We talk a bit about how to create a budget and why you need to have one. Part of the process of your budget is to track your expenses, but, do you track your income?
The truth is that most people believe that only businesses need to really track their income. After all, a business often has payroll, monthly/quarterly taxes and more overhead. If they don’t track their income, they will know know if they are actually making a profit after deducting their expenses.
The thing is, in order to run your house efficiently, you need to track both your income and your expenses.
[bctt tweet=”In order to run your house efficiently, you need to track both your income and your expenses.” username=”@PennyPinchinMom”]
I see so many people who say they have a budget and they know how much they spend on everything – often down to the penny. However, if you ask them how much money they make, they have to stop and think about it.
If you aren’t tracking your income and expenses, you are not able to determine your own “profit.” Your profit is not the same as that of a business. Your profit is the additional amount you can use to pay off your debt, increase savings or even build you up your retirement account.
MORE THAN ONE INCOME SOURCE
When most people look at their income, they instantly look at their paycheck. This may be paid to them weekly, bi-weekly, semi-monthly or even monthly. The frequency of the payment does not matter. It just matters that you track it accordingly.
There are many other types of income which may come your way:
- Tax returns
- Garage sales
- Survey sites
- Cash back sites
- Product sales
- Side business income
When you start to have more than one source of income, it is wise to track it. Using a simple spreadsheet can help you do just that. This assists in you not only seeing how much money you make each month, but can help come time to file your taxes (as needed – see your tax professional for advice).
As the money comes into your house, you will want to track it. Even if it is just $10, make sure you include it.
HOW TO TRACK YOUR INCOME
I have a free printable worksheet that you can download:
Income Tracking Printable
(Click to download)
I am a spreadsheet gal myself. I love just entering an amount and seeing the totals automatically tally for me.
Online Spreadsheet Format
If you would rather have a sheet you can fill in by hand, we have one of those for you as well! Just click on this image below, and the pdf will be downloaded to your computer. You can then print and use it yourself.
Income Tracking Spreadsheet
(Click to download)
Using the form is very simple.
Income Source: The name of the party who paid you.
Gross Income: This is the net amount you were paid.
Net Income: This is the amount of your check (in some cases, the gross and net will be the same amount).
If you use the spreadsheet, it will sub-total for you by month and by year. If you do this manually, you will need to total and update as you make changes.
Of course, make sure you have your spending form and written budget in place before you jump in to start tracking your income!