Signed in as:
filler@godaddy.com
understanding Money basics
Your Paycheck
The Balance Sheet
Your Paycheck
Money manifests in different forms, including your paycheck. Common paycheck elements are:
- Gross Pay – what you make hourly or annually.
- Deductions – amounts subtracted for taxes, garnishments, direct deposits, or employment benefits.
- Net Pay – how much pay you get after deductions.
Cash Flow
The Balance Sheet
Your Paycheck
As soon as your "net" paycheck hits your bank account, the cycle of deposits and spending beings.
Every swipe of your debit card at a store, every check written for a bill, and every ATM withdrawal generate dozens of bank transactions that appear in your bank statement.
This constant swirl of deposits and spending into and out of bank accounts is called cash flow.
The Balance Sheet
The Balance Sheet
The Balance Sheet
A balance sheet helps you visualize and measure your cash flow within a specified period of time including:
- Incoming Money – how much money comes in.
- Outgoing Money – how much money goes out.
- The Balance – how much money is left over this month.
Negative balances mean you are spending more than you make and may signal financial trouble.
Take a look at these Money tips! (Seek advice from your CFP)
Saving More
- Figure out how much money you want to save by the end of the year, then divide that amount by 12 months.
- Set up a direct deposit from your paycheck or bill pay from online banking into your savings account monthly.
- Build up a one-year emergency fund.
Paying Off Debt
- Create a six-month to one-year budget to plan which debts to pay off and when.
- Beware taking on more debts (cashing out retirement fund loan or home equity line-of-credit loan)—even if you use them to pay down debt—which may add extra penalties, fees, and tax liability.
- Pay bills and expense with your debit card, not your credit card.
Building Wealth
- Seek the advice of a certified financial planner to help you create a long-term plans to grow your money.
- Enroll in the retirement savings program at work (401k or 403b) to get employer matching contributions.
- Invest 10-15% of your income monthly to retirement savings.