As much as I love spreadsheets and tracking my finances, I realized recently that one thing I don’t know is how much money I bring in every month.
Sure, I know what my paycheck is and if I have any alternative income that month (blog checks, Ebates cash back, etc), that gets tracked in detail, but I don’t ever think about my gross salary or interest on investments and savings accounts. I think this is because I try to not think about my savings accounts too much. I put away a set amount of money each month and let it grow. Sure, when I update my net worth spreadsheet, I can see these increases, but I’ve never sat down and figured it all out.
I started thinking about it while reading about Roth IRAs and the difference between AGI and MAGI, and realized that I don’t have any sort of idea what my AGI is. It’s my gross salary, plus all those extras, minus a few things. I should at least have some clue of these numbers, right?
So I sat down and put together a spreadsheet. It’s very simple and tracks my gross salary, what I contribute to my pre-tax retirement account, health insurance payment, how much tax I’m paying, and how much I’m earning through blogging and investments (including interest on savings).
I was pleasantly surprised by many of the numbers, and distraught by others (such as the amount of tax I pay). I think tracking this will be helpful as I start to look at my 2009 taxes, plus I think it’s just good to be aware of what money is coming in and where it’s coming from. Just because my investments are “set it and forget it” doesn’t mean I shouldn’t still be aware of them, especially in non-retirement accounts where I’m responsible for paying taxes on any gains!
I’m sure some of you hate spreadsheets and are cringing at this idea. But it only took me a few minutes to track everything from the beginning of the year and I am very pleased with the results.
Do you know exactly how much money you bring in every month, or do you focus more on your paycheck and your spending money?
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.