Your expenditures account for only part of your spend plan. You also need to determine your monthly income. For many of you, this may be as simple as computing your monthly salary. For others, you may have hourly wages, alimony or child support, sales commissions, etc. For the purposes of a workable monthly plan, it is important not to overestimate how much you earn (or will earn). It is more important to know how much income you can definitely count on receiving each month. Occasional income, such as overtime pay, bonuses and commissions, can better be applied to occasional expenses, such as vacation or Christmas, or emergency expenses that always seem to occur when you can least afford them.

On a blank sheet of paper, or on the expense record that you printed, list the gross income (before taxes and other deductions) that you can count on each month, such as salary, non-overtime wages, alimony and child support, pension or retirement income, etc.

If you don't receive the same amount each month, consider averaging your income based on the past few months, but again don't overestimate your income. If you get paid every week, use the amount you receive every four paychecks (this will leave another four paychecks a year for occasional expenses). If you get paid twice a month, then just add the two paycheck amounts together. If you get paid every two weeks, include the totals from just two paychecks (leaving an extra two checks a year for occasional expenses).

When you are done, total up all the income amounts and transfer them to your program or your worksheet. This is your total average monthly gross income that you can count on.

Finally, determine the deductions from your paycheck based on your defined income. For example, if you get paid every week, hopefully you only considered four paychecks a month as your income. Therefore, calculate how much is withheld from those four paychecks a month to cover deductions such as taxes, health insurance premiums, life and disability insurance premiums, 401(k) contributions, etc. Enter these amounts on the dates that you received your paychecks.

Step 4 - Determine and briefly analyze your cash flow result