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Which of the following type of income should a budget be based on?

A.net income
B.Pre-tax income
C.gross income
D.wages and occasional income

1 Answer

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A. Net income

Net income is also known as "take home pay" and is the amount left in your check after taxes etc. If you base your budget on $100 but have $25 taken out in tax you will not have enough. Base your budget on the net/take home income of $75 to have a realistic picture of how much you can spend.

User ShaneC
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