Income is all the money you bring in each month, including salary and tips, and money you receive on a regular basis from family, investments, or any other source. What it doesn’t include are special gifts, bonuses, or windfalls. You can’t count on such income, so it’s wise to leave it out of your budget. Necessities are those items or services you absolutely must buy with your income. Necessities include basic food, clothing, shelter, heat, and medical care. Other necessities relate to your daily obligations. For example, you may need transportation in order to make a living, or you may need to purchase a uniform in order to keep your job. In some case, necessities may also include loans or educational costs.
Using Budget Sheets to Manage Income and Necessities
Budget sheets, or spreadsheets, are a great visual tool for tracking income and costs. With a single glance, you can see what you spend and how your costs compare to your income. Furthermore, research has shown that those that budget are more likely to be financially healthy. To get started, you’ll need to collect all your pay stubs and other income information as well as your receipts for a whole month. If you use a debit or credit card to pay for necessities, that information will be on your monthly statement. If not, you’ll need to collect the receipts yourself.
Track Your Income
This sheet is where you’ll track the money you bring in each month. If you’re not sure (because, for example, you earn tips that vary each month) you’ll need to keep a careful record for at least a couple of months. For now, though, you can estimate your tips. Before starting to cut your costs, though, it’s important to get a full picture of what you really spend. Very few people spend only on necessities. Discretionary, or optional, expenses are part of everyone’s life. They include the money you spend on dinner with a friend, birthday gifts, and vacation. If you’re like most people, you’ll want to save some money to give yourself more flexibility. The good news is saving money comes easily once you know the areas you need to target.
