What Income to Include in a Budget
To experience financial stability, you need a budget. One of the main facets of a budget is the income that you can count on for spending, saving or investing purposes. Whether you choose to base your budget on monthly or annual income -- it doesn't matter. What does make an impact is your attention to the sources and your accurate calculations of the income for your chosen budget plan.
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Salary and Bonuses
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If you are employed -- including self-employment -- you can include your salary and any bonuses you receive on a monthly basis or annual basis, depending on what type of budget you choose to use. Do not count your gross monthly pay as income because you won't actually receive everything you make due to deductions such as federal taxes, Social Security and Medicare. Base your actual income on the take-home or net amount of any salaries or bonuses you receive.
Investments
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You should include all the income that you actually receive from your investments -- such as interest, dividend or sale income from certificates of deposit, savings bonds, stock, mutual funds and money market accounts -- in your budget. Also, include any monies you receive from rental properties. Keep in mind not to include income in your budget that's automatically reinvested, instead of spent, such as stock dividends. Only use income that's available to use as part of your budget.
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Other Income
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Other forms of income that you should include in your budget are alimony, if applicable, pension or retirement and public assistance. In addition, if you receive any other monies during the month, from any source -- such as a trust fund -- include them as part of your other income.
Extra Advice
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It's important to remember that any monies you receive that have to be paid back in some form or fashion cannot be considered income. If you receive loan proceeds during a given month -- don't include the money in your budget because it will have to be paid back. If your income fluctuates each month, add up all known or projected income for three months in a row and divide the total by three to get an average income figure for budgeting purposes.
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