Your budget includes your income in addition to money you spend. In my previous posts on the budgeting process, I talked about setting your goals and tracking and recording your expenses. This week, I’ll focus on your paycheck and other sources of income.
Before getting to that topic, here are your budgeting tasks for this week:
- Continue using and refining your expense tracking system.
- Continue to enter your expenses into the spreadsheet.
- Record the details from your pay stubs and any other sources of income.
Your pay stubs include both your wages and some expenses and taxes that are deducted by your employer. This information can be entered on the Income tab. You’ll need your pay stub as it lists all of the items that flow into and out of your paycheck to get the net amount of your check or automatic deposit. Put information from each line on your pay stub in a different row on the Income tab of the spreadsheet.
The date of each paycheck goes in Column A.
Record the amount of each line item in Column B. Your income, such as your wages, should be entered with positive numbers. Deductions, such as taxes, your share of employee benefit charges and retirement savings, should be entered using negative numbers. Use one row in the spreadsheet for your wages and another for each of your deductions.
You can record the category for each line in Column C. If you want to use the tax approximation included in the spreadsheet, you’ll need use the labels “Wages”, “Retirement Savings” “Federal Income Taxes” and “State Income Taxes” for each of those categories. Otherwise, you can use whatever labels you want.
If you get paid less often than once a month, enter the number of paychecks you get each year in Column D of each row. Otherwise, leave this column blank.
Other Sources of Income
If you have other sources of income you receive on a regular basis, such as returns on investments, disability income or support from your parents, you’ll want to include those in your A plan showing targets for income and expenses over a fixed time period, such as a month or a year.. Unless you are on a leave from work or retired, you might leave any investment returns in your savings and not use them for spending. It is important to be aware of all sources of income in your A plan showing targets for income and expenses over a fixed time period, such as a month or a year. including increases in your savings, so I suggest including them in your A plan showing targets for income and expenses over a fixed time period, such as a month or a year. explicitly.
Interest, dividends and appreciation are the three most common types of returns from investments. If you have any such returns, enter their amounts in Column A, their category in Column B and how often you receive the amount from Column A in Column C. The three types of returns are taxed differently in the US. If you live outside the US or don’t want to use the very rough tax approximation in the spreadsheet, you can enter a single line item for total investment returns and call it whatever you would like. Otherwise, enter “Interest” in Column B for interest payments, “Dividends” for dividends received and “Appreciation” for changes in the market value of your investments. Appreciation can be either positive (market value has gone up) or negative (market value has gone down).
For any other sources of income, enter the amount, category (with a name of your choosing) and how often you receive that amount in Columns A through C, respectively. Sources of income other than investment returns and wages will be ignored in the income tax approximation.