Personal Finance Basics: Understanding Your Income and Provision


What is the single most powerful tool you have to care for your family, build net worth, crush debt and live generously?  It’s your income.  People get income from many different sources  whether it is a job, business profit, investment earning, rental payments, social security benefits, or retirement accounts, God provides for us.  When we manage our income wisely we worship God and honor him as our provider.   

The Bible instructs us many times to glorify God with our work.  

Whatever you do, do your work heartily, as for the Lord rather than for men; knowing that from
the Lord you will receive the reward of the inheritance. It is the Lord Christ whom you serve

(Colossians 3:23-24).


We are also reminded that in whatever circumstance that we find ourselves, if we are seeking His will we can do all things through His strength.  

I know how to be brought low, and I know how to abound. In any and every circumstance, I have learned the secret of facing plenty and hunger, abundance and need. I can do all things through him who strengthens me. Philippians 4: 12-13

Great Links for Further Study:


Defining the Essentials: Gross vs. Net

It's impossible to budget if you don't know the exact amount you have to work with.

Gross Income (The Big Number)

Remember when you got your first job.  You were looking forward to that first paycheck, you knew that you were making $10 an hour and you worked 20 hours.  So you were going to get $200 dollars.  Already spent the money in your mind.  

Your Gross Income is the total amount of money you earn before any taxes, deductions, or benefits are taken out. This is the amount listed on your offer of employment.  This is the number that many of us want to negotiate to get the highest amount among our friend group. 

Net Income (The Budget Number)

But when you received that first check, you didn’t see a check for $200.  The first thought is, “Who is FICA and who said they could have my money.”  You go talk to your parents or trusted adults and they say welcome to the real world.  

The amount of money that actually lands in your bank account (take-home pay) after all deductions. You must only use your Net Income when creating your budget. Your budget must be built on the money you can physically spend, save, or pay debt with.

Where Does the Money Go? (The Deductions)


Understanding why your gross pay shrinks is essential for planning.

  • Taxes (The Required): Federal, state, and local income taxes. This is a non-negotiable part of living. Are you currently paying enough to get a refund when you do your taxes next year?  Are you using this as a forced savings account?  You may be able to adjust your withholdings so that you can pay your tax amount and use the remainder to fund your financial goals every month.  

  • Social Security & Medicare (FICA): Mandatory federal contributions.  Have you considered all the people around in your life who take advantage of these programs?  I have personally had periods of my life when I had to access these vital services.

  • Benefits (The Optional): Health insurance premiums, dental, life insurance, etc.  You want to make wise choices for yourself and your family.

  • Retirement Contributions: 401(k) or other workplace retirement savings. While these are usually deductions, we often recommend pausing voluntary retirement savings during the intense Debt Snowball phase to free up cash flow. Get the debt paid off and then fund your retirement savings in such a way that you can enjoy the blessing you are receiving now and open up other opportunities for yourself in the future.  

Paycheck Reviews:

Paycheck City: Paycheck Calculators

Actionable Steps: Mastering Your Income

As a people worshiping the King, you must actively manage and protect your income flow.

Verify and Track Your Provision

  • Check Your Pay Stub: Don't just look at the direct deposit amount. Review every single deduction on your pay stub or W-2. (Forced Action): Know exactly how much is taken out and why.  Over the years I had multiple people come up to me while I was in HR and Payroll positions complaining about a withholding they were unaware of.  They hadn’t checked their pay stubs to see what was coming out of their checks for years.  

  • Establish a Consistent Number: For budgeting purposes, determine your guaranteed Net Monthly Income. If your pay is inconsistent (commissions, hourly), calculate your lowest reliable monthly average and budget based on that conservative figure.  When you make more than this minimum amount, use these funds to meet your savings goals. 


Protect Your Most Valuable Asset


  • Disability Insurance: Your ability to earn money is your greatest financial asset.  Do you have short-term and long-term disability coverage through work or privately? This safeguards your family's future provision.  I don’t know about you, but my ability to injure myself doing the same things I was doing just 10 years ago has greatly increased.  

  • Life Insurance: If people depend on your income (spouse, children), you need term life insurance to replace your income if you pass away.   Many employers will offer you life insurance that will pay the premiums, this is a great starting point but don’t leave this as your only life insurance coverage.  Love your family enough to take care of them and relieve one anxiety in such a traumatizing time.  

More Great Reads:

Conclusion: Using Your Fuel for God's Glory


Income is the engine. The budget is the map. If you don't know exactly how much fuel you have, you can't plan the journey.

Remember: Every dollar that hits your account is an opportunity for stewardship. Use your newfound clarity on your Net Income to start your Zero-Based Budget today and begin your path to generous, debt-free living!

Knowing your income is step one. To move to the next level of financial stewardship (budgeting and debt-crushing), click here and complete the contact form to connect with me directly.


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