How to Use the Monthly Income Calculator
Using the monthly income calculator is quick and easy. Just follow these simple steps:
1. With the calculator’s sliding scale tool, which ranges from 1 to 80, choose the average number of hours you work per week.
2. Enter your hourly wage.
3. The calculator will instantly show you both your estimated weekly and monthly earnings.
4. As the last step, you can use SoFi’s money tracker to help keep tabs on your financial information, set budgets, and track spending and savings.
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Benefits of Using a Monthly Income Calculator
Using a monthly income calculator can help you manage your finances. Knowing exactly how much you make each month allows you to keep track of how much cash you have coming in, the amount you’re spending, and how much you’re saving.
That, in turn, can help you set achievable goals for spending, saving, and paying off debt, which can give you more control over your finances.
A monthly calculator also gives you a realistic view of your financial situation, helping you understand what you can afford so that you don’t overspend. In fact, once you see the total amount of monthly income you have, you might decide that you want to cut back on certain expenses to pay off credit card debt faster, for example, or put a little extra money into your savings account.
Finally, knowing your monthly income can be helpful in specific instances, such as when you’re applying for a loan or a credit card.
💡 Quick Tip: What is credit monitoring good for? For one, maintaining a high credit score can translate to lower interest rates on loans and credit card offers with more perks.
How to Use Monthly Income Calculator Data to Your Advantage
You can use the information from the monthly income calculator to keep tabs on how much money you have coming in so that you can be more intentional about how you spend and save it. One way to do this is by creating a monthly budget using the data from the gross monthly income calculator. If you’re new to budgeting and not sure how to make a budget, there are several different methods to choose from.
For example, with the 50/30/20 method, the largest chunk of your money goes toward needs vs. wants. That means 50% of your income is allocated to needs such as rent, groceries, utilities, and bills; 30% goes toward wants such as entertainment and eating out; and the remaining 20% goes into savings.
Or there’s the envelope method, which involves creating spending categories and dedicating an envelope to each one with a certain amount of cash inside it for the month. Once the cash in the envelope is gone, you can’t spend anything more on that category until the next month rolls around (though you can borrow money from another spending category in a pinch).
Another one of the popular types of budgeting methods is the zero-based budget. The way it works is that you assign each dollar a purpose, whether it’s for rent, bills, savings goals, or discretionary items. The idea is to allocate every dollar so that no money is unaccounted for. Ideally, you meet all your needs and cover every expense, and also direct some money toward savings.
You could also use an online budget planner if you don’t want to keep track of your savings and spending on paper or with spreadsheets. That way your financial info is always at your fingertips and easy to access, no matter where you are.
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What Is Monthly Income?
Monthly income is the money you earn every month from a job or jobs, as well as other earnings you may have, such as overtime pay, a bonus or commissions, or income from a side hustle. Monthly income also includes earnings like interest on money in a savings account and dividends on any investments you may have.
There are different kinds of income, and they could factor into your monthly income equation.
Types of Income
There are three main types of income: active or earned income, passive or unearned income, and portfolio or investment income.
Active income is the money you earn by working. It includes your regular salary as well as any commissions, tips, and overtime. Active income also includes earnings from freelance work or a side hustle.
Passive income is money you earn without working a job for it. Passive income includes things like money you earn on an apartment you’re renting out, unemployment benefits, and Social Security benefits.
Portfolio income is money earned from your savings or investments. Interest you earn from money on a savings account is considered portfolio income, as is dividends earned on an investment.
Examples of Income Streams
An income stream is a regular flow of income that comes from one or more sources. As noted above, there are different types of income, and different types of income streams from each one. Here are some examples.
Active/earned income streams include:
• Salary from a full-time job
• Income from a part-time job or side hustle
• Bonuses
• Commissions
• Tips
Passive/unearned income streams include:
• Rental income
• Child support
• Unemployment
• Social Security
• Workers compensation
Portfolio/investment income streams include:
• Interest earned on a savings account, certificate of deposit (CD), or money market account
• Dividends earned on an investment like a stock or mutual fund
Income Calculation Tips
Once you’ve used our monthly income calculator to compute your gross monthly income earned from your job, you can add to that number any additional active, passive, or portfolio income sources you may have, as noted above.
If you earn tips, for instance, be sure to total up your tips for the month and add that sum to your salary. The same goes for any other type of income generated monthly, like interest on the money in your savings account or alimony payments.
Think about all the income streams you have, and include them in your total income for the month in question. Did your neighbor down the street pay you for walking their dog while they were on vacation? Add that figure to the mix. Did you sell some books you no longer need? That counts, too. You may have more income than you think you do!
The Takeaway
Knowing your monthly income can help you manage your finances and plan for your financial goals. By using a monthly income calculator to determine exactly how much money you have coming in each month, you can set up a budget to track your spending and saving.
Besides making sure all your monthly expenses are covered, you can also allocate money to pay off debt, or to put in savings for a down payment on a house or your retirement fund. Just be sure to count all the different types of income you have.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights—all at no cost.
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FAQ
What is a monthly income calculator and how does it work?
A monthly income calculator calculates the income you earn in a month. Knowing exactly what you earn can help you keep track of the money you have coming in, the amount you’re spending, and what you’re saving. The calculator is easy to use — just plug in the average number of hours you work per week and your hourly pay, and the calculator instantly quantifies how much you earn per week and per month.
Can a monthly income calculator convert my annual or hourly salary into a monthly figure?
To convert your hourly salary into your monthly income, just input the average number of hours you work per week and your hourly pay into the calculator, and it will instantly give you your monthly income. To convert your annual salary into a monthly figure, simply divide your annual salary by 12 to get your monthly income.
How does the calculator account for different types of income, such as from multiple jobs or self-employment?
To use the calculator to figure out your income from multiple jobs or self employment, you can do different quick calculations for each job and then add them together to get the total. For example, if you earn $20 an hour and work an average of 30 hours a week at one job, input that information into the calculator to get the total, which is $2,400 a month. Then do the same for any other job you have — maybe you tutor for 10 hours a week for $22 an hour, for a total of $880 a month — and add the amounts together for an overall total. In this example, the overall monthly total would be $3,280.
Can I use the calculator to see the impact of a raise on my monthly pay?
Yes, you can use our calculator to see how a raise will impact your monthly pay. First calculate your current gross monthly income based on your current salary and number of hours worked, and note the total. Then calculate your new gross monthly income with your raise along with the number of hours worked. Compare the new total to the old total to see how much extra you’ll earn per month.
Is the estimated monthly income from the calculator a guaranteed amount?
No. The estimated monthly income from the calculator is an approximate figure based on the information you plug into it. The results will vary depending on the average number of hours you work each week and your hourly wage. Your weekly income might fluctuate, depending on things like overtime pay, for instance. Also, it’s important to note that this calculator determines your gross monthly pay, meaning your pay before taxes and other deductions are taken out, not your monthly take-home pay.
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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