And when he brings out his own sheep, he goes before them; and the sheep follow him, for they know his voice. –John 10:4
I tried to get out of this post. A little accident left me feeling…well, crabby. My assistant was out of town and I was puppy sitting and I wanted to work on my novel and… I had to remind myself why I started this blog. Actually, I didn’t remind myself so much as God did. If you’re a Christian, you know what I mean by hearing His voice.
My original goal for the blog was inspired by my grandchildren. I wanted to leave them with all the practical advice related to money management I’d gleamed over a lifetime, things I wish I’d known when I got out on my own. Things they’ll need to know in a few years. I began this blog because I felt compelled by that Voice to share this knowledge, not only with my grandchildren, but with all who want to use their money more wisely.
And when I started making excuses to skip this week, the Voice reminded me of my goals
Salary and Wages
If you work for someone the bulk of your income will likely come weekly, bi-weekly, or monthly in a set amount. This makes it easy, but we should account for gross income, not take home. Why? Those withholding amounts are expenses that should be accounted for in the budget even if we don’t have control of them, like taxes. If we don’t include withholding in the budget, we’re not accounting for our money down to the last cent. And we do have control of some items. They should be reviewed periodically to determine if too much or too little is taken out.
Some employees are paid in commissions or tips. Some, like construction workers, may have to deal with fluctuations in working hours. In these cases, it’s essential to tabulate a “normal” monthly gross income for the purpose of budgeting. If you don’t, you may come to depend on those higher amounts. This will spell trouble during a dry spell. Adjustments may, and should, be made quarterly or semi-annually. This is a common-sense consideration, but unless you put it down in black and white, you won’t know where you stand. Living from paycheck to paycheck isn’t wise for anyone, but especially for those who depend on variable income.
Bonuses and Windfalls
What are we to do with compensation over and above salary and wages? Just as we should be prepared for emergencies, we should also have a game plan for unexpected gain. Prioritize. I recommend this order. (1) Pay off debts (2) Put it in your emergency fund, if that fund isn’t sufficient. (3) Invest (4) Buy your heart’s desire. Another good use is to give it away, and if the amount you give to charity doesn’t measure up to what the Voice says, you should.
What if Income Falls Short?
Obviously, if you work for someone else, and you’re not making enough to make ends meet, your choices are limited. You could ask for a raise or a promotion. If you have a good reason and your performance is good, do ask. Sometimes we don’t have because we don’t ask. And if the answer is no, ask again after a reasonable length of time and better performance. Ask those who’ve achieved success in your company. My guess is, they had to prove themselves to advance.
If you fail to get a raise or promotion, you can always get another job—just don’t walk away until a better job is secured. Many people have to take a second job. We all do what we have to do.
If you’re self-employed, the whole picture changes, and gets more complicated. You have a lot more financial documents to consider than a simple budget. But the opportunities are much greater. Far greater than this post can cover, so next week we’ll look at those opportunities.