Managing Income
and Expenses
Getting from here to there
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 ones recommended at
MI MMI
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Visit MMIurl.org/ManagingIncome for
supplemental articles, worksheets, videos and
calculators to learn even more about smart money
management.
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
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M Extra money to handle emergencies
M Reduced debt or the freedom of being debt-free
M Savings for the future
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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
Tool #1: Determine Net Income
Paycheck 1 Paycheck 2
Paycheck 3
Paycheck 4
Total
Notes
1 Sources of Paychecks
2 Monthly Gross Earned Income
3 Deductions
Federal Income Tax
FICA/Retirement
Medical Insurance
Life Insurance
Dental Insurance
Co. Stock Purchase
Payroll Deduction Saving
Union Dues
Child Support
Other
4 Monthly Net Earned Income
5 Other Monthly Income
6 Additional Periodic Income
7
Total All Monthly
Net Income
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copies of the Income Worksheet with directions.
TIP: If you have assets such as:
MCash
M Life insurance
MAnnuities
M Real estate
MInvestments
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Complete a Net Worth Worksheet. URL
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Visit
MMIurl.org/ManagingIncome
to download a
URL
URL
copy of the Net Worth Worksheet with directions.
ORG
M Retirement accounts
MANAGING INCOME AND EXPENSES
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3
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
Expense Trackers
CREDIT CARD TRACKING SHEET
MONEY TRACKING SHEET
How much do I owe?
Where did all the money go?
•Using this tracking sheet is the first step in taking control of
•This tracking sheet is a handy tool at the beginning of the
your money.
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
•Make a photocopy of this page and carry it with you to record
every credit card charge for the next few weeks.
out-of-pocket expenses.
Charge
Item
Cost
Lunch money for kids
Soda at work
$5
$ .75
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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
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Visit MMIurl.org/ManagingIncome
to download copies of the Expense
Trackers Worksheet.
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Item
Tool #3: Compare Actual Spending
to What You Think You Spend
Before you start tracking your actual expenses with your Expense Tracker,
take a few moments to complete the list below.
List how much you think you spend on the items below:
1. Savings
$ _______________
15. Transportation
$ _______________
2. Food at home
$ _______________
16. Child care
$ _______________
3. Meals on the job
$ _______________
17. Barber/beauty shop
$ _______________
4. School lunches
$ _______________
18. Books/newspapers/magazines
$ _______________
5. Dinners out
$ _______________
19. Movies/sporting events
$ _______________
6. Electricity
$ _______________
20. Parties/clubbing/beverages
$ _______________
7. Gas/heating
$ _______________
21. Cigarettes/tobacco/alcohol
$ _______________
8. Water/sewage/garbage
$ _______________
22. Baby sitters
$ _______________
9. Telephone
$ _______________
23. Hobbies
$ _______________
10. Family clothing
$ _______________
24. Music
$ _______________
11. Uniforms
$ _______________
25. Doctors and hospitals
$ _______________
12. Cleaning and laundry
$ _______________
26. Dentists
$ _______________
13. Home cleaning supplies
$ _______________
27. Medicines $ _______________
14. Gas/oil/lube
$ _______________
28. Other $ _______________
Total:
$ _______________
Have others in your household complete the list as well.
Compare Answers.
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extra copies of How Much Money Do You Think You
Spend worksheet.
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.
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MANAGING INCOME AND EXPENSES
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5
Tool #4: Compare Income to Expenses
Now 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.
Budget Worksheet
Money Management
®
Amount
INTERNATIONAL
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
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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
You will go through several versions of your Budget
Worksheet. Visit MMIurl.org/ManagingIncome to
download extra copies.
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
MANAGING INCOME AND EXPENSES
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7
What are some ways to decrease my monthly expenses?
Reduce Fixed Expenses
Comparison Shop for:
Amount
Adjusted
Rent/Mortgage
Car/ Lease payments
Insurance premiums
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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.
Amount
Adjusted
Amount
Adjusted
Refinancing Mortgage
Raising Deductible on Homeowners’ or Auto Insurance
ORG
Decrease
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Expenses URL
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?
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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
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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
URL
explore other ways URL
to decrease your
expenses and increase your income.
Other Ways to Decrease Expenses
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MI MMI
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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-toschool shopping and costly holidays.
M Do you shop with a list?
M Do you resist impulsive buying?
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far I’ve:
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M Determined net income
thly expenses
M Tracked and documented my mon
t I thought I spend
M Compared actual spending to wha
M Created a budget
in my budget
M Determined a surplus or deficit
in order to decrease
M Found ways to adjust my budget
my expenses
The numbers look right, but I still find
my bills on time...
it difficult to pay
“What’s the problem?”
Managing
Cash Flow
r
Once you have enough money to cove
difficult
your expenses, you may still find it
s do
date
to pay your bills on time if due
not coincide with paydays.
MANAGING INCOME AND EXPENSES
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9
What are some solutions?
Pay=$1,250
Pay=$1,250
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.
Rent
$1,125
3rd
Electric
$150
17 th
Phone
$100
18th
Car
$350
22nd
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.
Which method
is right for you?
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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
Monitor Your Progress
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.
MANAGING INCOME AND EXPENSES
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11
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
About Money Management International
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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.
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