The Spending Plan

A complete budgeting packet: important facts, clear worksheets, and simple step-by-step directions for creating a successful spending plan.The complete document is only available in the PDF file, because it contains worksheets.

Simple Steps To Financial Wellness

Did you know:
•  43% of American families spend more than they earn.
•  On average, Americans spend $1.22 for every dollar they earn.

(Source: http://moneycentral.msn.com/content/SavingandDebt/P70581.asp)

Can You Answer “Yes”?

In the last year, have you ever:
•  had an argument over money issues?
•  used one credit card to pay off another?
•  had difficulty keeping track of your bills or credit cards?
•  felt like you’re living paycheck to paycheck?
•  only been able to make your minimum monthly payment?

If you answered “yes” to any of these questions, you might be headed for serious trouble or you may at least be suffering from money management blues.  Fortunately, there is a cure – a good Spending Plan (otherwise known as budgeting).

What Is A Spending Plan?

A Spending Plan is simply a plan for how you will spend your money.  An effective Spending Plan is an important tool for creating and maintaining your financial health.  Through budgeting, you will clearly see what money you bring in (income) and where it is spent (expenses).  If you ever wonder where your money seems to disappear to, this plan will help you find the mystery leaks, plug the holes, and make choices that will help you reach your goals.

Why Make A Spending Plan?

A Spending Plan will help you:
•  gain control over your spending
•  feel better by relieving stress
•  be prepared for emergencies
•  get out of debt (and stay out)
•  start saving and build financial wealth

The PDF can be found here.

Starting Your Spending Plan

In this PDF file, you will find clear worksheets and simple step-by-step directions for creating an effective monthly Spending Plan.  As you fill in the forms, remember that your Spending Plan is flexible.  You can and should make adjustments as needed, so you may want to use a pencil for the worksheets.  If you prefer to use a computer (which can save you time by doing the math for you), you can get these resources online at  www.knowdebt.org.

The budgeting process is broken down for you into five steps:

  1. List your monthly Household Income – the amount of money you take in each month.
  2. List your monthly Fixed Expenses – payments on things you need each month in order to live (these amounts are usually the same each month).
  3. List your monthly Variable Expenses – payments onother things you need (but you have some control over the amount).
  4. List your monthly Optional Expenses – the amounts you choose to spend on any other things (including impulse choices and other wants).
  5. Make choices for Your Financial Wealth Action Plan– calculate your totals, understand your numbers, choose targets, and take actions to meet your goals.

For ease in preparation, a separate worksheet is provided for each step.

Dealing With Budget Barriers

Stuff happens.  Let nothing distract you from your goal. When you encounter an obstacle or a set back, remember it is only temporary – this too, will pass.  You should not be concerned about making adjustments to your worksheets or Spending Plan.  It is a natural part of the process.  It took Edison more than 1000 tries to get his lightbulb right.  If something doesn’t go exactly as planned this month – relax, you are normal.  Make the appropriate adjustments and refocus on your goals.  You will succeed!

Keep in mind the primary purpose of the Spending Plan is to help you spend less than you earn.  Be open to new ways to make that happen, especially when you encounter an obstacle. Living within your means is the keystone to financial wellness and future prosperity.