Welcome to the Inside Track of Money & Wealth 30-Day Challenge
Chapter 1 — Make More, Spend More (example challenge)
- Complete the household budget with a larger annual gross salary of $48,000 per year, and $36,000 net, which is $3000 per month. Using the same ‘needs’ and ‘wants’ from the chapter 1 exercise, begin your budget with $3000. Once you complete your new budget answer the following questions.
- Did you spend more money?
- Where did the extra money go?
- Most people make the mistake of spending more, when they make more; more stuff, bigger cars, more clothes, etc. This creates very popular and very poor spending habits.
If you maintained your life successfully on $36,000 gross per year then any additional money should be budget into saving and/or investing—develop your wealth-building machine.
Additional info: Below is an example of a paycheck stub, where you can see the Gross earnings #18 and Net earnings #17
1) Employer Name
2) Employer Address
3) Check Number
4) Employee Name & Identification Number
5) Social Security Number
6) Marital Status
7) Special Note from Employer
8) Pay Period Work Dates
9) Date Received Paycheck
10) Total Amount Earned from Pay Period
11) Description of Deductions from Paycheck
12) Current Amount of Deductions from Paycheck
13) Year-To-Date Amounts for Deductions from Entire Year
14) Summary of Current Deductions from Paycheck
15) Miscellaneous – Vacation Time & 401K Totals
16) Summary of Various Types of Earnings Earned – Regular Work Hours,
Overtime, Vacation, Sick Time & Disability
Deductions are the money subtracted from the Gross Earnings made for that pay period. Some deductions are a fixed amount and some are a percentage of your earnings. Also, not all deductions are mandatory; some are optional.
Here are some examples of various deductions
| Mandatory Deductions | Optional Deductions |
| Federal Income Tax | Medical/Dental Insurance |
| Social Security Tax | *401K |
| FICA Tax | Checking Account |
| State Income Tax | Life Insurance |
*more on 401k later in our Financial Fitness book
One item needs an explanation in detail. It never fails that when someone looks at his or her first paycheck this famous question will usually be:
“Who is FICA and why are they taking so much of my money?”
To keep it simple, depending on how you decide to earn a living, the government will take this deduction from your pay. That’s right, if you work in the U.S., you pay taxes, but remember — FICA accepts your contribution for the underprivileged. Here is the breakdown of the acronym FICA.
F is for Federal as in it will always be there on your checks
I is for Insurance to let you know it does serve a benefit
C is for Contributions, which offers a thank you for your support
A is for Act meaning it is law and put into effect by a legal system
FICA is a federally enforced mandatory deduction taken from every employee in the United States. The employer holds this money for the Federal government on behalf of the employee. This is part of each employee’s financial obligation to the Federal government.
FYI: FICA was the result of the Social Security Act of 1935, proposed by President Franklin D. Roosevelt as a result of the Great Depression. The program began collecting taxes and paying benefits to the poor in 1937. In 1939, FICA was amended (revised) to include payment to widows and orphans of working spouses, as well as the elderly.
The better known programs funded by FICA all fall under one acronym: OASDI (Old Age, Survivor, Disability Insurance)
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