Lesson 3 - Statements and Budgets - Part 9

Expenses

Now that we know the Income portion of our Income Statement, let’s look at the Expense side. Expenses are simply what we spend, or cash outflows. This would not include such things as Investments because we are hoping to get the money back and more. When we have a mortgage payment, it might be wise to separate out what we paid in principal and interest. This will be important for Tax purposes later on.

In most cases the Income portion of our Statement will be much smaller compared to our list of Expenses. We have tried to list as many expenses that you might encounter.

We hope you see that just about everything we spend money on needs to be listed in our expense, based on categories to keep it simple.