Budgeting for Your Own Salary: Why the Owner Should Be the First (Not Last) to Get Paid.

You started your business to build something meaningful and to make money. So why is your paycheck always an afterthought? You pay vendors, employees, and rent, but when it comes to yourself, you take "whatever's left over."

Here's the hard truth: if your business can't afford to pay you a consistent salary, your business model might not be sustainable. It's time to stop subsidizing your business with your own unpaid labor.

The "Whatever's Left" Trap

Taking random amounts each month feels responsible, like you're putting the company first. But you're actually hiding the true cost of running your operation. When you don't budget for your salary, you're essentially lying to yourself about profitability. Your time and expertise are worth more than zero dollars.

Your Salary is a Business Expense, Not a Perk

Would you tell your best employee, "I'll pay you whatever's left at the end of the month"? Of course not. Your labor has value. Whether you're acting as the CEO, head of sales, or janitor, those roles have a market cost. Your salary is compensation for the work you do; profit distributions are something else entirely.

The Sustainability Test

Want to know if your business model actually works? Budget your salary first and see if the numbers still make sense. This is the "sustainability test":

1. Determine a fair market salary: What would it cost to hire someone to do your job?
2. Add that to your fixed expenses: Put it at the top, right next to rent and payroll.
3. Check the bottom line: Can you still cover everything? If not, you have a business model problem, not just a profit problem.

How to Build Your Salary Into the Budget

• Set a Baseline: Start with a number that covers your basic personal expenses. That's your "floor."
• Schedule it Like Payroll: Pick a date and stick to it. Transfer your salary just like you would for an employee.
• Adjust Quarterly: Don't tinker with your pay every time revenue fluctuates. Commit to a level for three months at a time.
• Build a Buffer: Aim for 2-3 months of operating expenses (including your pay) in reserve so one slow month doesn't derail you.

The Bottom Line

You are not a volunteer. Budgeting your salary as a core expense forces you to build a genuinely sustainable business. It gives you the stability to make better decisions and actually enjoy the fruits of your labor.

Need help restructuring your budget so you actually get paid? Let's talk. At Ledger Leaders Strategy Group, we help owners turn financial chaos into clear, profitable strategies.