When it’s time to review my budget, calculating my income means more than looking at my paycheck. To understand how much money I’m working with, my first step begins with looking at my income and the expenses I’m responsible for each month. This helps me set better goals and priorities.
For athletes, calculating your budget might look very different depending on what stage of life you’re in. If you’re still in high school or college, maybe you only work during the summer or during the off-season. Maybe you have a side hustle, or maybe you can only work odd jobs due to your competition or training schedule.
Whatever your situation is, I always start with the following items when reviewing my budget: my income, taxes, my needs, and my wants. Below are more details that fellow athletes (like me!) might find helpful.
Budgeting for Athletes: Identifying Income, Wants and Needs
Step #1, Identify Income
This is easy to figure out: what do you make with your full-time job, part-time job, side hustle, or other streams of income?
Step #2, Calculate Taxes.
This link helps calculate what your paycheck will look like after taxes are taken out. If you work for a company or organization, I’m pretty confident your taxes are already taken out of your check. However, if you work for yourself, like if you have NIL partnerships or own a business, you’ll need to calculate and file taxes.
I also put money aside in case my tax withholding amount was incorrect. It’s great to receive a small refund each year, but if too little taxes came out of my check I’ll owe money. Putting a few dollars aside prevents me from scrambling like I’ve done in years past, and that’s not fun!
Step #3, Identify Needs.
I’ve read that your needs should add up to 50% of your income. However, if you live in an expensive area of the country, it might be hard to keep your needs under 50%. An example of necessary expenses I’ve accounted for include:
- Housing
- Food
- Utilities
- Clothing and products
- Transportation
- Childcare
- Insurance
- Cell phone bill
- Loans and credit card debt
Step #4, List Wants
Wants are just that… wants. You technically don’t need anything on this list, but these items can make your life very comfortable and enjoyable. This list might include items like:
- Gym membership
- Workout clothes & gear
- Vitamins and suppliments
- Emergency funds
- Retirement funds
- Subscription services
- Home décor
- Nail and hair services
- Pets and pet care
- Vacation and leisure activities
These are just a few of the items to consider when putting together your budget. As an athlete, I make sure to budget for expenses like my Peloton subscription, new training shoes every few months, and nutritious food to help fuel my workouts. When planned for, these items help me stay healthy and feel good without hitting my finances.