Building a Budget on an Entry-Level Income

What You Will Learn

• Read a pay stub and tell gross pay from net pay
• Build a zero-based monthly budget
• Adjust a budget when income falls short

Lesson Notes

Gross Pay and Net Pay

Gross pay is what you earn before deductions. Net pay (take-home pay) is what's left after taxes and other deductions. Always budget with net pay.

Example: 35 hours × $15.00 = $525 gross per week. After about 12–15% in taxes and deductions, take-home is roughly $450–$460. Monthly take-home ≈ weekly × 4.33.

Zero-Based Budget

In a zero-based budget, every dollar has a job: income minus planned spending, giving, and saving equals zero. That doesn't mean you spend everything; saving is one of the jobs.

Needs, Wants, and Priorities

Pay the Four Walls first: food, shelter, utilities, and transportation. Then required obligations (supervision fees, child support, restitution), then giving and saving, then wants.

When money is short, cut wants first, look for assistance programs, and talk to creditors before you miss a payment.

Tracking Spending

A budget is a plan; tracking tells you whether you're following it. Write down every purchase for a month. Small daily spending (snacks, drinks) adds up quickly.

Key Terms

In-Class Activities

Read the Pay Stub

Using the sample pay stub, find: hours worked, hourly rate, gross pay, federal tax, Social Security, Medicare, and net pay.

Budget Challenge

Monthly take-home pay: $1,950. Build a zero-based budget with these: rent $700, utilities $120, groceries $300, bus pass $80, phone $45, supervision fee $40, child support $200, giving $195, emergency savings $100. How much is left? Assign it a job.

Assignment: My Release Budget

Build a zero-based monthly budget for your first job after release (use a realistic hourly wage for your area; your instructor can help).

• Calculate estimated monthly net pay.
• Include the Four Walls, obligations, giving, and saving.
• Balance it to zero.
• Write what you would cut first if income fell by $200.

Graded with the Module Assignment Rubric.

Reflection Journal

Proverbs 21:5 says the plans of the diligent lead to plenty. Where in your life have you been diligent, and where have you acted in haste? What would it look like to bring diligence to your finances?

Prayer focus: Ask God for diligence in planning and for trust in His provision when numbers are tight.

A Plan for Every Dollar

Your first paycheck after release may feel like a lot of money, or it may feel like nowhere near enough. Either way, a budget helps you make it do what matters most.

Start by understanding your pay stub. Gross pay is what you earn before deductions. Net pay is what reaches your hands after taxes and other deductions. Always budget with net pay. If you work 35 hours at $15 an hour, your gross weekly pay is $525, and your take-home pay may be roughly $450–$460.

A zero-based budget gives every dollar a job. Income minus planned spending, giving, and saving equals zero. That does not mean spending everything. Saving is one of the jobs.

Pay first for the Four Walls: food, shelter, utilities, and transportation. Then required obligations such as supervision fees, child support, or restitution. Then giving and saving. Then wants.

When money falls short, and sometimes it will, cut wants first, look for assistance programs, and talk with creditors before you miss a payment. Track every purchase for one month. Small daily spending adds up faster than most people expect.

Think About It

1. What expenses will you have that are easy to forget? ______________________
2. What would you cut first if money were short? ______________________
3. How do you feel about tracking every purchase for a month? ______________________

Daily Devotions for Week 2

Diligent Plans

The thoughts of the diligent tend only to plenteousness; but of every one that is hasty only to want.— Proverbs 21:5 (KJV)

Diligent planning leads to enough; haste leads to lack. A budget is diligence written on paper.

Reflect: Where have hasty decisions cost you?

Pray: Lord, make me diligent.

Do: Spend 15 minutes working on your budget.

Counting the Cost

For which of you, intending to build a tower, sitteth not down first, and counteth the cost?— Luke 14:28 (KJV)

Jesus praised the builder who planned. Planning is not a lack of faith; it is wisdom.

Reflect: What are you building in your life?

Pray: Lord, help me count the cost wisely.

Do: Estimate the monthly cost of your Four Walls.

Honor With Firstfruits

Honour the Lord with thy substance, and with the firstfruits of all thine increase.— Proverbs 3:9 (KJV)

Giving first says, God, You are my provider. Even a small amount given first can change our hearts.

Reflect: What would giving first look like for you?

Pray: Lord, I honor You with what You give me.

Do: Add a giving line to your budget.

Daily Bread

Give us this day our daily bread.— Matthew 6:11 (KJV)

We plan, and we also depend on God one day at a time. Both belong together.

Reflect: Where do you need daily provision?

Pray: Lord, give me today what I need.

Do: Thank God for today's provision before each meal.

The Ant's Wisdom

Go to the ant, thou sluggard; consider her ways, and be wise… Provideth her meat in the summer.— Proverbs 6:6, 8 (KJV)

The ant prepares in good seasons for hard ones. Even small savings in good weeks help in lean weeks.

Reflect: What can you set aside in good weeks?

Pray: Lord, give me the ant's wisdom.

Do: Decide on an amount to save from each paycheck.