money in your current job by volunteering for overtime? Can you make more money by taking on an additional part-time job? Can you make more money by selling drugs? Can you make more money by starting a business? For most of us, the answers to these questions are ‘YES’, but they all require time.
1. Working Overtime requires you to be at work longer, and spend less time with your family/videogames/Coors Light.
2. Taking on a part-time job is probably worse than overtime. You’ll have to work more hours to make less money per hour (usually – I doubt there are many part-time jobs that pay better than time-and-a-half from your primary job; if you find one maybe you should consider switching careers).
3. Selling Drugs pays very well, but the time commitment required for getting caught is probably not worth the risk for most.
4. Starting a business has the best chance of making a lot of money, but it also requires a lot of time.
So – can you make more money? Sure. Do you want to? That’s up to you. If you decide to try to make more money there are lots of sites devoted to side income:
Or if you just want to make a little extra cash here and there:
Check them out and send me some other ideas for places to discover side jobs.