Money in, money out · Module 2 of 10
Your floor and your slack
Work out the least you need each month, the wiggle room above it, and what to do in a tight month.
Key terms in Your floor and your slack
- Essential expense
An essential expense is a cost a household must cover to meet basic needs, such as housing, food, clothing, and insurance. Consumer agencies distinguish these needs from wants when people review where money goes. The line between the two can vary by circumstance, such as a tool or vehicle required for work.
Source: Consumer Financial Protection Bureau, Track your spending with this easy tool
- Cash flow
Cash flow is the timing of when money comes in as income and when it goes out as spending. A person can have enough income across a year and still face shortfalls mid-period if bills arrive before pay does. Laying income and expenses along a calendar is a common way to see these gaps.
Source: Consumer Financial Protection Bureau, An essential guide to building an emergency fund
- Irregular income
Irregular income is money that arrives at unpredictable times or in varying amounts, as with seasonal work, commissions, or one-time payments. Expenses such as rent usually stay on a fixed schedule whether or not income arrives. Consumer agencies treat the mismatch between the two as a main cause of cash flow trouble.
Source: Consumer Financial Protection Bureau, An essential guide to building an emergency fund
Every term on Lever is in the money glossary.
About this module
Your floor and your slack is part of Money in, money out, one of 15 subjects in Lever. It’s a short run of 13 lessons, about 33 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Money in, money out
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1
What lands in your account
Read your payslip line by line and see where the gap between your salary and your paycheck goes.
5 lessons -
3
The size of a life after work
How much of your income to keep for later in life, and why your working years are the easiest time to build it.
5 lessons -
4
The pension that's already being built for you
What the pension deductions on your payslip are buying you, and what changes if you claim early or keep working.
5 lessons -
5
The costs retirement doesn't warn you about
The retirement costs people forget: relying on one income, what a partner is left with, and health costs that rise later.
5 lessons -
6
When there is no wage
Managing money without a regular paycheck: cash income, gig work, months with nothing coming in, and making savings last.
7 lessons -
7
When the plan stops matching the month
What to do when your budget stops matching real life, including when it’s the budget that needs to change.
6 lessons -
8
Tracking without obsessing
A simple tracking habit you’ll keep, a quick monthly review, and how to stop a raise from quietly disappearing.
6 lessons -
9
Everything you own, minus everything you owe
Your net worth: everything you own minus everything you owe, and why watching it over the years tells you so much.
6 lessons -
10
When the money itself shrinks
How to protect your money when prices rise fast: what to buy ahead, and what inflation does to your debts and your pay.
5 lessons
Try this module
It’s part of Money in, money out. Lever will bring it to you when you’re ready, or you can go straight there.