{"id":2157,"date":"2016-09-23T15:05:32","date_gmt":"2016-09-23T15:05:32","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/waymaker-collegesuccess\/?post_type=chapter&#038;p=2157"},"modified":"2024-05-01T18:48:33","modified_gmt":"2024-05-01T18:48:33","slug":"text-budgeting-strategies","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-collegesuccess-2\/chapter\/text-budgeting-strategies\/","title":{"raw":"Budgeting Strategies","rendered":"Budgeting Strategies"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\">Describe budgeting strategies and the pros and cons of budgeting<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Budget<\/h2>\r\n<p id=\"fs-idm213384880\">The term\u00a0<strong>budget<\/strong>\u00a0is unpleasant to some people because it just looks like work. But who will care more about your money than you do? We all want to know if we have enough money to pay our bills, travel, get an education, buy a car, etc. Technically, a\u00a0<span id=\"term53\" class=\"no-emphasis\" data-type=\"term\">budget<\/span>\u00a0is a specific financial plan for a specified time. Budgets have three elements: income, saving and investing, and expenses.<\/p>\r\n\r\n<div id=\"ch10fig07\" class=\"os-figure\">\r\n<div>\r\n\r\n[caption id=\"attachment_4739\" align=\"aligncenter\" width=\"877\"]<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5571\/2016\/09\/24042400\/budget.png\"><img class=\"wp-image-4739 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5571\/2016\/09\/24042400\/budget.png\" alt=\"When you receive income, you ask yourself &quot;Where to put my income?&quot; They two choices available are Savings &amp; Investing, and Expenses \" width=\"877\" height=\"829\" \/><\/a> A budget is a specific financial plan for a finite amount of time. For example, you can set a budget for your family for a year.[\/caption]\r\n\r\n<\/div>\r\n<h3 class=\"os-caption-container\">Income<\/h3>\r\n<\/div>\r\n<section id=\"fs-idm238894480\" data-depth=\"2\">\r\n<p id=\"fs-idm258701936\"><span id=\"term54\" class=\"no-emphasis\" data-type=\"term\">Income<\/span>\u00a0most often comes from our jobs in the form of a paper or electronic paycheck. When listing your income for your monthly budget, you should use your\u00a0<em data-effect=\"italics\">net pay<\/em>, also called your disposable income. It is the only money you can use to pay bills. If you currently have a job, look at the pay stub or statement. You will find\u00a0<em data-effect=\"italics\">gross pay<\/em>, then some money deducted for a variety of taxes, leaving a smaller amount\u2014your net pay. Sometimes you have the opportunity to have some other, optional deductions taken from your paycheck before you get your net pay. Examples of optional deductions include 401(k) or health insurance payments. You can change these amounts, but you should still use your net pay when considering your budget.<\/p>\r\n<p id=\"fs-idm249069792\">Some individuals receive disability income, social security income, investment income, alimony, child support, and other forms of payment on a regular basis. All of these go under income. During school, you may receive support from family that could be considered income. You may also receive scholarships, grants, or student loan money.<\/p>\r\n\r\n<\/section><section id=\"fs-idm215178528\" data-depth=\"2\">\r\n<h3 data-type=\"title\">Saving and Investing<\/h3>\r\n<p id=\"fs-idm236595216\">The first bill you should pay is to yourself. You owe yourself today and tomorrow. That means you should set aside a certain amount of money for savings and investments, before paying bills and making discretionary, or optional, purchases. Savings can be for an emergency fund or for short-term goals such as an education, a wedding, travel, or a car. Investing by putting your money into stocks, bonds, or real estate offers higher returns at a higher risk than money saved in a bank. Investments include retirement accounts that can be automatically funded with money deducted from your paycheck. Automatic payroll deductions are an effective way to save money before you can get your hands on it. Setting saving as a priority assures that you will work to make the payment to yourself as hard as you work to make your car or housing payment. The money you pay toward saving or investing will earn you back your money, plus some interest. Compare these investment earnings to the cost of buying an item on credit and paying your money plus interest to a creditor. Paying yourself first is a habit that pays off!<\/p>\r\n\r\n<blockquote>Pay yourself first! Put something in savings from every paycheck or gift.