What is income?

Income is money that you receive, whether earned, gifted, or loaned to you. Income may be a lump sum, or you may receive it regularly through a job or allowance.

For planning purposes, think of income on a monthly basis. For example, if you receive a financial aid disbursement of $1,200 to use over a three-month period, think of it as $400 of income per month.

What are expenses?

An expense is the cost of something. Think of your expenses in categories:

  • fixed needs are necessary expenses that stay the same each month (i.e. rent, loan repayment)
  • variable needs are necessary expenses that vary from month to month (i.e. groceries, transportation)
  • wants are optional expenses (i.e. entertainment, eating out)