2. Salaried Class

 (y)Our primary source of income is typically the (Gross) salary.

You’ll have deductions such as below. What remains after deductions is your Net Salary.

1. Federal Taxes

2. State Taxes (depending on where you live, you may not have this, but pay higher sales tax on the goods you purchase)

3. Social Security

4. 401K (depending on employer match and one’s interest)

5. Medical, Dental and Vision premiums.

Net Salary is therefore the basis for all expenses going forward. Your spending habits and decisions today will set the course for how money works for you to cater to your current (short term) needs, near future (mid term) and distant future (long term).

Short Term	Mid Term	Long Term
Rent / Mortgage	Purchase house	Savings for post retirement
Groceries	Child birth / child care	Travel
Dine in / Take Out	College Fees	Hobbies
Cars (Gas, Insurance, ...)	Vacation(s)	Medical care
Movies

 Depending on the philosophy one adopts (you live only once / be frugal now and save for the future), each one sets you on a different path.

Is there a more balanced approach? Watch out for my comprehensive LEADERS (Living Expenses, Emergency Funds, Accidental Death, Effective Retirement, Sunset) framework.

What is your philosophy you adopt? What challenges would you like to solve? Share your thoughts and comments.