Details

1. Add Essential Expenses: Go to your Cashflow Goals dashboard (available to logged in users) and use a calculator to add up all expenses that are truly “Essential” (see below for guidance). Don’t forget to include some portion of “Essential” expenses that occur less than once a month.
2. Add Net Income: Next, add up all your net income. “Net income” is the money you actually receive after taxes and other deductions are taken out. Just like with expenses, you may want to include some portion of income that you receive less frequently than monthly.
3. Review the Difference: If your Essential Expenses is greater than your total “Net Income”,  you’ll need to find ways to increase your income or reduce your expenses by at least the difference of these two numbers.

Now, let’s take a closer look at what to include in “Essential Expenses” and “Income.”

Typical Essential Expenses

• Housing – typically rent or mortgage
• Food – just the essentials. Ideally this is a bit more than rice, beans, and ramen but it certainly shouldn’t include fancy cocktails or expensive meals on the town if those could be supplemented with lower-cost options or forgone entirely.
• Utilities – at a minimum this will include electricity, heating, water but you may also want to include a cell phone bill and internet service.
• Transportation – gasoline, public transit costs (including monthly passes) and insurance (if you drive your own vehicle).
• Debt – including the minimum amount due to all loans and credit cards. Note: The minimum amount due on a credit card is typically a percentage of the total balance and can therefore fluctuate. If you have outstanding credit card debt consider transferring this to a single card and having a different card that you pay off in full every month. Then, only include the outstanding credit card debt payment in your “Essential Debt Expenses” (all other essential expenses  – regardless of how they are charged and paid for – should fall into one of the previously mentioned categories).
• Childcare – If you have a child, and you need childcare to be able to do your job and earn income, this is an essential expense.
• Savings* – includes any money you take from your income and dedicate to saving. While not truly “essential”, and also not typically thought of as an “expense”, by including this as an essential expense, it can help you to build an emergency fund.

Net Income Sources

• Job Income – often comes in the form of a paycheck that – depending on your job and the consistency of hours – may be of a fairly regular amount.
• Tips – depending on your job this could be a significant and fairly predictable source of net income.
• Side Gig – could include babysitting, dog walking, or anything that brings in income not from a regular source. Often this income may be irregular in amount and frequency so you’ll want to take the average based on typical low and high amounts (MoneySwell calculates this for you in Cashflow Goals).
  

  Dog walking is a common side gig for many. Some even turn dog walking into a full time occupation!

• Government Income – this could come from SNAP, Social Security, TANF, SSI, a pension etc. 
• Support Income – could include support from parents or other sources who may send you money either regularly or irregularly. 
• Investment Income – could also include interest or dividend earnings from savings accounts or investments.
• Savings* – if you are planning to draw money from your savings, consider how much you want to draw in total, and divide that by the number of months you plan to draw it. For example if you are able and willing to draw $2,000 from your savings, and you need it to last four months, you have $2000 / 4 = $500 a month of “income.”

Conclusion

Now that you know your essential expenses and your net income, you can compare the two. If your net income is greater than your essential expenses, you support yourself! If not, you’ll need to find ways to increase your income or reduce your expenses as discussed in other tasks in this plan.