Tracking Income & Expenses: Tips for Work at Home Moms
Juggling parenting, household duties, and a business from home is no easy feat. Add the challenge of keeping track of your income and expenses, and the stress can quickly pile up. But with the right system in place, managing your finances doesn’t have to be another source of anxiety.
Knowing exactly where your money is coming from and going to each month is essential to keep your home working financially successful. This applies to anyone working from home or running a home business!
Why Tracking your Income & Expenses is vital
1. So you don’t miss a payout
With multiple projects and clients, it’s easy for payments to slip through the cracks, especially when some invoices get delayed or, worse, overlooked completely. By consistently tracking your income, you’ll ensure you never miss a payment and always know exactly where your money is coming from.
When I first started working from home, I had lots of different projects on the go at once and it was hard to keep track of what I was owed and when. I’ve had more than a few close calls where I almost missed following up on an unpaid invoice, which could have left me out of pocket. That’s why I quickly realized the importance of tracking my income consistently—no one else is going to make sure you’re paid on time but you!
2. To set a monthly budget for your business
When I started working from home, I didn’t pay much attention to budgeting. I figured as long as the money was coming in, I was fine. But a few months in, I realized I was almost spending more on subscriptions, tools and courses than I was earning. It was a wake-up call!
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.
Of course, this may not be the case in the beginning stages of setting up a new business, but as time goes on you’ll be wanting the earning to spending ratio to lean more towards profits than spending!
Tracking your finances enables you to see exactly how much money is coming in and going out. This means you can create a budget that helps you from spending more than you earn, and inspire you to be creative and find ways to keep the running costs down and profits higher.
3 . To reinvest in your business
- When your income grows, consider reinvesting in tools or services that improve efficiency (like outsourcing or upgraded software).
- Track income trends to decide the best times to scale your expenses without cutting into profits.
4 .To make tax time easier
Handling taxes as a self-employed mom can be tricky, but keeping accurate records throughout the year makes the process much smoother.
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.
Tracking Income and Expenses
Step 1: Set a Regular Time for Tracking Finances
Make financial tracking part of your weekly routine. Consistency is key, so choose a time when you’re least likely to be interrupted—early mornings, late evenings, or during nap time can work well. Schedule 15–30 minutes to go over all incoming payments and expenses.
Tip: Set a reminder on your phone or calendar to prompt you each week. The more consistent you are, the less time it will take to stay on top of your finances.
Step 2: Use a Simple Spreadsheet Template
Create a Google Sheet (or Excel, if you prefer) that’s dedicated solely to tracking income and expenses. A basic spreadsheet with columns for date, source of income or expense, description, and amount is all you need to get started.
Tip: Start with simple formulas like =SUM
to total your monthly income and expenses automatically. As your financial tracking grows more complex, you can add additional features like automatic totals for each category or a running balance.
Step 3: Categorize Your Income and Expenses
Tip: Google Sheets is a powerful, tool for organizing your finances, and it’s been an game-changer for me! It’s simple, free, and incredibly convenient. I also love that Google Sheets saves automatically to the cloud, so even if my laptop crashes, my records are safe.
Set up two tabs—one for income and one for expenses—and use formulas like =SUM
to total each category. This will give you a quick view of your monthly earnings and spending. Plus, Google Sheets syncs across devices, so you can track your finances from your phone, laptop, or tablet.”
YouTube tutorials can show you how to create automatic calculations and pie charts that visualize your business performance at a glance.”
Categorizing income and expenses helps with getting a clear picture of where your money is going. In your expense sheet, use common categories to avoid confusion and help you plan better.
Income Categories:
- Freelance work (separate by client if possible)
- Product sales (if you sell items online, like Etsy or eBay)
- Affiliate marketing or ad revenue
- Digital product sales (eBooks, courses)
Expense Categories:
- Software subscriptions (e.g., design tools, accounting software)
- Equipment and supplies (e.g., laptop, craft materials)
- Business services (e.g., virtual assistants, graphic designers)
- Marketing and advertising (e.g., Facebook ads, sponsored posts)
- Shipping costs (for product-based businesses)
- Internet or phone bills (for partial deduction if business-related)
Tip: If you work across multiple income streams, create individual categories for each. This will make it easier to analyze which areas are most profitable for your business.
Step 4: Record Income and Expenses Daily or Weekly
The key to staying organized is keeping up with your entries regularly. Try to log income and expenses as soon as they occur to avoid forgetting important details.
