Net Income (Budgeting)
BudgetingGlossary term
Definition
Your take-home pay after all taxes, deductions, and withholdings are subtracted from gross income. This is the actual amount available for spending, saving, and investing, and should be the basis of your monthly budget.
Related terms
- Gross Income (Budgeting)The total amount of money earned before any taxes or deductions are taken out. Understanding your gross income is the starting point for budgeting, but net income is what you actually have available to spend and save.
- BudgetA financial plan that outlines expected income and expenses over a specific period. Creating and following a budget is essential for managing money and achieving financial goals.
- Disposable IncomeThe amount of money left after paying all essential living expenses and taxes. This is the money available for discretionary spending, additional saving, or investing. Growing disposable income is key to building wealth.
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