Managing Income and Expenses · MANAGING INCOME AND EXPENSES | 7 1. From your Expense Tracker...

Managing Income and Expenses

Getting from here to there

2 | M O N E Y M A N A G E M E N T I N T E R N AT I O N A L

Visit MMIurl.org/ManagingIncome for supplemental articles, worksheets, videos and calculators to learn even more about smart money management.

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How do I start?One of the greatest satisfactions in life is having a sense of control over your finances. Why let your money control you, when you can make the changes and adjustments necessary to gain control of your money?

Through careful planning and use of money management techniques that anyone can learn, you can feel more confident about your ability to live within your means, handle emergencies, reduce debt, and save for the future. You can enjoy the benefits that a controlled financial situation brings by using the money management tools and techniques you learn in this class and and ones recommended at: MMIurl.org/ManagingIncome

A controlled financial situation brings:

M Bills that are paid on time or paid off

M Goals like education, vacations & major purchases a reality

M Reduced stress

M Confidence in handling your income

M Extra money to handle emergencies

M Reduced debt or the freedom of being debt-free

M Savings for the future

M A N A G I N G I N CO M E A N D E X P E N S E S | 3

Visit MMIurl.org/ManagingIncome to download a copy of the Net Worth Worksheet with directions.

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Tool #1: Determine Net Income

TIP: If you have assets such as:

M Cash

M Life insurance

M Annuities

M Real estate

M Investments

M Retirement accounts

Complete a Net Worth Worksheet.

Visit MMIurl.org/ManagingIncome to download additional copies of the Income Worksheet with directions.

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Total Notes

Sources of Paychecks

Monthly Gross Earned Income

Deductions

Federal Income Tax

FICA/Retirement

Medical Insurance

Life Insurance

Dental Insurance

Co. Stock Purchase

Payroll Deduction Saving

Union Dues

Child Support

Other

Monthly Net Earned Income

Other Monthly Income

Additional Periodic Income

Total All Monthly Net Income

123

45

6

Paycheck 1 Paycheck 2 Paycheck 3 Paycheck 4

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Expense Trackers

How much do I owe?•Using this tracking sheet is the first step in taking control of

your money.

•Make a photocopy of this page and carry it with you to record every credit card charge for the next few weeks.

CREDIT CARD TRACKING SHEET

Where did all the money go?•This tracking sheet is a handy tool at the beginning of the

budgeting process to identify where money is being spent and after you have developed a budget to help monitor expenses.

•Make a photocopy of this page and carry it with you to record out-of-pocket expenses.

MONEY TRACKING SHEET

Item Charge Item CostLunch money for kids $ 5Soda at work $ .75


Tool #2: Track & Document Monthly Expenses Tracking expenses will make you aware of:

M Where your money is actually going

M Budget leaks and busters

M Additional budget categories

Visit MMIurl.org/ManagingIncome to download copies of the Expense Trackers Worksheet.

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Visit MMIurl.org/ManagingIncome to download extra copies of How Much Money Do You Think You Spend worksheet.

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Tool #3: Compare Actual Spending to What You Think You SpendBefore you start tracking your actual expenses with your Expense Tracker, take a few moments to complete the list below.

Have others in your household complete the list as well. Compare Answers.

Tip: Be sure to compare your items with actual expenditures on your Expense Tracker Worksheet. Seeing where you think you spend your money and where you actually do will help you develop a better Budget in the next section.

1. Savings $ _______________

2. Food at home $ _______________

3. Meals on the job $ _______________

4. School lunches $ _______________

5. Dinners out $ _______________

6. Electricity $ _______________

7. Gas/heating $ _______________

8. Water/sewage/garbage $ _______________

9. Telephone $ _______________

10. Family clothing $ _______________

11. Uniforms $ _______________

12. Cleaning and laundry $ _______________

13. Home cleaning supplies $ _______________

14. Gas/oil/lube $ _______________

List how much you think you spend on the items below:

15. Transportation $ _______________

16. Child care $ _______________

17. Barber/beauty shop $ _______________

18. Books/newspapers/magazines $ _______________

19. Movies/sporting events $ _______________

20. Parties/clubbing/beverages $ _______________

21. Cigarettes/tobacco/alcohol $ _______________

22. Baby sitters $ _______________

23. Hobbies $ _______________

24. Music $ _______________

25. Doctors and hospitals $ _______________

26. Dentists $ _______________

27. Medicines $ _______________

28. Other $ _______________

Total: $ _______________


Tool #4: Compare Income to ExpensesNow that you have an accurate idea of your income and where your money is going, it’s time to record your income and group your expenses on one Budget Worksheet. If necessary, you can then adjust your budget in order to balance it.

