Accounting for income
The first step in developing a monthly budget is to collect accurate numbers on all the sources of income you receive every month. These sources can include:
- Retirement plan distributions — including 401(k), 403(b) and 457 plans
- Social Security benefits
- Pension plan distributions
- Individual Retirement Account (IRA), simplified employee pension (SEP) and Keogh withdrawals
- Annuity payments
- Personal savings withdrawals — including savings accounts, money market accounts, certificates of deposit1 and brokerage accounts
- Part-time work salary
- Rent or royalties
1 Certificates of deposit are insured by the FDIC for up to $250,000 per depositor and offer a fixed rate of return, whereas both the principal and yield of bonds and stocks will fluctuate with market conditions.
