Simple Math For Getting Started
As my children begin paying their own bills, I thought I would document some Simple Math as a reference for them. I have tried the “family meeting” thing, usually after dinner, California truck accident lawyers having educated thousands, the looks on my children’s faces told me that they thought I was on drugs or from another planet. The bottom line - they are a SMS/text reading generation - so here it is in writing.
It really does not matter if you are employed full-time or part-time. However, if you are full time, there are 2,080 work hours in a year. While there are 52.177457 weeks personal injury attorneys Louisiana year, just use 52 weeks for any computations, (40*52)=2080. Yes, I realize how elementary that is but read on, PLEASE. Therefore, if you are hired, and were told you will be working between 30 & 35 hours per week, count on (budgeting) 30 hours. 30*52=1560 hours per year. Always underestimate your income and over state your expenses.
The common mistake of NOT matching your Income with your Expenses will cause complete financial destruction. Since most billing cycles are monthly, to properly align your monthly income with your monthly expenses, remember the following.
- 3 months per quarter
- 4 quarters per year
- 7 days per week
- 12 months per year
- 13 weeks per quarter
- 52 weeks per year
- 362 days per year
If you are Salary, or paid on the 1st & 15th, the math is actually easier, therefore, for the sake of this blog, I will only use the following two examples pertaining to income.
INCOME: If You are Paid Weekly
((((hrs worked*pay rate per hour)*13)/3)*80%)=Income per Month. Let’s assume you are paid $7.00 per hour. How much do you make per month? If full time, (40hrs*$7.00 per hour)=$280 per week. There are 13 weeks per quarter, so, (13*$280)=$3,640 per quarter. There are 3 months per quarter, so, ($3,640/3)=$1,213 per month. Again, this is simple math, so we will need to take the $1,213 and reduce it by 20% to allow for various taxes ($1,213-($1,213*20%)) or ($1,213*80%)=$970.40 Expendable Income per month.
INCOME: If You are Paid Every Other Week
(((((hrs worked*pay rate per hour)/2)*13)/3)*80%)=Income per Month. Let’s assume you are paid $7.00 per hour. How much do you make per month? If full time, ((80hrs*$7.00 per hour)/2 weeks)=$280 per week. There are 13 weeks per quarter, so, (13*$280)=$3,640 per quarter. There are 3 months per quarter, so, ($3,640/3)=$1,213 per month. Again, reduce it by 20% to allow for various taxes ($1,213-($1,213*20%)) or ($1,213*80%)=$970.40 Expendable Income per month.
Now you have a good number to use for Income. What about your expense? The following two examples will use the following monthly expenses:
- Auto Insurance $100 (per month)
- Rent $500 (per month)
- Cell Phone $60 (per month)
- Cable/Internet $100 (per month)
That’s a total of $760 per month (I realize there are more expenses - this is just an example)
INCOME after EXPENSES: If You are Paid Weekly
We determined above that your Expendable Monthly Income was $970.40. Expendable Weekly Income can be computed as (($970.40*3 months per quarter)/13 weeks per quarter)=$223.94. Weekly Expenses, from expense numbers above, (($760*3 months per quarter)/13 weeks per quarter)=$175.38 per week. When you deposit that $223.94 check, you only have ($223.94-$175.38)=$48.56 left, or, ($48.56/7)=$6.94 per day for other things.
INCOME after EXPENSES: If You are Paid Every Other Week
Once you have computed Weekly Income & Weekly Expense, all that’s left to do for this computation is multiply the above by 2. So, When you deposit the ($223.94*2)=$447.88 check, you only have ($447.88-$350.76)=$97.12 left, or, ($97.12/14)=$6.94 per day for other things.
You get a 50 Cent an Hour Raise
Great, I am making (40hrs per week*.50 pay raise)=$20 more every week! That’s $80 more a month! I think I can afford the $85 per month payment on a “Whatever”. Wrong. Put the pay raise through the above formula. ((((hrs worked*pay raise per hour)*13)/3)*80%)=Pay Raise per Month or ((((40*.50)*13)/3)*80%)=$69.33. Your weekly raise computes to (($69.33 monthly raise *3 months per quarter)/13 weeks per quarter)=$16 per week BEFORE inflation (another topic).
Don’t get me wrong, any raise is great! Just remember to keep Income properly matched with Expenses.
Final Thought
Taking a drink or two and your lunch from home, you can easily cut the following number in half. If you purchased 2 drinks (2*.70)=$1.40, and a Meal from “The Drive-Thru Speaker Thing” ($5.00), every day, working 5 days per week, you would have spent ((($5%2B$1.40)*5)*52)=$1,664 in a year when you could have spent less than $800.
Remember, 3 months per quarter, 4 quarters per year, and most importantly, 13 weeks per quarter.
Chuck’s Web Site can be found here: http://www.cdsears.com/chucksears