<\/blockquote>\r\n<\/section><section id=\"fs-idm228095584\" data-depth=\"2\">\r\n<div class=\"textbox tryit\">\r\n<h3>Try It<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/b0cc2de0-e48d-40ce-bcac-deb9402aac52\r\n\r\n<\/div>\r\n<h2 data-type=\"title\">Categorizing Expenses<\/h2>\r\n<p id=\"fs-idm260505552\">Expenses are categorized in two ways. One method separates them into fixed expenses and variable expenses. Rent, insurance costs, and utilities (power, water, gas, etc.) are fixed: they cost about the same every month and are predictable based on your arrangement with the provider. Variable expenses, on the other hand, change based on your priorities and available funds; they include groceries, restaurants, cell phone plans, gas, clothing, and so on. You have a good degree of control over your variable expenses. You can begin organizing your expenses by categorizing each one as either fixed or variable.<\/p>\r\n<p id=\"fs-idm215585600\">A second way to categorize expenses is to identify them as either needs or wants. Your needs come first: food, basic clothing, safe housing, medical care, and water. Your wants come afterward, if you can afford them while sticking to a savings plan. Wants may include meals at a restaurant, designer clothes, video games, other forms of entertainment, or a new car. After you identify an item as a need or want, you must exercise self-control to avoid caving to your desire for too many wants.<\/p>\r\n\r\n<\/section>Without a personal budget, most\u00a0people have a hard time\u00a0gauging how much money they spend and where their money goes. If you have ever gone to an ATM to withdraw money\u00a0and been surprised to discover how little you had\u00a0left in your account, this section is for you. It's also for anyone who wants to learn how to manage their money better and smarter\u2014which is an invaluable skill to have not only during the penny-pinching years of college but also later on in life.\r\n<div class=\"textbox exercises\">\r\n<h3>Categorize your Expenses<\/h3>\r\nList the last ten purchases you made, and place each of them in the category you think is correct (Fixed and Variable, or Need and Want).\r\n\r\n<\/div>\r\n\r\n[caption id=\"attachment_249\" align=\"alignright\" width=\"350\"]<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02024957\/10814794534_3635371523_z.jpg\"><img class=\"wp-image-249\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02024957\/10814794534_3635371523_z.jpg\" alt=\"people at a concession stand\" width=\"350\" height=\"233\" \/><\/a> Even though you might find the need to cut the number of times you go to the movies each month, effective budgets still factor in leisure activities.[\/caption]\r\n<h2>Budgeting Strategies<\/h2>\r\nEven if you're very conscientious about paying your bills on time and generally have frugal spending habits, creating and following\u00a0a budget can put you so much further ahead. In essence, a budget is a plan for how you want to spend money. It details how much money comes in each month and how much you've allocated for spending\u00a0on each thing. The virtue of a budget is that it puts you in control of financial decisions\u2014so you can avoid surprises at the ATM or at the end of the month. Let\u2019s look at some strategies for creating a budget:\r\n<ul>\r\n \t<li><strong>Be realistic<\/strong>: People are often intimidated by budgets because they\u2019re afraid the plans will be too strict or force them to cut back\u00a0too much. Though\u00a0a budget may\u00a0reveal that you indeed spend a lot of money\u00a0on clothes, that's okay\u2014it may just also need to show that you spend very little on restaurants and eating out to make up for it. Again, it's about making choices and being realistic.<\/li>\r\n \t<li><strong>Choose a timeline<\/strong>: Creating a budget for a fixed period of time will help you monitor whether you\u2019re meeting your financial goals. The timeline you choose is up to you and your goals. For example, you\u00a0might create a monthly budget to monitor how you spend your paycheck every month.<\/li>\r\n \t<li><strong>Add financial\u00a0padding<\/strong>: Even if you feel like your\u00a0list of financial obligations\u00a0is already long, try to set aside a certain amount each month for a rainy day fund to pay for unforeseen\u00a0expenses and emergencies, like car repair, lost textbooks, etc.<\/li>\r\n \t<li><strong>Make adjustments as needed<\/strong>: While sticking to your budget is important, there\u2019s nothing wrong with revisiting and adjusting your original targets. For example, if you find that you are actually spending $50 more per month on groceries than you intended\u00a0(even after shopping for sale items), you may decide to save that money elsewhere in your budget next month\u2014on entertainment, for example.