c) What is the “net spendable income” (Burkett, 12)?
Net spendable income is that portion available for family spending. Some of your income does not belong to the family and therefore cannot be spent. For instances- category one: the tithes; since the term tithe means “a tenth,” (Burkett, 12) I will assume that you give ten percent of your total income to God. Category two: taxes; federal withholding, taxes must also be deducted from your gross income. Self-employed individuals must not forget to set aside money for quarterly payments on taxes. Beware of the tendency to treat unpaid tax money as windfall profit.
Other deductions: payroll deductions for insurance, credit union, savings or debt payments, bonds, stock programs, retirement, and unions. These can be handled in either of two ways. One: treat them as a deduction from gross income the same way as the income taxes. Two: include the in spendable income and deduct then from the proper category. This is preferred because it provides a more accurate picture of where the money is being spent. d) Net spendable income equals gross income minus tithe and minus taxes. e) How is net spendable income being spent? Category three- Housing expenses: All monthly expenses necessary to operate the home; including taxes, insurance, maintenance, and utilities. …show more content…
The amount used for utility payments should be an average monthly amount for the past twelve months. If you cannot establish an accurate maintenance fee expense, use five percent of the monthly mortgage payment.
Category four- food: expenses: All grocery expenses; including paper goods and non- food products normally purchased at a grocery store. Things like milk, bread, and items purchased in addition to regular shopping trips. Do not forget to include eating out and daily lunches away from the home. If you do not know your actual food expenses keep a detailed spending record for thirty-five to forty-five days.
Category five- Automobile Expenses: including payments, insurance, gas, oil, maintenance, depreciation, etc. Depreciation is actually the money set asides to repair or replace the automobile. The minimum amount set aside should be sufficient to keep the car in decent repair and to replace it at least every four to five years.
If replacement funds are not available in the budget, the minimum allocation should be maintenance costs. Annual or semi-annual auto insurance payments should be set aside on a monthly basis. Thereby avoiding the crisis of a neglected expense. Category six- Insurance: includes all insurances such as health, life, and disability, not associated with home or auto. Category seven- Debts: includes all monthly payments required to meet debt obligations. Home mortgage and automobile payments are not included here. Category eight- Entertainment and Recreation: vacation savings, camping trips, club dues, sporting equipment, hobby expenses, and athletic events. Don’t forget little league expenses, booster clubs, and so on. Category nine- Clothing: the average amount spent on clothing divided by twelve. The minimum amount should be ten dollars per month per family member. Category ten- Saving: every family member should allocate something for savings. A savings account can provide funds for emergencies and is a key element in good planning and financial freedom. Category eleven- Medical expenses: Insurance deductibles, doctors’ bills, eye glasses, drugs, orthodontist visits, etc. use a yearly average divided by twelve to determine a monthly amount. Category
Net spendable income is that portion available for family spending. Some of your income does not belong to the family and therefore cannot be spent. For instances- category one: the tithes; since the term tithe means “a tenth,” (Burkett, 12) I will assume that you give ten percent of your total income to God. Category two: taxes; federal withholding, taxes must also be deducted from your gross income. Self-employed individuals must not forget to set aside money for quarterly payments on taxes. Beware of the tendency to treat unpaid tax money as windfall profit.
Other deductions: payroll deductions for insurance, credit union, savings or debt payments, bonds, stock programs, retirement, and unions. These can be handled in either of two ways. One: treat them as a deduction from gross income the same way as the income taxes. Two: include the in spendable income and deduct then from the proper category. This is preferred because it provides a more accurate picture of where the money is being spent. d) Net spendable income equals gross income minus tithe and minus taxes. e) How is net spendable income being spent? Category three- Housing expenses: All monthly expenses necessary to operate the home; including taxes, insurance, maintenance, and utilities. …show more content…
The amount used for utility payments should be an average monthly amount for the past twelve months. If you cannot establish an accurate maintenance fee expense, use five percent of the monthly mortgage payment.
Category four- food: expenses: All grocery expenses; including paper goods and non- food products normally purchased at a grocery store. Things like milk, bread, and items purchased in addition to regular shopping trips. Do not forget to include eating out and daily lunches away from the home. If you do not know your actual food expenses keep a detailed spending record for thirty-five to forty-five days.
Category five- Automobile Expenses: including payments, insurance, gas, oil, maintenance, depreciation, etc. Depreciation is actually the money set asides to repair or replace the automobile. The minimum amount set aside should be sufficient to keep the car in decent repair and to replace it at least every four to five years.
If replacement funds are not available in the budget, the minimum allocation should be maintenance costs. Annual or semi-annual auto insurance payments should be set aside on a monthly basis. Thereby avoiding the crisis of a neglected expense. Category six- Insurance: includes all insurances such as health, life, and disability, not associated with home or auto. Category seven- Debts: includes all monthly payments required to meet debt obligations. Home mortgage and automobile payments are not included here. Category eight- Entertainment and Recreation: vacation savings, camping trips, club dues, sporting equipment, hobby expenses, and athletic events. Don’t forget little league expenses, booster clubs, and so on. Category nine- Clothing: the average amount spent on clothing divided by twelve. The minimum amount should be ten dollars per month per family member. Category ten- Saving: every family member should allocate something for savings. A savings account can provide funds for emergencies and is a key element in good planning and financial freedom. Category eleven- Medical expenses: Insurance deductibles, doctors’ bills, eye glasses, drugs, orthodontist visits, etc. use a yearly average divided by twelve to determine a monthly amount. Category