The task of creating my own Income Statement has been one of reflection. I have realised that as a family we spent a lot of money at the V8 Supercars when they came to Townsville and we also spend a lot of money on groceries each month. I feel lucky in the fact that there are two wages coming into our household so that we can enjoy life every now and then. I would like to continue tracking our income and expenses regularly in this way, although time will be a huge factor.
The example provided for the chart of accounts is detailed with income and expenses and is easy to follow. Each category is something that each of us would use in our own chart of accounts. My own chart of accounts is similar to the example shown although I have a few more categories in my chart.
In the example shown, the credit card payments could be broken down into each individual transaction to display what expenses have been purchased. It might not always be general living expenses paid for on the card. There could be credit card interest fees or other expenses included.
The income statement I have created can be used to analyse which expenses are too high and areas that, as a family, we can cut back on our expenditure. I have found this useful as I will be more mindful and organised when it comes to grocery shopping. I also feel that we shouldn’t go to the V8 Supercars every year. Then we might be able to save enough for our house renovations that have been ongoing for 6 years.
I didn’t find any transactions that would be accrual based. A transaction that could be accrual based, for example life insurance, could be broken down into monthly figures instead of the full amount in one month only.
A very valuable lesson I learnt along the way was to save any downloads from the bank as an excel file. It was third time lucky after I downloaded as a csv and proceeded to work on the file for my Step 4. Needless to say I was not happy when the file didn’t save the work I had created!!
My Income Statement is attached for your enjoyment!
Mandy's blog 