I AM IN CHARGE OF MY MONEY: The Budgeting Section
Reflect:
How do you feel when people ask you how much you make?
There was a time where I hated when people asked me how much I made. Pleasantries aside, there were times when I hated that question simply because… I didn’t know 🤷🏻♀️
Although it sounds like a simple question, I never had a straight forward answer. I knew what my annual salary was, but what about my monthly salary? What about hourly?
Even then, there are factors as “pre-tax” or stock options and RSUs. It can vary so much. While everyone’s financials are different, there are certain things you can use to help you get to the bottom of this question.
For starters, you should know how much money you get in every paycheck. The next step is figuring out what is being taken out of it for taxes, insurance, and other deductions.
Don’t fret. We’ll figure it out together.
Take home pay is the money we receive from our employer after they have taken out taxes and other deductions. This amount is what we get to keep and use for our own spending. Take Home pay is the amount of what you make that actually goes into your pocket. This the number you must refer to when building out a USEFUL budget.
If you aren’t immediately sure how much goes into your paycheck, visit your employer’s HR and Payroll programs. Lots of companies use software like Workday or ADP.
Then, take a careful look at how much is going into taxes and other deductions. The deductions may include health or life insurance, 401k, or RSUs.
To help you calculate how much of your wages go into taxes, use this calculator below. Once you’re finished, write down your numbers before moving onto build a budget.