Creating a personal budget may not be on the top the list of fun activities. But if you want to buy a house, a new car or simply ensure you are saving for the future, then a budget is the way to go. 

When you start working on a personal budget, the first item you have to define is income. Without income, nothing else happens. 

There are different types of income to consider. You have fixed income – your regular base pay if you are working a full-time job. Then there’s income that varies – bonuses and side work. 

You have to account for those types of income differently when creating a budget. You don’t want to budget for income that doesn’t come in the way you planned, according to Keith Newcomb, founder of Full Life Financial in Nashville, Tennessee. 

The salary you earn from your full-time job is the easiest type of income to put into your budget. If you have other income, such as alimony and child support, that also should go into the fixed income basket for your budget, according to Newcomb. 

Alimony and child support can pose challenges, however. “It’s only as reliable as the person who is paying it and their financial planning,” Newcomb said.

Depending on the terms of the divorce decree, alimony and child support income could or will go away at some point, so you have to budget accordingly. Alimony payments, in particular, may start out at one level and then drop based on you earning more income. Or, the alimony could be revoked if a judge determines that you aren’t trying hard enough to find a job or you’ve spent the money frivolously. 

It’s just a matter of how the terms are laid out in the divorce decree. The laws vary from state to state, and a judge can change the terms at any point. If alimony is your only source of income, experts suggest that you absolutely create a budget and stick to it. 

When you create your budget, your steady income should pay for all of your bills and help build savings. “You don’t want to become dependent on sporadic income to cover fixed expenses,” Newcomb said. 

Anything else you get in income – bonuses and gifts – is gravy. You put that into savings, investments or pay off debt more quickly. 

But let’s say your full-time job is waiting tables and most of your income comes from tips. Typically, there’s an hourly rate. But that alone may not cover all of your bills. So, you have to work off of a running weekly average on your tips, according to Newcomb. 

“When you have a surplus from a big day don’t spend it all unless you’re already behind and have to catch up,” he said. “You have to be prepared for slow times.” 

Newcomb suggested that someone who is new to waiting tables should gather data from the restaurant manager to get an idea of the income that can be expected. He said you ask about average table turn rates, number of tables you typically will have at peak times, and average tip amounts waitstaff typically earn. 

If you have a full-time job and need a part-time job to make ends meet, Newcomb said you need to take a hard look at your expenses to establish a goal to end the need for part-time work. It’s not unusual that people take part-time jobs outside of their full-time jobs to pay the bills. A recent CareerBuilder survey showed that 78 percent of U.S. workers live paycheck to paycheck. 

But it’s a different matter if there’s a big goal in mind, one that is outside of your standard expenses and lifestyle and is part of a specific plan. Newcomb said a people work part-time jobs to speed up saving for such big expenses as college tuition for their children. Others may do it to get out of debt more quickly. 

Even though it’s part-time income, it still fits somewhere in a budget if you create one. The word “budget” has a tendency to make people cringe. But Newcomb said it doesn’t have to be a scary word. “A budget isn’t rocket science,” he said. 

He said your checking account balance is either growing or it’s not. All you have to do is look at your expenses – and be real with yourself about that they are – to determine where you may be leaking the money that prevents your checking account balance from growing. 

Newcomb said look at your checking statement and do a line-item mark-up of spending: “have to”, “just wanted to”, and “wish I hadn’t”. Then, he said, budget so you don’t have a lot of “wish I hadn’t.” 

The key is to reduce or eliminate the “wish I hadn’t” items and keep a check on the “just wanted to” items, Newcomb said. 

When you do that, Newcomb said you’ll better see how your income works for you in building up your checking account.