Determine Income and Expenses Income is money that comes to you from: Wages Self-employment income Public assistance, includes Temporary Assistance for Needy Families (TANF) or Food Stamps Child support or alimony Interest and dividends Other sources (e.g., tips) There are two categories of income: gross income and net income. Gross income is your total income without deductions. Net income is gross income minus deductions, such as Social Security and other taxes. Social Security is a potentially valuable insurance plan. On some pay stubs, it is called FICA, which stands for Federal Insurance Contribution Act. Social Security income includes: Retirement benefits paid every month to eligible retired workers, as early as age 62 Disability benefits paid every month to eligible workers of all ages who have a severe disability Family benefits paid month to spouses and children of eligible retired and disabled workers Survivor benefits paid every month to the eligible widow or widower and children of a deceased worker Medicare benefits paid as needed to help with hospital bills and offer limited coverage of stays in skilled nursing facilities, hospice care, and other medical services to people 65 or older and to younger people who are disabled There are two kinds of expenses: fixed and flexible. expenses do not change from month to month. Typically, you do not have any control over how much you pay. Your rent or mortgage payment is an example of a fixed expense. Flexible expenses change from month to month. You may have some degree of control over how much you pay. For example, if you decide to lower your thermostat during the winter to save on heating costs, you will pay less than you did the month before.
Determine Income and Expenses Income is money that comes to you from: Wages Self-employment income Public assistance, includes Temporary Assistance for Needy Families (TANF) or Food Stamps Child support or alimony Interest and dividends Other sources (e.g., tips) There are two categories of income: gross income and net income. Gross income is your total income without deductions. Net income is gross income minus deductions, such as Social Security and other taxes. Social Security is a potentially valuable insurance plan. On some pay stubs, it is called FICA, which stands for Federal Insurance Contribution Act. Social Security income includes: Retirement benefits paid every month to eligible retired workers, as early as age 62 Disability benefits paid every month to eligible workers of all ages who have a severe disability Family benefits paid month to spouses and children of eligible retired and disabled workers Survivor benefits paid every month to the eligible widow or widower and children of a deceased worker Medicare benefits paid as needed to help with hospital bills and offer limited coverage of stays in skilled nursing facilities, hospice care, and other medical services to people 65 or older and to younger people who are disabled There are two kinds of expenses: fixed and flexible. expenses do not change from month to month. Typically, you do not have any control over how much you pay. Your rent or mortgage payment is an example of a fixed expense. Flexible expenses change from month to month. You may have some degree of control over how much you pay. For example, if you decide to lower your thermostat during the winter to save on heating costs, you will pay less than you did the month before.
budget_challenge_packet_2016.docx