Broke-ish to Functioning: Step 1
Step 1: Know Your Numbers
Start here if you haven't read the introduction.
Welcome to Step 1 of Life Under Maintenance: 10 Steps to Get from Broke-ish to Functioning.
And this one matters more than anything else on the list.
Because before you can save more money, pay off debt, build an emergency fund, or start getting ahead…
you need to know what the hell is actually happening with your money.
That means two things:
Know what comes in.
Know what goes out.
That’s it.
Simple concept.
Not always a fun one.
But if you’re constantly saying things like:
“Where did all my money go?”
“I make decent money, why am I still broke?”
“I swear I just got paid.”
Then this is where we start.
No shame. No judgment. No pretending.
Just numbers.
First: Write Down Every Bill
Start with your regular monthly bills.
Go through your bank account, email, autopay accounts, or wherever you keep track of things and write down:
Due date
Bill name
Minimum payment
Total debt owed, if there is one
This might include:
Mortgage or rent.
Car payment.
Credit cards.
Personal loans.
Insurance.
Phone.
Internet.
Utilities.
Subscriptions.
Childcare.
Anything that regularly takes money out of your account.
And yes, even those little subscriptions count.
Because individually, $9.99 doesn’t feel like much.
But when you have six of them quietly hanging out in the background, suddenly you’re wondering why your checking account is looking disrespectful.
The goal right now is not to cancel anything.
We’ll get to that.
For now, just know the number.
Next: Figure Out Your Income
Now we need to know how much money you actually have coming in.
If Your Income Is Fixed
This part is pretty easy.
Write down:
Your upcoming paycheck dates
The amount you expect to receive
Any other reliable income coming into the household
Do this for at least the next month.
The goal is to know what money is coming in before you start assigning it somewhere.
If Your Income Changes Every Paycheck
This is where people tend to struggle with budgeting.
If one paycheck is $1,600, the next is $2,100, and the one after that is $1,750, you cannot build your budget around your best paycheck.
That is how you end up budgeting money that technically does not exist yet.
Instead, I like the idea of creating what I call your:
Safe Income
Take your last 6–8 paychecks and calculate the average.
I personally like using eight because it gives you a wider picture and helps smooth out unusually high or unusually low checks.
For example:
Last eight paychecks average:
$1,850 per paycheck
If you’re paid twice per month:
$1,850 × 2 = $3,700 average monthly income
Now here is the important part:
Do Not Budget the Entire $3,700
If your income varies, I would personally budget around 85–90% of your average income.
Using the same example:
Average monthly income:
$3,700
90% budgeting income:
$3,330
That gives you:
$370 of breathing room
Now if your income comes in a little lower than expected, your entire budget does not immediately fall apart.
And if the full $3,700 comes in?
Great.
You now have extra money that can go toward savings, debt, sinking funds, or whatever goal you're working on.
I would much rather see you underestimate your income than create a budget that only works during a perfect month.
Now Comes the Part Where You Have to Be Real with Yourself
Open your banking app.
Open your most-used credit card.
And start looking at where your money has actually been going.
Not where you think it goes.
Where it actually goes.
You’re going to start creating categories based on your real spending.
Some common categories might include:
Groceries
Gas
Restaurants or takeout
Pets
Kids
Shopping
Household supplies
Personal care
Entertainment
Donations
Medical
Hobbies
Go back several months if you can.
I like looking at around 3–4 months because one month can be weird.
Maybe you had a birthday.
Maybe you bought Christmas gifts.
Maybe your dog decided to personally fund your veterinarian’s next vacation.
One month does not always tell the full story.
Here’s an Example from My Own Life
I buy a lot of my pet supplies through Chewy.
So instead of randomly deciding:
“Okay, I’m only spending $100 on pets this month.”
I can actually look at my Chewy purchases.
If I look back over the last four months and see that I normally spend between:
$200–$240 per month
then my pet budget probably should not be $100.
I would round it up and budget:
$250 per month
If I only spend $210 that month?
Awesome.
That leftover $40 can roll over for a future month when I need dog food, flea medication, toys, treats, or whatever else comes up.
That is a budget based on reality.
Stop Creating Budgets for Your Imaginary Responsible Alter Ego
This is one of the biggest mistakes people make.
You look at your spending and see:
Takeout: $180
Then you decide:
“Starting next month, I’m only spending $20.”
Okay.
Maybe.
But probably not.
If you genuinely want to cut it down, give yourself a realistic target.
Maybe start with:
$120
Then $100.
Then $80.
You may naturally spend less simply because you’re paying attention now.
That is great.
But during the first 3–6 months, give yourself some grace while you learn how you actually spend.
Unless…
you are currently spending more than you make.
Then we need to have a different conversation.
Because if your account is already going negative every month and you're spending $180 on takeout…
bitch, sit down. You do not have $180 for takeout.
That money has officially been reassigned.
We can bring the tacos back later.
The Goal of Step 1 Is Awareness
You are not trying to become perfect with money today.
You are simply gathering information.
At the end of this step, you should know:
How much money comes in.
How much your bills cost.
How much debt you owe.
When your bills are due.
Where your money normally goes.
And approximately how much you realistically need for your everyday spending categories.
Once you have that information?
Everything else gets easier.
Because now you are making decisions based on actual numbers instead of guessing.
And yes… I Am Giving You Permission to Buy One Thing
I know. I know.
We're talking about finances and I'm already telling you to spend money.
But if it will actually make you sit down and do this?
Buy yourself a notebook.
Get a folder.
Make a spreadsheet.
Use the Notes app on your phone.
Print out a budgeting sheet.
Use whatever makes your brain happy enough to actually stick with it.
It does not have to be fancy.
It just has to work for you.
And if you don’t want to build your own spreadsheet, click this link to download a free simple "Know your numbers PDF"
There is also a Digital Basic Budget available
If you want to get started on a full Personal Finance Budget, this is available as well.
Your Step 1 Homework
Before moving on to Step 2, sit down and write out your numbers.
You need:
Your bills
Your debt balances
Your income
Your realistic spending categories
Your average monthly spending
Do not worry about fixing everything yet.
We’ll do that next.
For now:
Know what comes in. Know what goes out.
Because your money gets a whole lot easier to manage the moment you stop guessing.
Coming Next: Step 2 — Setting up your automated savings account.
Follow Life Under Maintenance and work through the 10 Steps to Get from Broke-ish to Functioning with me.
And if you’re working through Step 1 right now, tell me:
What category surprised you the most when you actually looked at how much you were spending?
For me it was the money we were spending on Video Games, because .99 cents here or 4.99 there adds up and when my husband purchases coins for his 2k26 game... well that was $120 last month.... oopps.
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