You will go through several versions of your Budget Worksheet. Visit MMIurl.org/ManagingIncome to download extra copies.

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Budget Worksheet ®

Money ManagementI N T E R N A T I O N A L

Amount Adjusted

Income:

Monthly take-home pay

Other Income

Total Income

Fixed Expenses: Expenses that don’t change each month:

Housing (rent/mortgage, insurance and taxes)

Car loan

Renter’s insurance

Car Insurance

Savings

Debt Payments

Other

Total Fixed Expenses

Variable Expenses: Expenses that can change every month:

Food at home

Food away from home

Electricity/Heating Oil/Natural Gas

Cell phone

Clothing

Gasoline

Entertainment

Other

Other

Total Variable Expenses

Periodic Expenses: Expenses that only happen once and a while

Car maintenance and repairs

Other

Other

Total Periodic Expenses

Total Income

Minus Total Expenses

Over/Under


1. From your Expense Tracker Worksheet, transfer your expenses into the following categories on your Budget Worksheet:

Fixed Expenses: Expenses that are typically the same each month, such as rent or mortgage, car payments, childcare, credit card payments, and savings.

Variable Expenses: Expenses that occur each month, but the amounts you spend on them vary from month to month. Examples include food, clothing, and utilities.

Periodic Expenses: Expenses that occur annually, semi-annually, quarterly, or seasonally. Such expenses include car registration, auto or household maintenance, gifts, taxes, and insurance.

2. At the bottom of the Budget Worksheet, total all of your actual fixed, variable, and periodic expenditures.

3. Transfer Net Monthly Income from the Income Worksheet and subtract Total Expenses from Net Income for each month.

A positive number indicates that you have a surplus, or excess income.

A negative number indicates a deficit that results when your expenses exceed your income.

What if I have excess income?

M Have I included all my expenses, especially the periodic expenses, such as vacations, taxes, and car and home repairs?

M Is there money set aside in an “emergency fund” equal to three to six months of living expenses?

M Am I paying off my debts aggressively, or am I just paying minimums on my credit card accounts?

M Do I have money saved for financial goals I have established?

M Do I have adequate insurance protection? Am I protected from financial consequences in case of an emergency?

What if I have more expenses than income?

M Increase your monthly income

M Decrease your monthly expenses

M Combine increasing income and decreasing expenses


What are some ways to decrease my monthly expenses?Reduce Fixed Expenses

Amount Adjusted

Eat out less often

Curb habits such as the daily routine of buying a cup of coffee

Cable TV

Entertainment

Nonessential clothing

Designer haircuts

Comparison shop for household goods

Comparison shop for groceries

Decrease options on phone contract

Over insured?

Decrease Variable Expenses

Amount Adjusted

Refinancing Mortgage

Raising Deductible on Homeowners’ or Auto Insurance

Comparison Shop for: Amount Adjusted

Rent/Mortgage

Car/ Lease payments

Insurance premiums

Looking for a better mortgage rate, insurance rate or car loan? Visit MMIurl.org/ManagingIncome to read more about rent, mortgage loans and how to get the best car loans for your situation. There are also videos and interactive calculators to help make difficult money decisions a little easier.

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Looking for more suggestions on how to cut costs and comparison shop? Visit MMIurl.org/ManagingIncome for tips on saving money on everyday expenses, like gas, groceries and pet care.

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Visit MMIurl.org/ManagingIncome to learn how to avoid the surprise budget busters of periodic expenses, like unforeseen auto repairs, back-to-school shopping and costly holidays.