<\/li>\r\n<\/ul>\r\n<h2>Pros and Cons of Budgeting<\/h2>\r\nWhile budgeting can be a useful financial tool, it may\u00a0not be for everybody. Some people may\u00a0feel more confident by\u00a0balancing their checkbook to see how much they have at any given time. Still, many argue that budgeting helps people stay on track and avoid overspending on wants such as restaurant food, clothes, and entertainment, so they always have enough money for needs, such as\u00a0rent\/mortgage, utilities, and food. The following lists summarize the\u00a0advantages\u00a0and disadvantages of budgeting.\r\n<h3>Budgeting Pros<\/h3>\r\n<ul>\r\n \t<li><strong>Provides a realistic view of personal finances<\/strong>: A personal budget provides an honest\u00a0snapshot of how much money you make and how much you can spend.\u00a0It can help you avoid deceptive financial thinking, such as believing\u00a0that you're flush right after pay day when you really need to save that money for an upcoming bill.<\/li>\r\n \t<li><strong>Helps you avoid excess spending<\/strong>: Because a budget gives\u00a0you insight into the total picture of your income and expenses, you can make realistic decisions about spending. As above, a budget can help you avoid having a faulty\u00a0sense of your financial resources and\u00a0remind you that even if you just got paid, most, if not all, of your check may\u00a0need to go toward fixed expenses.<\/li>\r\n \t<li><strong>Assists in goal setting<\/strong>: Since you get to decide how to allocate\u00a0your money, a budget can help you set goals. For example, if you create a yearly budget, you could plan and account\u00a0for an upcoming\u00a0family trip and start saving money for it in advance without worrying about having the money at\u00a0the last minute.<\/li>\r\n<\/ul>\r\n<h3>Budgeting Cons<\/h3>\r\n<ul>\r\n \t<li><strong>Budgets take energy<\/strong>: Planning a budget takes dedication. Since most students\u00a0lead busy lives and are balancing different demands\u00a0like work, school, and time with family and friends, it can\u00a0be easy to slip up. For example, if you have a stressful week at work or school, you might overspend while going out with friends and forget how much you budgeted for leisure activities.<\/li>\r\n \t<li><strong>Results take time<\/strong>: Since most budgets cover\u00a0a time period of a month, year, or even longer, people may\u00a0become frustrated waiting to see if their financial situation is better than it was before. Frustration can lead people to abandon their budget and go back to overspending or neglecting to save.<\/li>\r\n \t<li><strong>Budgets may\u00a0be strict<\/strong>: Remember that one of the important strategies for creating a successful budget is earmarking money for treats and extras such as entertainment.\u00a0However, in an effort to become more financially disciplined, some people make\u00a0budgets that are too restrictive and unrealistic. Severe budgets can\u00a0backfire and lead to\u00a0overspending in one area or abandoning the budget altogether.<\/li>\r\n<\/ul>\r\n<div class=\"textbox learning-objectives\">\r\n<h3>glossary<\/h3>\r\n<strong><span id=\"term53\" class=\"no-emphasis\" data-type=\"term\">budget:<\/span><\/strong>\u00a0a specific financial plan for a specified time, consisting of three elements: income, saving and investing, and expenses\r\n\r\n<strong>gross pay:<\/strong> the larger paycheck amount that is listed on your pay stub prior to deductions for taxes\r\n\r\n<strong>net pay:<\/strong> the smaller paycheck amount that remains after taxes and other deductions; this is the number you should use to plan a budget\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li style=\"font-weight: 400;\">Describe budgeting strategies and the pros and cons of budgeting<\/li>\n<\/ul>\n<\/div>\n<h2>Budget<\/h2>\n<p id=\"fs-idm213384880\">The term\u00a0<strong>budget<\/strong>\u00a0is unpleasant to some people because it just looks like work. But who will care more about your money than you do? We all want to know if we have enough money to pay our bills, travel, get an education, buy a car, etc. Technically, a\u00a0<span id=\"term53\" class=\"no-emphasis\" data-type=\"term\">budget<\/span>\u00a0is a specific financial plan for a specified time. Budgets have three elements: income, saving and investing, and expenses.