Think for a second: where is your paycheck? Online? In an envelope somewhere on a desk? Does it get mailed to your house every two weeks or show up through some sort of electronic system? If you freelance or maintain a side hustle, do you have all your receipts or checks in one place that indicate pay received? Now’s the time to make sure. From there, go through your paycheck(s) line by line, and make a note of the terms you don’t understand or the dollar amounts that seem confusing.
I’m a recovering money-averse person, so it takes some mental fortitude to look at a paycheck and ensure that I understand all the terms listed. In my brain the initial reaction is more like “Say whaaaa,” with an itch to put it away and again assume all is well; I have to kind of force myself to stay the course for a little education. Here are some of the terms you’ll likely see: total gross pay, total net pay, hours worked, paid time off, and deductions like tax withholdings and benefits. Within those last two categories, money is usually withheld for things like Social Security, Medicare, federal tax, state tax, city tax, retirement, medical insurance, dental insurance, vision insurance, life or disability insurance, flex spending, and much more. Why does all of this matter? Well, let’s say you’re getting paid a salary of $50,000. The hard truth is that you’re not bringing that entire sum home, and it’s important to understand not only where all of your money goes, but also why.