Incomes

The money that is deposited into a budget space's checking account comes mainly from one or more income sources. When and how much is expected to be deposited from each predictable income is calculated by A Real Budget using the descriptive information that you provide.

• The income type and duration.
• How check amounts vary.
• The net pay amount (how much, after deductions, is deposited in the budget space's checking account).
• When pay periods end (the last day to be included in the next paycheck).
• When paydays happen after each pay period.

When and how much is expected from unpredictable incomes is entered by you as future payday dates and paycheck amounts become known.

Income types

There are three types of income.

• Active (earned) - Money earned from working that requires your time. You actively work and you are paid for it. Examples are salary, wages, bonuses, commissions, contract work.
• Portfolio (unpredictable) - Money from selling an investment for more than what you paid (capital gains). Examples are stocks, bonds, mutual funds, interest, buying/selling real estate or other assets such as automobiles.
• Passive (inactive) - Money generated from assets you own where you are not actively working. Examples are rental income, business income (only if you are not required to be there), creating/selling intellectual property.

Income duration

Each income has a lifespan that defines how long the income is expected to last.

• For the foreseeable future - there is currently no end to when or how many checks will be received
• A set number of times - a known number of checks will be received
• Until a date - checks will no longer be received on or after a given date

How check amounts vary

Jobs are typically categorized by how a person is paid.

• Salaried - a person is paid a fixed amount (salary) regardless of how many hours they work each in a pay period
• Hourly - the gross amount of each paycheck (before deductions) is the number of hours worked each week times an hourly wage
• Unpredictable - the amount earned depends on how often a task is accomplished such as selling real estate, selling cars, or spending billable hours working with a client

For A Real Budget to accurately predict when and how much is expected to be received from an income over the coming months, these typical job categories are adjusted slightly by thinking in terms of the paycheck amounts expected from an income as:

• always the same, or nearly the same,
• based on time worked, or
• unpredictable

This slight adjustment in how to describe income paycheck amounts allows for hybrid paydays such as a salaried income for which each paycheck is not the same because each paycheck amount depends on the hours worked during each pay period.

For example, a professional works each Tuesday and Thursday. The salary is $400 per day. Pay periods end on the 1st and 15th of each month which means the person's paycheck amount is not always the same. Each paycheck amount depends on how many Tuesdays and Thursdays there were in the pay period. To accurately predict the paycheck amounts for this hybrid income, in A Real Budget the salaried income is based on a gross hourly wage of $50 per hour ($400 daily salary divided by 8 hours paid per workday). The net hourly pay used by the program can be calculated by dividing a paycheck amount by the number of hours worked in the pay period. This calculation could look like:

Net paycheck amount (after deductions): $1,312
Number of Tuesdays and Thursdays in the pay period: 4
Number of hours paid in the pay period: 4 * 8 = 32

Net hourly pay: $1,312 / 32 = $41