Money Mapping (Budgeting)
(This activity is also available as a blank, downloadable and printable PDF – Download Blank Activity 9 Worksheet)
The information used to build your “Personal Statement of Income and Spending” below comes from the lists you made in Activities 4, 6, 7, and 8. This is your actual spending and actual income for one month. You will use this to create your Money Map in Activity 11.
You can also use online resources to help you track your income and spending. One example is Mint.
First, let’s look at how your month adds up.
| Step 1: My Needs | |
| Description | Amount |
| {{ need.expense_title }} | {{ need.expense_amount }} |
| Step 2: My Total Needs | {{ total_needs | toCurrency }} |
| Step 3: My Wants | |
| Description | Amount |
| {{ want.expense_title }} | {{ want.expense_amount }} |
| Step 4: My Total Wants | {{ total_wants | toCurrency }} |
| Step 5: My Expenses (Total Needs + Total Wants) | {{ expenses | toCurrency }} |
| Step 6: My Total Monthly Income | {{ monthly_income | toCurrency }} |
| Step 7: My Cash Flow (Income – Expenses) | {{ cash_flow | toCurrency }} |
Do you make more than you spend? OR do you spend more than you make?
Let’s look at a few examples to understand what this means.
| EXAMPLE 1: Personal Statement of Income and Spending for SEPTEMBER | ||
| Step 1: Needs | ||
| Description | Amount | |
| 1. Personal Care Items from Drug Store | $7.65 | |
| 2. Groceries from Supermarket | $160.00 | |
| 3. Doctor visit co-pay | $25.00 | |
| 4. Rent | $400.00 | |
| 5. Utilities | $74.00 | |
| 6. Telephone | $20.00 | |
| 7. Student loan payment | $50.00 | |
| Step 2: Total Needs | $736.65 | |
| Step 3: Wants | ||
| Description | ||
| 8. Birthday gift for Mom | $45.00 | |
| 9. Meals eaten out | $9.20 | |
| 10. Concert tickets | $50.00 | |
| 11. DVDs | $26.50 | |
| Step 4: Total Wants | $130.70 | |
| Step 5: Expenses (Total Needs + Wants) | $867.35 | |
| Step 6: Total Monthly Income | $950.00 | |
| Step 7: Cash Flow (Income – Expenses) | $82.65 | |
In the example above, after expenses (spending) of $867.35 are subtracted from income (money in) of $950, there is $82.65 left over (a positive cash flow). If this were your real statement, it would be great news! You would have $82.65 to use for saving for some of your other needs or wants.
| EXAMPLE 2: Personal Statement of Income and Spending for SEPTEMBER | ||
| Step 1: Needs | ||
| Description | Amount | |
| 1. Personal care items from drug store | $7.65 | |
| 2. Groceries from supermarket | $160.00 | |
| 3. Doctor visit co-pay | $25.00 | |
| 4. Rent | $400.00 | |
| 5. Utilities | $74.00 | |
| 6. Telephone | $20.00 | |
| 7. Student loan payment | $50.00 | |
| Step 2: Total Needs | $736.65 | |
| Step 3: Wants | ||
| Description | ||
| 8. Birthday gift for Mom | $45.00 | |
| 9. Meals eaten out | $9.20 | |
| 10. Concert tickets | $50.00 | |
| 11. DVDs | $26.50 | |
| 12. A second pair of sneakers | $90.00 | |
| Step 4: Total Wants | $220.70 | |
| Step 5: Expenses (Total Needs + Total Wants) | $957.35 | |
| Step 6: Total Monthly Income | $95.00 | |
| Step 7: Cash Flow (Income – Expenses) | (-$7.35) | |
The only difference between this example and Example 1 before it, is that this example includes an expense for a second pair of sneakers. After expenses (spending) of $957.35 are subtracted from income (money coming in) of $950, there is a shortage of $7.35 (a negative cash flow)!
If you’re spending more than your total income, you need to go back and look at your spending. Where can you reduce your spending? Start with your wants. Could you spend less on clothing? Could you eat out less often?
Some expenses will remain the same from month to month, such as rent payments. These expenses are called fixed expenses. Other expenses will change from month to month; these are referred to as variable expenses.