<\/p>\n<div id=\"ch10fig07\" class=\"os-figure\">\n<div>\n<div id=\"attachment_4739\" style=\"width: 887px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5571\/2016\/09\/24042400\/budget.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-4739\" class=\"wp-image-4739 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5571\/2016\/09\/24042400\/budget.png\" alt=\"When you receive income, you ask yourself &quot;Where to put my income?&quot; They two choices available are Savings &amp; Investing, and Expenses\" width=\"877\" height=\"829\" \/><\/a><\/p>\n<p id=\"caption-attachment-4739\" class=\"wp-caption-text\">A budget is a specific financial plan for a finite amount of time. For example, you can set a budget for your family for a year.<\/p>\n<\/div>\n<\/div>\n<h3 class=\"os-caption-container\">Income<\/h3>\n<\/div>\n<section id=\"fs-idm238894480\" data-depth=\"2\">\n<p id=\"fs-idm258701936\"><span id=\"term54\" class=\"no-emphasis\" data-type=\"term\">Income<\/span>\u00a0most often comes from our jobs in the form of a paper or electronic paycheck. When listing your income for your monthly budget, you should use your\u00a0<em data-effect=\"italics\">net pay<\/em>, also called your disposable income. It is the only money you can use to pay bills. If you currently have a job, look at the pay stub or statement. You will find\u00a0<em data-effect=\"italics\">gross pay<\/em>, then some money deducted for a variety of taxes, leaving a smaller amount\u2014your net pay. Sometimes you have the opportunity to have some other, optional deductions taken from your paycheck before you get your net pay. Examples of optional deductions include 401(k) or health insurance payments. You can change these amounts, but you should still use your net pay when considering your budget.<\/p>\n<p id=\"fs-idm249069792\">Some individuals receive disability income, social security income, investment income, alimony, child support, and other forms of payment on a regular basis. All of these go under income. During school, you may receive support from family that could be considered income. You may also receive scholarships, grants, or student loan money.<\/p>\n<\/section>\n<section id=\"fs-idm215178528\" data-depth=\"2\">\n<h3 data-type=\"title\">Saving and Investing<\/h3>\n<p id=\"fs-idm236595216\">The first bill you should pay is to yourself. You owe yourself today and tomorrow. That means you should set aside a certain amount of money for savings and investments, before paying bills and making discretionary, or optional, purchases. Savings can be for an emergency fund or for short-term goals such as an education, a wedding, travel, or a car. Investing by putting your money into stocks, bonds, or real estate offers higher returns at a higher risk than money saved in a bank. Investments include retirement accounts that can be automatically funded with money deducted from your paycheck. Automatic payroll deductions are an effective way to save money before you can get your hands on it. Setting saving as a priority assures that you will work to make the payment to yourself as hard as you work to make your car or housing payment. The money you pay toward saving or investing will earn you back your money, plus some interest. Compare these investment earnings to the cost of buying an item on credit and paying your money plus interest to a creditor. Paying yourself first is a habit that pays off!<\/p>\n<blockquote><p>Pay yourself first! Put something in savings from every paycheck or gift.<\/p><\/blockquote>\n<\/section>\n<section id=\"fs-idm228095584\" data-depth=\"2\">\n<div class=\"textbox tryit\">\n<h3>Try It<\/h3>\n<p>\t<iframe id=\"assessment_practice_b0cc2de0-e48d-40ce-bcac-deb9402aac52\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/b0cc2de0-e48d-40ce-bcac-deb9402aac52?iframe_resize_id=assessment_practice_id_b0cc2de0-e48d-40ce-bcac-deb9402aac52\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<h2 data-type=\"title\">Categorizing Expenses<\/h2>\n<p id=\"fs-idm260505552\">Expenses are categorized in two ways. One method separates them into fixed expenses and variable expenses. Rent, insurance costs, and utilities (power, water, gas, etc.) are fixed: they cost about the same every month and are predictable based on your arrangement with the provider. Variable expenses, on the other hand, change based on your priorities and available funds; they include groceries, restaurants, cell phone plans, gas, clothing, and so on. You have a good degree of control over your variable expenses. You can begin organizing your expenses by categorizing each one as either fixed or variable.