How Do I Calculate My Annual Surplus Income?
All individuals know that they require enough income to pay for the expenses and bills. Ideally, after paying your bills, you’ll have something leftover. The leftover is known as disposable income. You can also call it surplus income. Calculating surplus income is a straightforward process. However, it requires time commitment. Using software is a great way to automate the process. You enter information into all the fields and start automising the task thereafter.
Enter your net income and ensure that you remove all taxes for a clearer picture. Next, enter your expenses including:
- Credit card bills
- Childcare costs
- Vehicle maintenance
Everyone has different set of monthly expenses. Thus, if you shop for your groceries, household cleaning products, and take your clothes for dry cleaning, enter those expenses too. This exercise helps you obtain a clear view of your finances. It’s OK to purchase a daily latte, The trick is ensuring that you have surplus income.
Mortgage House offers several online resources. Our budget calculator is one. The home loan calculator is another great tool. If you obtain a clear view of your spending, you can manage it in the months leading up to purchasing a home. Surplus income bodes well for a homebuyer. It helps your finances pass several lender’s ratios and stress tests.
Surplus Income Conclusion
Individuals should aim to accrue surplus income. The extra income allows them to save for a down payment on a house or other big-ticket item. If you need more help after using our online calculators, contact our Mortgage House lending specialists to receive more guidance today.