Pop Quiz

1.      What is current net income per month? An average will do it fluctuates.

2.      What is the interest on all of your credit cards and line of credit?

3.      When will your mortgage be paid off in full, if you have one?

4.      How much disposable income do you have?

So how did you do? Could you answer them all? What is the benefit of knowing the answers to  these question? These are at the core of understanding you financial situation. You need to know how much you make and what you owe before you can start to make any headway with your money.

Your net income is everything that is left after all of the deductions are taken off of your pay. This will include such things as, EI, CPP, taxes; in some cases this may include health benefit contributions, pension plan contributions, stock options, and donations. Take a look at you pay stub.  There are other deductions but these are the most common. If you work as a contractor none of these will be deducted and it is recommended that you set aside 20% of each pay cheque to cover the basics. If you are self-employed the same rule applies.

Knowing your net income will help you determine if you are living within your means. You need to strive to not spend more that you earn.

If you do not know the answer to these question now is your chance to learn. I will answer the next 3 question in the next 3 blogs.

??????????????????????????????????