Net Income
Net income is the amount of money that is left after paying taxes.
Once the net income has been determined, this figure should be entered and clearly marked as the net income of the person or persons who will be responsible for the household. If you are using a pre-defined budget sheet or a computer program to accomplish this task, there will be a slot specifically for the total amount of the net income. While this may seem to make the process easier for some people, it is not really necessary and will only take away from your budget rather than helping it any.
Keeping the amount of the net income in mind and noting it plainly on your budget will help you to more fully understand either your financial limitations or freedoms. The budget is not dependant on how much you owe or do not owe and it will not be an exact match each and every month but it should give you a relatively clear picture of your overall financial situation.
Please note that the net income is not the amount of money that is left over after paying the bills but the actual income which is put into the hands of the wage earners involved. Whether it is from a paycheck, an inheritance or any other source, no matter where it comes from, it is the amount of money that is left only after paying relevant taxes.
