Recording your expenses and income each month will allow you to understand what your real situation is. You will learn where the money is going and make the change that suits you on the way to financial independence.
- Summarize your average monthly expenses and income.
- Calculate the difference between expenses and income.
- Add to this calculation the repayments of debts (loans), and check what the total gap is, taking into account all your liabilities.
If the gap is negative, meaning there are more expenses than income, you live unbalanced and increase your debts every month. Multiply this average monthly gap by 12 (months) and find out what annual gap will accumulate if there is no change in your financial conduct.
If the gap is positive, you can save money every month to help you finance your future expenses.
Form for recording expenses and income - printable
Expense and income spreadsheet
