Accounting Skills Every Mom Needs to Plan a Budget

Tuesday, December 13, 2016

Accounting Skills Every Mom Needs to Plan a Budget

Moms wear many different hats. They have to manage their household, which involves being a doctor, a mediator, a chauffeur, a chef and even an accountant. To keep a household running, the accountant job becomes very important. Budgeting funds is essential to ensuring that all bills are paid, food can be bought and emergency expenses are able to be handled. With that in mind, here are three accounting skills that can come in handy for a mom.

Expense Tracking

In order to set up a proper budget, a mom has to be able to track all expenses. This includes regular bills, food, car related costs, clothing and any extra expenses. All expenses should be listed out. Because expenses may not all be due monthly, it can help to create expense lists for weekly, monthly, bi-annually and annually.
In order to create an accurate expenses list, though, all expenses must be tracked. Tracking bills can be easy, but tracking other expenses, especially those that do not occur regularly, can be tricky. It may help to gather receipts for a period of time and use them help with expense tracking.
It is also helpful to take a cue from accountants. Moms can use accounting software or methods to track expenses, such as a balance sheet or cash flow statement. Click here to learn more about modern accounting practices.

Balancing Revenue and Expenses

The whole point to a budget is to balance expenses and revenue. After tracking expenses, a mom should then create a budget. This involves listing all income and expenses. Then expenses should be subtracting from the income. If the sum is positive, then the budget is balanced. Extra money could be used to start a savings account or emergency fund.
If the sum is negative, though, it means the budget isn’t balanced and there are more expenses than income. This requires some changes in expenses. This is when those accounting skills can come in handy. A mom should go through all expenses and see where cuts can be made. Enough cuts should be made for the total of income minus expenses to be zero or more.

Tax Planning

Even if a mom isn’t doing the family taxes herself, she still needs to gather all the required documentation. This isn’t as difficult as it may seem, and moms don’t need an MVU Online degree to do it. In fact, there are actually software programs that can be used to track important tax information.
Basically, though, what a mom will need is any check stubs or income statements from a business. Family social security numbers are also needed. Finally, any expenses that will be written off will need to be backed up with receipts. All of this information should be stored in an easy to access location and organized so it is easy to use it to complete taxes each year.
Moms have to handle a lot of stuff to keep a family on track. When it comes to finances, moms take on the accountant role to ensure that all needs are meant and finances are kept under control.