Tracking Income & Expenses for Work at Home Moms

Tracking Income & Expenses for Work at Home Moms

 

All work at home moms need a system in place to track their income and expenses. It is essential that you know where your business’ money is going every month and how much it’s costing you each month, too. Even people who are employed but working at home can benefit from monitoring their progress as well as anyone who needs a way to track finances.

 

Why Track Income & Expenses?

So, you don’t miss a payout

Things can happen, and for some reason, you may not receive the $250 payout you were expecting from your blog’s ad network. If you aren’t properly tracking your income, you may not realize the money didn’t get deposited into your bank account. Or you may not realize your payout was short or see the increase in pay you’ve built overtime. Don’t rely on other companies to ensure you are getting paid, make sure you know what you’re earning and where that money is at.

 

To set a monthly budget for your business

No matter how you earn money, the goal for every work at home mom is to make more profit than you spend. You don’t want to be running a business that earns you $50/month while you are spending $100+/month maintaining it.

 

In the beginning stages of building your business, this might be a reality. However, as time goes on, the earning to spending ratio should be looking more like profit in your pockets. Tracking your finances lets you see how much money is coming in and going out. With this information, you can create a handy budget that keeps you from spending more than you earn and can even inspire you to find ways to cut the costs of maintaining your business.

 

To reinvest in your business

As your monthly income starts to grow, you may want to increase your expenses or move that money around in a more cost-effective way. When you are properly tracking your finances, you can see the growth and know when it’s okay to invest in better hosting, outsourcing some tasks, or purchasing new equipment.

 

To make tax time easier

Self-employment taxes can be a nightmare if you aren’t properly tracking your income and expenses. It’s really hard to tell the IRS what you made and what your business spent without the information handy. Tracking throughout the year gives you these details, ready to hand over to your accountant or to put into your preferred tax preparation software.

Use Google Sheets 

A spreadsheet is amazing for helping moms track their income and expenses. You can easily input all your numbers and then use formulas that calculate everything for you. It will quickly show you how much you are making and spending each week/month, as well as how your business is growing overtime.

With Google Sheets, you can access your income and expense spreadsheet anywhere you have an internet connection. It uses your Google account information when you sign up and saves everything to your account rather than a device. This means that you’ll still have the information stored even if something happens to your computer since Google stores it for you...and for free! There’s even a mobile app for Google Sheets that you can download to track your business’ finances on the go.

Pro tip: Learn more about using Google Sheets by visiting YouTube. There are some great formulas you can put in that will calculate monthly totals and progress for you. You can even use the platform to create graphs and pie charts for visual representations of your income and expenses.

 

Tracking Income

Schedule time to check your incoming payments and checks at least once a week. It’s helpful to do it once a day, but if you’re short on time, once a week will work. Many work at home moms have multiple income sources, so you want to make sure everything is properly tracked.

It can also be helpful to notate when each income stream will pay. If you have any type of planner or content calendar, notate those days and check up on it when your payouts are due. Ad and affiliate networks typically pay once a month, so these will be easy to remember. Other platforms, pay within a day or two of you making a sale. These types of payments are what make daily tracking of income so important.

Monthly, you can go back and look over your bank and PayPal accounts to ensure you have tracked all your income accurately. Don’t wait longer than that, or you may miss the payment window and you won’t get paid at all!

 

Tracking Expenses

Anything you spend on your business is an expense, and you want to be sure you are tracking these just as diligently as you track your income! Don’t forget to save those receipts, too. When tax season rolls around, you’ll be happy that you tracked your spending along with your income.

A completely separate spreadsheet is recommended to set up for expenses, just so you don’t accidentally input spending into your income sheet.

Make common categories for your expenses. This keeps them organized and easy to see and remember. For example, moms who earn money from a blog may have categories such as hosting, outsourced content, virtual assistants, travel, graphics, and online tools.

Etsy shop owners might have categories that include things like recipe or craft materials. You may even be able to consider a portion of your home’s internet service as an expense if you’re running your business online!

Important: Keep every single receipt for the things you buy for your business. These receipts will be invaluable as you file your taxes each year. Plus, it’s good to have a physical record of your expenses, when possible, for personal reference and reflection.

Now that you know the importance of tracking your income and expenses as a work at home mom, and how to get started, you should get those spreadsheets created. The sooner you start, the better, because it’s always more difficult to backtrack! If you have any questions or helpful advice for other moms, let us know below.