Daily Recording:
- Enter any payments received for completed work, sales, or services.
- Add any expenses incurred, whether it’s an online subscription renewal, material purchase, or shipping fees.
Weekly Review:
- Check all your income sources—freelancing platforms, PayPal, direct transfers, etc.—and make sure they match the payments you’ve expected.
- Compare your expense tracking against your bank or credit card statement to ensure accuracy.
Tip: Save digital copies of receipts and invoices in a designated folder (preferably in the cloud, like Google Drive or Dropbox). Attach the link or note to each transaction in your spreadsheet for easy reference.
Step 5: Cross-Check Your Bank and PayPal Statements Monthly
At the end of each month, take a few minutes to reconcile your income and expenses with your bank, credit card, or PayPal accounts. This ensures no transactions were missed and all amounts are accurate.
How to Reconcile:
- Open your bank statement, PayPal account, and any other accounts where you receive or send payments.
- Compare each transaction on the statement with your spreadsheet. If everything lines up, you’re all set!
- For any discrepancies, investigate right away—sometimes payments are delayed, or expenses can appear twice.
Tip: Download your statements each month and keep a folder specifically for business finances. This will be incredibly helpful when tax season arrives.
Step 6: Set Financial Goals and Monitor Progress
Tracking income and expenses isn’t just about maintaining order; it’s also about growth. Once you’re in the habit of tracking, you can use this information to set financial goals and make better business decisions.
- Analyze Patterns: After a few months of tracking, you’ll begin to notice trends in your income and spending. Are there certain months when business slows down? Do you notice that some clients consistently pay late? Use this data to plan your work schedule and budget more effectively.
- Set Profit Goals: Once you know how much you’re earning and spending, you can set realistic financial goals. This could be increasing your monthly profit by 10%, cutting down on unnecessary expenses, or reinvesting in your business with extra funds.
- Plan for Taxes: Keeping track of your income and expenses all year makes tax time less stressful. Aim to set aside a percentage of your earnings for taxes each month (based on your local tax laws), so you’re never caught off guard by a big bill.
Tip: Create a graph or pie chart in your spreadsheet to visualize income vs. expenses each month. This can provide a clear, visual snapshot of your financial progress.
Step 7: Use Technology to Make Tracking Easier
If spreadsheets aren’t your thing or you want something more automated, consider using apps or tools designed for small business owners. Options like QuickBooks, FreshBooks, or Wave are great for tracking income and expenses with minimal manual input. Many of these tools can sync with your bank account and automatically categorize transactions.
App Options:
- QuickBooks Self-Employed: Great for tracking expenses, mileage, and preparing for taxes.
- FreshBooks: Ideal for freelancers who need to track income and create professional invoices.
- Wave: A free option for small businesses to manage invoicing and expense tracking.
Tip: Even if you prefer using a tool like QuickBooks or FreshBooks, keeping a simple spreadsheet on hand as a backup is always a good idea. Technology glitches happen, and having your records in multiple formats can save you headaches later.
Step 8: Reflect and Adjust
At the end of every quarter (every three months), take some time to reflect on your financial records. Did you meet your income goals? Are there ways to cut down on unnecessary expenses?
Adjust for the Future:
- If certain clients aren’t paying on time, you might need to tighten your invoicing terms.
- If expenses are too high, look for areas where you can cut back without sacrificing quality.
Regular reflection and adjustments will keep your business growing in the right direction.
Schedule some time to check your incoming and outgoing payments at least once a week. It’s helpful to do it daily, but if you’re short on time, once a week will work. A lot of work at home moms have multiple income streams, so you want to make sure everything is properly tracked.
It’s also helpful to note down when each income source will pay or when invoices are due. If you have any type of planner or content calendar, whether digital or physical, make a note of those days and check up on it when your payouts are due.
A lot of programs typically pay once a month, so these will be easy to remember. Other platforms will pay within a day or so of you making a sale. These kinds of payments are where daily tracking of income becomes so important.
Each month you can go back and look over your bank and PayPal accounts to make sure you have tracked all your income accurately. Don’t leave it any longer than that, or you may miss the payment window and be in danger of not getting paid at all!
I wish I had started tracking my income and expenses sooner—it would have saved me from so much stress and confusion. Don’t wait until tax season creeps up or until you’re overwhelmed with receipts and unpaid invoices. Start small, even if it’s just jotting down your income and expenses in a simple Google Sheet. Trust me, you’ll feel so much more in control of your business.