Clue On – Income

This will cover all your income, earnings, rebates i.e. incoming money. Things to consider include:

1. All Earnings
2. Frequency of Payments
3. Expected AND confirmed rebates etc

The first part of a Spending Plan is to calculate how much money you have coming in each month or 4-week period. It is much easier for those on fixed and regular incomes to calculate their expected monthly incomes.

With non-fixed or irregular incomes, I would suggest using an average or the lowest amount you have received over the past 3 months. Rather budget with a minimum amount than a maximum or some expected but not confirmed amount.

^{Do Not Plan Couscous In Your Neighbour’s Pantry.}

^{– Miss Wilberforce – Wesley Girls’ High School, Cape Coast}

Types of Income

1. Fixed and Regular Income
   • Salaries from day jobs
   • Rental Income
   • Confirmed consulting work payment
   • Any benefit payment
   • Overtime payment (consider this as regular amount if you can book in advance and it is guaranteed)
2. Irregular Income
   • Work Bonus
   • Proceeds/sales from side gigs – other consulting work, book sales, ebay sales etc
   • Proceeds from Investments
   • Birthday/Celebratory gifts to include gift cards/vouchers

NOTE – You can only spend money you have or are guaranteed. Use your guaranteed income.

Tips

1. Plan a month ahead using last month’s fixed figures
2. Find out your total monthly or 4-weekly earnings. I am paid on a 4-weekly basis and consider that as a month’s salary. This means each year, I am paid 13 times.
3. If you receive benefits, please include this in the total monthly salary.
4. If you are paid or receive any income on a bi-weekly basis, multiply by 2 and add this to your monthly salary.
5. Include confirmed overtime payments
6. For non-regular/fixed amount incomes;
   • You can ignore this and allocate it to savings once it is confirmed and received OR
   • Use last month’s income from these source making allowance for any reduction in sales figures etc
7. If you earn a fixed income, my recommendation will be to keep non-regular and non-fixed income as a savings target. If an income is not guaranteed, you cannot spend it!
8. For those income received from side hustles, rental income and most non-fixed income, Remember to Make an Allowance for Taxes. Save this amount in a Sinking Fund.

We will discuss Sinking Funds in subsequent posts.

For today’s exercise add up all your income and earnings. If you have non-regular income, look at your last payslip and use the average amount or the minimum.