<\/p>\n<p id=\"fs-idm215585600\">A second way to categorize expenses is to identify them as either needs or wants. Your needs come first: food, basic clothing, safe housing, medical care, and water. Your wants come afterward, if you can afford them while sticking to a savings plan. Wants may include meals at a restaurant, designer clothes, video games, other forms of entertainment, or a new car. After you identify an item as a need or want, you must exercise self-control to avoid caving to your desire for too many wants.<\/p>\n<\/section>\n<p>Without a personal budget, most\u00a0people have a hard time\u00a0gauging how much money they spend and where their money goes. If you have ever gone to an ATM to withdraw money\u00a0and been surprised to discover how little you had\u00a0left in your account, this section is for you. It&#8217;s also for anyone who wants to learn how to manage their money better and smarter\u2014which is an invaluable skill to have not only during the penny-pinching years of college but also later on in life.<\/p>\n<div class=\"textbox exercises\">\n<h3>Categorize your Expenses<\/h3>\n<p>List the last ten purchases you made, and place each of them in the category you think is correct (Fixed and Variable, or Need and Want).<\/p>\n<\/div>\n<div id=\"attachment_249\" style=\"width: 360px\" class=\"wp-caption alignright\"><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02024957\/10814794534_3635371523_z.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-249\" class=\"wp-image-249\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1110\/2016\/02\/02024957\/10814794534_3635371523_z.jpg\" alt=\"people at a concession stand\" width=\"350\" height=\"233\" \/><\/a><\/p>\n<p id=\"caption-attachment-249\" class=\"wp-caption-text\">Even though you might find the need to cut the number of times you go to the movies each month, effective budgets still factor in leisure activities.<\/p>\n<\/div>\n<h2>Budgeting Strategies<\/h2>\n<p>Even if you&#8217;re very conscientious about paying your bills on time and generally have frugal spending habits, creating and following\u00a0a budget can put you so much further ahead. In essence, a budget is a plan for how you want to spend money. It details how much money comes in each month and how much you&#8217;ve allocated for spending\u00a0on each thing. The virtue of a budget is that it puts you in control of financial decisions\u2014so you can avoid surprises at the ATM or at the end of the month. Let\u2019s look at some strategies for creating a budget:<\/p>\n<ul>\n<li><strong>Be realistic<\/strong>: People are often intimidated by budgets because they\u2019re afraid the plans will be too strict or force them to cut back\u00a0too much. Though\u00a0a budget may\u00a0reveal that you indeed spend a lot of money\u00a0on clothes, that&#8217;s okay\u2014it may just also need to show that you spend very little on restaurants and eating out to make up for it. Again, it&#8217;s about making choices and being realistic.<\/li>\n<li><strong>Choose a timeline<\/strong>: Creating a budget for a fixed period of time will help you monitor whether you\u2019re meeting your financial goals. The timeline you choose is up to you and your goals. For example, you\u00a0might create a monthly budget to monitor how you spend your paycheck every month.<\/li>\n<li><strong>Add financial\u00a0padding<\/strong>: Even if you feel like your\u00a0list of financial obligations\u00a0is already long, try to set aside a certain amount each month for a rainy day fund to pay for unforeseen\u00a0expenses and emergencies, like car repair, lost textbooks, etc.<\/li>\n<li><strong>Make adjustments as needed<\/strong>: While sticking to your budget is important, there\u2019s nothing wrong with revisiting and adjusting your original targets. For example, if you find that you are actually spending $50 more per month on groceries than you intended\u00a0(even after shopping for sale items), you may decide to save that money elsewhere in your budget next month\u2014on entertainment, for example.<\/li>\n<\/ul>\n<h2>Pros and Cons of Budgeting<\/h2>\n<p>While budgeting can be a useful financial tool, it may\u00a0not be for everybody. Some people may\u00a0feel more confident by\u00a0balancing their checkbook to see how much they have at any given time. Still, many argue that budgeting helps people stay on track and avoid overspending on wants such as restaurant food, clothes, and entertainment, so they always have enough money for needs, such as\u00a0rent\/mortgage, utilities, and food. The following lists summarize the\u00a0advantages\u00a0and disadvantages of budgeting.