Budgeting Basics - Step 2 - Deductions

Now that we've gathered pay stubs or records and we've recorded gross pay over a period of time, let's see where the net pay amount comes from.

Look at your pay stubs over a full month, a recent month. Amounts deducted may not be the same for each pay period! Make a list of what items are deducted from the pay and how much. Do that for each of the pay stubs.

Some items are a fixed amount, like insurance.
Some vary based on the amount of pay, like taxes.

*If* your gross pay is consistent, the same each pay period, then for variable items you can just use the amount from one check for your budget.
*If* you have a consistent base pay or your pay is variable, then use the amount from your base pay or the lowest check from the last couple of years (the gross pay you're using to budget from).

If you aren't sure what to put for the deductions, you can work off of your net pay (the pay you receive after deductions are withheld) or you can make your best estimate.

Enter these amounts (gross pay, and all deductions) on the form you're using to record your budget.

If you're using the worksheet I provided, you can enter a monthly amount in the Monthly column and the sheet will convert it to annual, or you can enter an annual amount in the Annually column.

When this assignment is complete, you should have your monthly gross pay and monthly paycheck deductions recorded on your budgeting worksheet.

Back to the Beginning