Why do Most Serious Budgeters Neglect Their Biggest Category?


Why on earth don’t budgeters talk more about income? It’s your biggest budget category – bigger than all others combined (hopefully).

As YNABers we spend time each day, week, and/or month reviewing our spending: How are we on groceries, what’s left in the misc category, how soon until we can buy the thing we’ve been saving for?

Why wouldn’t we also spend a few minutes during that same meeting thinking about income?

Wasteful non-budgeters don’t benefit from pay increases the way budgeters do – our expenses are so dialed in that any bump to our pay makes a big difference to the bottom line.

In my case:

  • A 15% increase in income would cover all my Rainy Day categories (and that’s allowing for taxes and charitable contributions coming off the top).
  • Or…a 25% jump in income would cover my mortgage.
  • Or…a 35% pay increase would cover everything in my “Monthly Bills” master category (everything but debt service, savings, rainy day funds and charitable contributions).

Is it easy to bump your income 15% to 35%? Probably not – that’s a topic for another day. Salaried people tell me increasing their income involves performance and patience – but also politics and positioning. In other words, they have some influence over their income, but not a lot.

So what? Exert whatever influence you can. The return on effort toward increasing your income is much bigger than the return on figuring out how to cut your grocery budget by $50 per month.

Budgets are Bones; Earning Power is Muscle

Without your financial skeleton (budget), your muscles (income) are a worthless pile of mush. But if your money bones are strong, building your earning muscles lets you do more work (saving, paying off debt, and even spending) in less time.

Which is why that rare person who is both a dynamic earner and disciplined budgeter is so easily identified by his/her enormous smile and overflowing bank and investment accounts.