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Determine Your Monthly Net Income

This is easy!

If you work 20 hours per month at $8 an hour, your monthly income is $160 per month. Or is it? Remember, you have to pay taxes or for your portion of any company-sponsored benefits, like health insurance or a 401(k). Those costs come out of your paycheck before you ever see it. So, take this into consideration to determine what money you can count on actually coming in every paycheck - also known as your net income.

It's important to avoid counting overtime or other potential income of which you are not certain. If these funds come in, you can adjust. However, for the sake of realistic planning, it's smart to only count income you know you will receive.

It's important to double-check this calculation of your monthly net income regularly to ensure it is always up to date.

At this point, it's a good idea to get all of your paperwork organized. Find a folder, a drawer or even a digital file to make your Money Management file. You will always have what you need to easily review your resources and your goals. Begin this simple process now.

Check out this sample pay stub to learn more about earnings, withholdings and deductions you may see on your pay stub.

Pay Stub

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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.