Planning your spending helps you manage your money more effectively.
Define Your Goals
Getting your goals down in black and white helps you focus on what's really important to you. Nothing is too trivial or too fantastic, at least in the initial planning stages. And creating a complete list of what you'd like to be able to afford in the future will probably help you clarify your priorities.
Making a Spending Plan
A spending plan will help you save more, be able to afford more of the things that are important to you, and get your spending under control. You need to analyze your expenses and where you are prioritizing the money you are spending. Then make a plan for how you'll spend your money in the future.
To help get started, think about the answers to the following questions. It might help to write down your responses.
- Which expenses are essential and which ones have to go, at least for now?
- Can any of the essential expenses be reduced?
- What's a realistic reduction?
Beginning your spending plan:
- First, list all of your Fixed Expenses.
- Second, project your spending on your Variable Expenses. This may mean looking for bills to average out what you have previously spent. If you have signed up for electronic notification or statements you should have a 12 month history saved online.
- Finally, designate amounts to all of your incidental expenses. This is where you should give yourself a realistic figure that will work for you. Start with your priorities and work your way down.
- Enter your information, save it, and come back to it to make changes. Remember, a budget is a work in progress and you may need to make updates periodically. A more detailed monthly budgeting worksheet can be downloaded to help you track your monthly income and expenses.