Differet types of incomes

 

Salary – This is money you earn from a job. Your annual salary is usually set out in a contract and paid either weekly, fortnightly or monthly. Usually the amount you earn is the same and you won’t earn more for extra hours worked.

 

Commission – Commission is where you earn money upon completion of a task. This is common in sales roles where you might earn a set amount of money for each sale you make or you might earn a percentage of a sale price for your work. Commission is based on results rather than time worked.

 

Interest Income – Interest is something that your money earns for you. Interest is usually paid on money that you have deposited into your bank account. Interest varies between account types and is usually expressed as a percentage per year (or per annum).

 

Selling something you have made or created or that belongs to you – Whether you are a self- employed artist or a gifted carpenter, this income is earned by you selling the end product of your skills, such as a beautifully crafted, handmade table.

 

Income from investments – Investments like property, shares and even art can all earn money for you either through an increase in their value (this is called capital growth) or in the case of shares, by paying you an amount of money per share you own, which is called a dividend.

 

Gifts  – This is money given to you in the form of a cash present. Special occasions such as birthdays can be an unexpected, and very pleasing, source of income.

 

Allowance/pocket money – This is money usually given to younger children, learners and students by their parents or guardians on a regular basis for their own personal use. Those who receive an income in this way may, or may not have to do any jobs (or chores) in return for this money.

 

Whichever way you earn your income, remember that this is only a small part of the journey to ensure your financial wellness. Getting and earning money is only part of the picture. What you do with it can be a game changer.

Fixed expenses – A fixed expense just means an expense you expect will stay the same, or close to it, over time. When you sit down to make your monthly budget, you don’t have to guess how much you will pay toward fixed expenses. You can simply carry over those amounts from last month’s budget.

 

Variable expenses – Variable expenses are the opposite of fixed expenses. A variable expense may not have to be paid from month to month, but the amount you pay in any given month could be different from previous payments or ones you will make in the future.

 

Irregular expenses – Irregular expenses are costs that come up throughout the year unexpectedly. It is impossible to know when a school tour or medical emergency may occur and what events such as these may cost. That is why it is important to budget whatever you can afford to set aside for these unplanned incidents and not be tempted to use this money if it feels like it is just “sitting there”. It takes discipline but you cannot afford to be caught unprepared and have to rely on credit or loans in instances such as these.

• Don’t spend what you have not budgeted for.

• Use public transport such as taxis, buses and trains or join a car pool to share the expenses.

• Reduce your electricity usage and unplug electrical devices that are not in use.

• Reduce your electricity usage and unplug electrical devices that are not in use.

• Look for inexpensive entertainment options.

• Cancel paid memberships you no longer use.

• Cancel magazine subscriptions

• Pack your own lunch instead of buying meals at work. Leftover food from dinner can also be a great lunch and save you money.

• Limit how often you buy takeaways and eat out.

• Look out for specials and buy no name brands.

• Buy long-lasting items with extended expiry dates in bulk.

• Consider starting your own vegetable garden.

• Set a weekly airtime and data budget and keep to it.

• Move to less expensive accommodation if your current rent or bond repayments are more than you can afford.

• If you do not want to use public transport consider purchasing a more economical vehicle. Take into account your fuel consumption, cost of repairs, etc.

Disclaimer: This information serves as a recommendation and should not be considered as advice. It is provided to assist you on your journey to financial wellbeing. Please speak to an authorised financial advisor in your personal capacity to further explore suggested products in greater detail

BUDGETING.

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