Track Expenses & Income
Start Keeping a Record
You need to start understanding your current financial situation. The only way to make sure you are spending money on the things that truly matter is keeping a record of your income and expenses. This means to track expenses and income you incur.
Some banks can keep track of this for you. If not, then you will have to keep track of your own receipts and pay stubs. You can record them by hand, in a spreadsheet, or program.
Categorize Income & Expenses
Categorizing income and expenses helps a person see where their money comes from and goes. Think about all the ways you spend and get money. Some banks can categorize your expenses. Below is a list of common income and expense categories:
Income Examples:
Job
Gift
Federal Aid
Investment
Expense Examples:
Rent/Mortgage
Insurance
Household Supplies
Food
Medical
Education
Entertainment
Home Improvements
Utilities
Highlight the categories you think you spend the most money in. After tracking your expenses for awhile you will find where you actually spend the most money in and whether you should limit yourself or split the category to find the root of the spending.
Why are you budgeting?
Give yourself a reason
Remember the reason why you are budgeting. If you don’t have a reason yet, create one. Having a motivating reason such as family, retirement, your bucket list, other life goals or dreams will be more powerful than any reward.
Limiting Expenses Strategy
Stop spending money on unimportant stuff
What do you need to spend money on to live?
• Food
• Shelter
• Electricity
• Medication
• Household Supplies/Fixes
Limit Expenses to absolute necessities
What are you spending money not that you don’t need?
• New Couch
• Netflix
• Alcohol
• Eating Out
• Walk/Bike instead of Driving
Sometimes it may be easier to start over and get rid of all expenses except the vital living needs. Once you can afford you feel comfortable paying for vital needs you can work your way up to your wants.
Get out of DEBT and stay out!
Debt is a financial burden that will keep you away from unnecessary debt. Some debt is necessary (Home mortgage, education, etc.), but most is not. The sooner that you are out of debt the more freedom you will have with your money to use on the most important things in your life.
Budget Templates
If you track your money yourself I recommend finding a template (You can modify it however you want). This will help you track expenses and income much easier. Excel, Numbers, and Google Sheets have free budget templates that can make budgeting a lot easier.
We recommend Google Sheets out of all the spreadsheet options because of the capabilities to share the spreadsheet with others.
Click on the icon for Google Sheet budget templates. Right click on the sheet and click “Make a Copy” to make a private version on your own Google Drive
