Subtract Your Expenses from Your Income — Do You Have a Surplus or a Deficit?

Once you’ve recorded all your income and expenses, it’s time to do the simple but powerful math: subtract your total monthly expenses from your total monthly income.

This step reveals one key truth — are you living within your means, or are you overspending?

Here’s how it works:

• If your income is greater than your expenses, congratulations! You have a surplus — extra money you can assign to savings, debt repayment, or giving.
• If your expenses are greater than your income, you have a deficit — and you need to take action right away to avoid going into debt or falling behind.

Even if you have a surplus, don’t stop here. This is your chance to optimize how you use your money.

Spotting Unnecessary or Hidden Expenses

Many people don't realize how much they're leaking money in small, overlooked areas.  Here are some questions to help you identify unnecessary or hidden expenses:

• Are you paying for subscriptions or memberships you no longer use (like streaming services, apps, or gyms)?
• Are you eating out or grabbing coffee more often than you realized?
• Are there automatic renewals or charges on your accounts that you’ve forgotten about?
• Are you overpaying for services like insurance, internet, or phone plans because you haven’t shopped around for a better rate?
• Are you making impulse purchases that don’t fit into your plan or add lasting value?

Ideas for Cutting Expenses

If you’re facing a deficit or just want to strengthen your surplus, cutting back doesn’t have to feel like punishment — it’s about aligning your money with what truly matters to you. Here are some practical ways to cut expenses:

1. Review and cancel unused subscriptions — check your bank or credit card statements carefully.
2. Cook at home more often — even replacing two or three takeout meals a week can save significant money.
3. Set spending limits for categories like clothing, entertainment, or personal care.
4. Refinance or negotiate bills — call your providers for insurance, internet, or cell service and ask for better deals.
5. Use a shopping list when you go to the store to avoid impulse buys.
6. Delay big purchases — wait 24–48 hours before buying to see if you still want or need the item.
7. Switch to generic or store brands — often the quality is the same, but the price is much lower.
8. Cut back on “convenience” spending — coffee runs, snacks on the go, or delivery fees add up fast.

Final Check: Assign Your Surplus

If you end up with a surplus after cutting expenses, be intentional about where it goes:

• Build an emergency fund.
• Pay down debt.
• Increase your giving or generosity.
• Boost your savings or investments.

If you have a deficit, keep trimming and adjusting until you get your budget balanced — living beyond your means is not sustainable long-term.

Remember, the Virtuous Living Planner by Lisa Michele is designed to help you track your monthly income and expenses with ease!

Your Sister in Christ

Lisa Michele

Creator, Virtuous Living Planner

www.virtuouslivingplanner.com