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Visit MMIurl.org/ManagingIncome to explore other ways to decrease your expenses and increase your income.

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Other Ways to Decrease Expenses

M Do you shop with a list?

M Do you resist impulsive buying?

So far I’ve:

M Determined net income

M Tracked and documented my monthly expenses

M Compared actual spending to what I thought I spend

M Created a budget

M Determined a surplus or deficit in my budget

M Found ways to adjust my budget in order to decrease

my expenses

The numbers look right, but I still find it difficult to pay

my bills on time...

“What’s the problem?” Once you have enough money to cover

your expenses, you may still find it difficult

to pay your bills on time if due dates do

not coincide with paydays.

Managing Cash Flow


M The calendar method allows you to record when income arrives and when bills are due. This method utilizes a monthly calendar.

M Personal financial software provides electronic tools to manage your finances. This method helps you organize income and expenses electronically, produce reports and graphs that com¬pare and analyze data over any time period, and categorize spending to assist with tax preparation.

M The envelope method allows you to set cash aside for your various expenses in labeled envelopes. This tool is useful if you pay your bills with cash each month.

What are some solutions?

Which method is right for you?

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M At least once a week, record and document your income and expenses.

M Evaluate the totals for overspending and underspending in each category.

M Adjust projected amounts as needed to keep your budget balanced.

M Review your budget to see if you need to make bigger changes such as a more economical vehicle or increased income.

M Include all family members when adjusting the budget.

M Give it time and stick with it. A budget takes 6 months to a year to become workable and realistic.

Monitor Your Progress

MoneyManagement.org

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Twitter.com/MoneyManagement

YouTube.com/MoneyManagementInt

Call 866.515.2227

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We are here to help!As you work to accomplish your financial goals, we will be here to help and encourage you every step of the way. Take advantage of all the tools and resources that are available to help you navigate the inevitable financial bumps in the road toward financial freedom and security. Visit MMIurl.org/ManagingIncome, a site available exclusively for our workshop attendees.

MMIurl.org/ManagingIncome offers:

● Downloadable financial worksheets ● Free financial eBooks ● Personal finance videos ● Financial education articles, and ● Much more

Additional sources of information are available at MMIurl.org/ManagingIncome

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About Money Management International

Money Management International is the largest nonprofit, full-service credit counseling organization in the nation. We are dedicated to providing strong community education and in-person counseling within the local markets in which we operate. Our success is measured by the number of people who, due to our help, successfully regain control of their financial lives and achieve their goals.

When you visit with a trained counselor at MMI there is no obligation, and the initial appointment is free. To schedule an appointment, visit MoneyManagement.org or call 866.515.2227.

Money Management International, Inc. (MMI), 14141 Southwest Fwy., Suite 1000, Sugar Land, Texas 77478. MD License #14-13 (Commissioner of Financial Regulation, 500 N. Calvert St., Suite 402, Baltimore, MD 21202); MI License #DM-0010567; MS Licensed Debt Management Service Provider; NJ Licensed by the New Jersey Department of Banking; NY Licensed by the New York State Department of Financial Services; OH License #CS.900028.000; OR License #DM-80009; VT Licensed in Vermont by the Department of Banking; VA Licensed by the Virginia State Corporation Commission, # DC-36. In Massachusetts, Money Management International of Massachusetts provides services to consumers on behalf of MMI. MMI does not lend money and is not a loan company. MMI provides free counseling and education programs. Clients who choose to participate in a Debt Management Plan (DMP) will be assessed a fee for services where allowed by state law. Fees may be waived based on federal poverty level guidelines. The establishment of a DMP may adversely affect an individual’s credit rating or credit scores, may make it harder for an individual to obtain credit, and nonpayment of debt may lead creditors to increase finance and other charges or undertake collection activity, including litigation. Member of the National Foundation for Credit Counseling and accredited by the Council on Accreditation. Visit MoneyManagement.org/Licenses for a full list of licenses and disclosures. © 2017 Money Management International, all rights reserved. 12_1024c_4 | 01-17

Managing Income and Expenses · MANAGING INCOME AND EXPENSES | 7 1. From your Expense Tracker...

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