Budgeting Process : Income Questions

“Don’t be afraid to get help for questions. Ask a trusted relative or friend. Or a licensed and certified financial professional.”
Carlos, Detroit

Again, do not let the pursuit of perfection stop you from moving forward. Get as accurate as you can and make a note to later go back and refine your numbers. Make sure you are not relying on inaccurate numbers though. Get a reasonable estimate and rely on it like you would an estimate, not an exact figure.

If your INCOME VARIES based on tips, commissions, seasonal work, et cetera, do your best to come up with a reasonable and reliable estimated average. You can look at your last year’s tax return and divide by 12 or average your last several months. Remember to be prepared for the slow times when you may not make as much.

COUPLES
It’s good to be on the same page about finances. Some couples go through this budgeting process together, combining incomes and expenses, while others keep their finances separate. In either case, make sure you are accounting for all your expenses and not assume your partner will cover it. Open communication is always the best option.

On to the next section!