Helpful Financial Tools to Gain Control of your Money

We all need helpful financial tools from time to time. No matter who you are, living a simple, happy, productive life usually means you are dependent on at least a small source of money. Even volunteers and missionaries have to eat, and are therefore dependent on donations or some other form of income.

For most of us, it seems our money runs out long before the bills do. It can be frustrating at best, and the source of nightmares at its worst. Our goals are to have enough income to cover all the bills, yet still have enough left over to save for rainy days and to have a bit of fun.

But what do you do? How do you stretch your dollars far enough to pay the bills, yet not so far that it snaps back and leaves whelps on your hands and face? Where are the helpful financial tools when you need them?

Financial management in its simplest form is knowing where your money is coming from and where it is going. It is a way of gaining control of how your money is earned and spent. If your income level is lower than your expenses, then you have two options: increase your income or lower your debt. This is where having helpful financial tools come in handy.

helpful financial tools to gain control of your money

Helpful Financial Tools for Keeping Track of Your Money

One of the first things you need to do to begin tracking where your money is coming from and where it is going is through a budget. A budget is basically a worksheet where you list an estimate of any money you have coming in (income) and any money you have going out (expenses).

You may be asking why a budget is based on estimates.  Where income is concerned, there are some cases where you may not be certain of exact amounts.  This usually happens when you are paid by an hourly rate, or one of the sources of income is part time or as needed.   

The same thing happens with certain bills, such as utility payments.  These are based on monthly usage and are usually different each month. Credit cards are another example, especially if you pay them off each month. It will depend on how much you charge as to how much you pay.

The second thing that helps you track your money is an Income & Expense Worksheet (IEW). Where a budget deals with estimates, your IEW tells you exactly how much you spend in each category. It is also more detailed than your budget.

For example, your budget may allow for Entertainment as a general category.  Your IEW will break Entertainment down into specific areas – dining out, movies, sporting events, etc.  By having more specific breakdowns of each category, you have a better idea of where your money is being spent.

Why do you need both of these helpful financial tools? Easy. A budget tells you at a glance how much you need each month to get by. An Income and Expense Worksheet tells you how that money is spent in more detail.

helpful financial tools to gain control of your money

Why Use a Budget as a Helpful Financial Tool?   

Budgets are actually one of the most helpful financial tools, and is something we all know we need to have. But actually drawing one up and maintaining it on a monthly basis can be a nightmare for those who hate numbers. We would rather live in financial LaLa Land instead of having them staring us in the face.

But working without a budget can be detrimental to our financial health. We usually have a rough idea of how much our income is each month. But do you know how much goes out? Do you know what for?

Even a utility bill changes from month to month. Without a budget, it is difficult to plan for the future. Unexpected expenses, such as car repairs or appliance replacements can occur. Not planning for those costs can cause late payments on other bills, which just drains your available income faster.

Late fees can quickly become a vicious cycle. Most companies charge 5% to 20% of the bill when it passes the due date. When you add up all the late fees, you could almost – if not completely – pay another bill.

Having a budget gives you control over your finances. You will know where your money is coming from and where it is going. It helps you to quickly find ways to decrease your spending, and ways you can save more for your future. It can also lower your stress level due to financial worries.

helpful financial tools to gain control of your money

Budget vs Income & Expense Spreadsheet – Both are Helpful Financial Tools

Budgets are very personal and helpful financial tools. Each one will be different, and can be as simple or detailed as needed. My Mother’s budget won’t work for me, as we have different income and expense levels. My budget won’t work for you, as our income and expenses are not the same.

Even so, most budgets are roughly the same, yet is still one of the most helpful financial tools you can have. Each one can be customized to each individual’s needs. And they all start with the same basic premise – Priorities.

A budget is simply an estimate of your income and expenses. Your utility bills are rarely the same from month to month. Electricity can vary as much as $100 or more, depending on the temperatures outside. The loss of a job, overtime, or a raise in pay can affect the amount of income.

This is where one of your other helpful financial tools comes into play – the Income and Expense Worksheet (IEW). An IEW is where you write down exactly how much income you receive (and from where), and the amount of money you spend.

It can also take your budget to a deeper level. For instance, if you have an ‘Entertainment’ catch-all category in your budget, your Income and Expense Worksheet will have it broken down into Movies, Restaurants, etc.

An IEW is one of the helpful financial tools that will also help you to create a new budget each year. Using the example of an electric bill, you will be able to adapt this year’s budget to last year’s expenditures just by looking at the category on your IEW.

The beauty of an IEW is that you can also keep track of ‘extra’ income. You can keep a record of money received from the sale of items, gifts, and extra jobs. On the flip side, you can add a Gift category, and know exactly how much you spent on birthday, wedding, and Christmas gifts each year.

