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Creating A Budget

Although to some, the phrase is as abhorrent as “going on a diet,” creating a budget is one of the most important things you can do to secure financial control and begin to build a better future for yourself. There are of course endless ways to do this but as someone who has only recently begun to Take Financial Control this could be a great place to start. Budgeting doesn’t have to be painful, it doesn’t have to ruin your social life either but it most certainly will help you create a sustainable plan of action to bring about the freedoms that you look to have on a daily basis and in your future.

creating a budget as a server hospitality worker

Cash Flow

Understanding where your money comes from and where it is going will be the building blocks for your budget, without this information you won’t make any progress. Start by breaking down your cash flow in to the two most obvious categories: income and spending.


Regular Income
  • Your regular paycheck(s) from your job(s) - if you are a tipped employee or have a varying wage, track your paychecks and find the average. A useful method for this is to use a rolling average from the most recent 4-6 paychecks to get a good idea across the seasons of what your average pay is.
Irregular Income
  • This is important to track but generally shouldn’t be put towards your budget calculations since it can not be relied upon as regular income - it’s best to just save this income when it does come in!


Fixed Costs
  • Any bill, rent, car payment, insurance, phone or utility costs that are recurring and must be paid. If you can not pay these, your expenses must be adjusted accordingly.
  • Everything that is not a bill. This includes food, gas, coffee, booze, going out to eat, to the movies, on dates, taking uber rides, etc. Seriously, everything.


Figuring out your income is the easy part, even if you are a tipped employee, but you have to take the initiative and start recording everything. Keep track of your paychecks, cash tips, training hours worked, everything. A great tool for this is Google Forms and Sheets. The learning curve is low and the options are endless - it’s also free! The same goes for the spending side of things; a quick home screen shortcut on your phone and you’re able to enter all your spending on the fly then crunch the data at your leisure - no need to save receipts.

Once you have all this data on where your money is coming from and going to, now you can begin to break it down and understand your cash flow. We will use an example that should be familiar to most and should serve as a good template for your own data, which will be the base for your budget. It is by no means one size fits all but you’ll get the idea.

Average Monthly Income: $2500

Spending: Monthly Fixed Costs:
Car Insurance $60
Rent $650
Phone $50
Spotify $15
Internet $50
Utilities $150
Health Insurance $250
Student Loans $300
Total: $1,525

Remaining Cash: $975

Whether or not this looks like your income and fixed costs, doesn’t matter, what is important is that you are honest when compiling this data. In the example above, Spotify is listed as a fixed cost, but is it really? Do you actually need that? Of course not, but if you’re going to choose to use it, you need to treat it as a fixed cost. If this person’s income was much lower and there was no remaining budget after paying all fixed costs, then the luxuries within the fixed costs categories would need to be removed. It might sound crazy these days but having a phone is a luxury. The same goes for Spotifiy and an internet connection too. Being able to feed yourself is just as important as saving for the future, and much more pressing than listening to ad-free music or watching Netflix at high speed.

creating a budget and eating well

Creating a Budget

What’s important to remember when it comes to budgets is expressed in our example; fixed costs do not come into account - those bills must be paid and the cash they require from each paycheck should be treated as though it is already spent. Never, overstep your income or you will go down a path that is hard to return from. America might be built on credit card debt but your life should not be.

Continuing with our example, our budget begins with $975 of “free cash” per month. That is pretty solid and more flexibility than most might have in this industry but for this example, size doesn’t matter, it’s how you distribute it that does. To begin, it helps to take stock of past spending. How much do you truly need to spend to live comfortably each month? Do you need to eat out all the time or can you cook at home more often? Is that $14 cocktail really worth it, can you take public transit instead of an Uber or simply walk home? Eventually you will need to set an arbitrary number, not in stone, but as a starting point to how much you think you should be spending each month. For this budget, $500 seems like more than enough for spending money. Remembering, that spending money is for everything that isn’t a bill - that includes food, gas, coffee and even stuff as small as a pack of gum. Track it all or your budget will be ignored and useless.

Free Cash: $975

Spending Budget: $500

Remaining Cash: $475

Since our spending budget allowed for a surplus, we’re in luck, we get to save for the future with ease! A great place to start is with a savings account, if you don’t have one yet, get one! Find an online bank like Capital One that has a high interest rate with no fees and start raking in that free money.

The Whole Picture

With all of this new found information your progress towards gaining Financial Control and awareness will be bolstered. Data isn’t the only thing you need, however, it’s all about commitment and in order to make that easier on yourself you’re going to want to make this new budget of yours sustainable. You’ll need to be aware of your slips and why they happen, was it because you’ve been too hard on yourself or is your budget simply not possible? Either way, make sure to leave room for life’s joys and make a budget that is holistic enough to do so. It’s ok to go over budget here and there, don’t beat yourself up over it; learn from your experiences and grow with them as you make your way to a better financial future.

written by Alex Navarro