Income vs expenses
Watch "Why Americans Can’t Save Money" on YouTube
My first job paid better than I expected. So how was I always short before the next payday? Turns out I’d never actually written anything down.
Income is money coming in: your salary, side hustle earnings, allowances, gifts.
Expenses are money going out: rent, transport, food, subscriptions, that “small” takeaway on Friday.
Every money situation comes down to one line:
Income − Expenses = what’s left
Three possible results
| Result | What it means |
|---|---|
| More than zero | You have a surplus. This is the money you can save or grow. |
| Exactly zero | You’re breaking even. Fine for now, but one surprise bill breaks it. |
| Less than zero | You have a deficit. The gap is coming from savings or debt. |
Why it’s harder than it looks
Income is easy to see, because it usually lands once a month in one big amount. Expenses are sneaky. They leave in dozens of small amounts that each feel harmless.
I tracked every spend for one month. Transport and small food buys alone were almost a quarter of my pay. I’d have guessed a tenth.
Try it this week
For seven days, write down every single thing you spend money on, however small. Notes app, paper, spreadsheet, it doesn’t matter. At the end of the week, add it up. You’ll learn more from that list than from any lesson.