Keeping an itemized record of all your spending also comes in handy when you are faced with a serious drop in income, such as loss of a job, or unexpected medical expenses. Knowing how much is spent in each category can help you quickly find areas where you can cut spending or eliminate it all together. Having helpful financial tools can make this task much easier.

And having an IEW may just be one of those helpful financial tools that opens your eyes. You may not realize how much money is being spent in small, almost hidden ways. Once you find out exactly where all of your money is going, you can quickly make changes and find other alternatives or eliminate those spending habits once and for all.

Home Budget Worksheet

Setting up your Budget

There are a few other helpful financial tools you need before you start filling in the blanks on a new budget. Start with paper and pen, and make a list of any income you have and the expenses. 

If you know the amounts, then jot them down next to the item.  If you don’t, then look up the bills you paid for the corresponding month in the previous year. That gives you a good place to start.

Next, you need to determine what your priorities are. Priorities come in two levels – Priority 1 and Priority 2. Everything else spent falls into what I call ‘Secondary Expenses’, and even that is broken down into two levels.

Priority One

Bills that fit under the Priority One level include things that are necessary for our survival, or required to make an income in the first place.  They include things such as Rent/Mortgage, Utilities, Food, Clothing, Transportation (loans, gas, maintenance, etc.) and tithing.   

Priority Two

Just because these items are a Level Two, does not mean they are not necessary or equally important. You still need them – but not having them isn’t quite as detrimental to your health and income. Most are recurring payments, and need to be paid every month to protect your credit rating. This level includes Insurance, Child Care, Telephone, Credit Cards, Loan Payments, and Savings.

Secondary Expenses

Any expenses that are not classified as Priority One or Two fall into a Secondary One or Two category. These are items that we ‘think’ we need, are wants, or are just for fun. Although these items are wonderful to have, they are also some of the first things that can be eliminated in a financial crisis.

Some examples of the Secondary One category are:

  • Higher Education
  • 2nd Home/Land
  • Equipment/Supplies
  • Computer Software/Downloads/Courses/Workshops/Subscriptions

Your Secondary One category tends to lean more towards goals and dreams for your future, rather than maintaining the health and well-being of your family. Do NOT think they aren’t worthy expenses. In most cases, any dream or goal that is designed to further your education or help you to reach the person you want to become or the lifestyle you dream of having, needs to be added to the budget.

Any Secondary Two expenses are considered ‘wants’. They are the extras, and therefore not really necessary. In my case, that would be books, crafts, and magazines for entertainment purposes only. I confess to a love for reading and creating with my hands, and would spend most of my money in that category. But to preserve the income I have, that category is the first one that gets eliminated when our finances get tight.

(Disclaimer: I do spend money on crafting when it comes to handmade gifts. This often is a great way to reduce spending in the Gift category!)

When you set up your budget, you need to be completely honest with yourself. You already know exactly what you need to survive, but that gym membership won’t put food on your table.

Easy Home Income and Expense Worksheet

Keeping Track of the Details

A spreadsheet program such as Excel is a perfect way to set up your budget and IEW. You will be able to add and remove categories, items and any information easily.

With helpful financial tools such as a spreadsheet program, you can also add an ‘At A Glance’ chart to give you an idea of which categories are highest. You can use pie or bar charts to show you which categories are costing you the most. This also comes in handy when you are looking for ways to cut expenses.

To help you fill your toolbox with helpful financial tools, I have already done the hard work for you. You can find a ready-made Budget and Income & Expense Spreadsheet, complete with a chart ready for you to use. All you have to do is adjust the categories to your needs, and start filling in the amounts! You can find them here:

Home Budget Worksheet

Home Income & Expense Spreadsheet

(Note: These worksheets have been created in Excel. If you do not have Excel, you can download a free version of Microsoft Office 365 here!)

simple life dollars and sense ebook

Are you ready to gain control of your Finances?

Use the tips you just learned as helpful financial tools to set up your Budget and Income & Expense Worksheets.  Once you do, you will know exactly where your money is coming from, where it is going, and find ways to cut back when times get tight. 

To find even more helpful information on budgeting and gaining financial control, let Simple Life Dollars & ‘Sense’ help!  It is an eBook designed to get you started on your money management skills.  This eBook takes you from setting up a work space all the way through to finding extra income and easy ways to cut expenses, and so much more. It could easily be one of the most helpful financial tools in your money management tool box!

For even more helpful information, be sure to read these posts!

Make a Choice

Gain Control – Get Organized with Notebooks

Basic Finances for Homemakers

Don’t forget to sign up for my newsletter! When you do, you will get a FREE set of the Table of Contents you need to get your Notebook system started!

Julie Murphree is a blogger, newspaper columnist, and speaker on all things ‘Living a Simple Life on the Farm’. She is the author of \\\'The Farm Wife – Living a Simple Life on the Farm. She and her husband have 60 acres in NW Louisiana where they actively work on living as sustainable as possible.

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