Newbies - Financial Considerations
Income & Expenses
If you spend the big checks when you get them, you will have a harder time getting by on the weeks when the net amount is less. The secret is in figuring out what your average weekly checks will be and finding an appropriate spending limit.
To find out what your average weekly income is, total your pay stubs over the past three months. The longer you have been driving for the same carrier, the more accurate you can be on determining your income. Add up as many weeks' income as you can and divide they total by the number of weeks. You will arrive at your average weekly income. If you can anticipate any bonus checks, make sure you add them to your total amount so you can include them in your calculations.
Some drivers like to receive a big refund check from their income taxes. They adjust their deductions accordingly so they will have a large check in April. If you choose to allow the government to use your money interest free all year then this plan might work for you, but you would be better off to adjust your payroll withholding and have the money set aside in an interest-bearing account.
Once you determine what your average weekly checks will be, you can set up a spending plan or a budget. Look at all of the bills you pay each month and write each one down on a piece of paper. Estimate your monthly grocery and clothing expenses. Write down the house payment or rent, utilities, automobile expenses and everything else you can think of that you spend in any given month. Don't forget the Internet or cable bills, and the money you spend on eating out or entertainment. Also, be sure to include annual bills such as your property taxes, home or renter's insurance, license plates, life insurance and other major expenses.
After you have your total expenses for the year written down on paper, add the numbers and divide by 52 weeks to determine your weekly expenses. Even though some items, such as your property taxes, may not be due until the end of the year, they are a real expense and should be included. This will allow you to pay these bills when they are due instead of having to borrow or suspend payment on your other payables. By writing down the numbers and looking at them as a weekly cost, it will give you a more realistic figure of your spending needs.
If your total earnings equal a number less than what you spend, you will need to look closely at your list of expenses and decide what you can live without. Some items that can be reviewed include entertainment costs and clothing expenses. You might have to forgo that new pair of shoes or wear last year's coat one more year, but you'll know what you will have available for the things you can't do without.
If your total of payments is less than what your salary averages, you will be able to live within your budget if you stick with these figures. Any extra dollars leftover can be set aside for future uses. Or, you can decide to allow yourself a few more dollars for entertainment or eating out once in a while. It's okay to enjoy some extravagances for yourself as long as you know you are staying within your own financial guidelines.
There are some additional things to consider when you set up a household budget. As a truck driver, you are often allowed to take cash advances from future paychecks to cover expenses on the road. If you can avoid cash advances from the carrier, do not take them. These will add up quickly and sometimes will eat up your entire weekly check if you don't keep track of them.
Once you have learned to spend less than your weekly checks you can set money aside for things like vacations, retirement or your children's college education. Make these a priority and include them in your budget if possible. If you can put $30 each week into a savings account for your trip to Florida you will have more fun knowing that your vacation won't put you into debt, and you'll be able to relax and enjoy your time off.
As a professional driver, you must learn to watch the dollars that come in and the dollars that you spend, or you will suffer from financial difficulties before you know it. Putting the figures down on paper forces you to acknowledge the way you spend your hard earned money and allows you to be better informed in making financial decisions. Understanding your spending needs and taking control of your income and expenses will allow you to set financial goals and establish a budget you can live with, even when you are on the road.