<\/p>\n<h3>Budgeting Pros<\/h3>\n<ul>\n<li><strong>Provides a realistic view of personal finances<\/strong>: A personal budget provides an honest\u00a0snapshot of how much money you make and how much you can spend.\u00a0It can help you avoid deceptive financial thinking, such as believing\u00a0that you&#8217;re flush right after pay day when you really need to save that money for an upcoming bill.<\/li>\n<li><strong>Helps you avoid excess spending<\/strong>: Because a budget gives\u00a0you insight into the total picture of your income and expenses, you can make realistic decisions about spending. As above, a budget can help you avoid having a faulty\u00a0sense of your financial resources and\u00a0remind you that even if you just got paid, most, if not all, of your check may\u00a0need to go toward fixed expenses.<\/li>\n<li><strong>Assists in goal setting<\/strong>: Since you get to decide how to allocate\u00a0your money, a budget can help you set goals. For example, if you create a yearly budget, you could plan and account\u00a0for an upcoming\u00a0family trip and start saving money for it in advance without worrying about having the money at\u00a0the last minute.<\/li>\n<\/ul>\n<h3>Budgeting Cons<\/h3>\n<ul>\n<li><strong>Budgets take energy<\/strong>: Planning a budget takes dedication. Since most students\u00a0lead busy lives and are balancing different demands\u00a0like work, school, and time with family and friends, it can\u00a0be easy to slip up. For example, if you have a stressful week at work or school, you might overspend while going out with friends and forget how much you budgeted for leisure activities.<\/li>\n<li><strong>Results take time<\/strong>: Since most budgets cover\u00a0a time period of a month, year, or even longer, people may\u00a0become frustrated waiting to see if their financial situation is better than it was before. Frustration can lead people to abandon their budget and go back to overspending or neglecting to save.<\/li>\n<li><strong>Budgets may\u00a0be strict<\/strong>: Remember that one of the important strategies for creating a successful budget is earmarking money for treats and extras such as entertainment.\u00a0However, in an effort to become more financially disciplined, some people make\u00a0budgets that are too restrictive and unrealistic. Severe budgets can\u00a0backfire and lead to\u00a0overspending in one area or abandoning the budget altogether.<\/li>\n<\/ul>\n<div class=\"textbox learning-objectives\">\n<h3>glossary<\/h3>\n<p><strong><span id=\"term53\" class=\"no-emphasis\" data-type=\"term\">budget:<\/span><\/strong>\u00a0a specific financial plan for a specified time, consisting of three elements: income, saving and investing, and expenses<\/p>\n<p><strong>gross pay:<\/strong> the larger paycheck amount that is listed on your pay stub prior to deductions for taxes<\/p>\n<p><strong>net pay:<\/strong> the smaller paycheck amount that remains after taxes and other deductions; this is the number you should use to plan a budget<\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-2157\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>College Success. <strong>Authored by<\/strong>: Jolene Carr. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Image of movie theater concessions. <strong>Authored by<\/strong>: Susan Sermoneta. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/flic.kr\/p\/htEDCJ\">https:\/\/flic.kr\/p\/htEDCJ<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/\">CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives <\/a><\/em><\/li><li>College Success. <strong>Authored by<\/strong>: Amy Baldwin. <strong>Provided by<\/strong>: OpenStax. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/openstax.org\/books\/college-success\/pages\/10-2-savings-expenses-and-budgeting\">https:\/\/openstax.org\/books\/college-success\/pages\/10-2-savings-expenses-and-budgeting<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":19,"menu_order":13,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"College Success\",\"author\":\"Jolene Carr\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Image of movie theater concessions\",\"author\":\"Susan Sermoneta\",\"organization\":\"\",\"url\":\"https:\/\/flic.kr\/p\/htEDCJ\",\"project\":\"\",\"license\":\"cc-by-nc-nd\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"College Success\",\"author\":\"Amy Baldwin\",\"organization\":\"OpenStax\",\"url\":\"https:\/\/openstax.org\/books\/college-success\/pages\/10-2-savings-expenses-and-budgeting\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"968a1d91-1d6d-4d7f-a8ed-07037add8177, 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