How to Create a Spending Plan

It's time to dream big, set goals and actually reach them.

A spending plan is not a budget. Why? Because a budget can be limiting where as a spending plan allows you to set a goal then adjust your plan as you more forward towards that goal.

Difficulty:Moderately Challenging
Instructions
things you'll need:
•Excel Spread Sheet (optional)
•Lined paper and pen


1. If you have no idea as to what you spend, start writing down what you spend on a small writing pad. Write the date and all the items you have purchased that day, even money you may have contributed. Whatever money came out, also write down whatever money came in. If you have an excel spreadsheet start in putting your information. You will want 3 months of numbers to work with. If you already have a system for yourself where you keep track of your money you will be able to take the money on your reports and place them into the upcoming categories in step 2.

Another way to tally up numbers is if you have kept your receipts; sort them by month and date. Prep them to use for Step # 2.

2. Make three (3) columns on paper and label them by month. In the first column , list on the left hand side all the way down the page the following categories:
- Spiritual (includes donations, self nurturing, self improvement, etc.)
- Rent
- Utilities (includes: electric, gas. Etc.)
- Auto ( includes: car payment, insurance , gas, repairs, permits, etc.)
- Food ( includes: eating in, eating out, snacks)
- Clothing (includes doing laundry, cleaners)
- Personal care
- Independent care (if you have kids or pets, et c.)
- Education
- Entertainment
- Personal Business ( includes postage to pay bills, computer supplies, etc.)
- Vacation
- Savings
- Debt repayment

3. Tally up your #'s or receipts to fit into the categories above for each month. You can use your bank statements as well, yet keep in mind you want to create a simple system for yourself that you enter your numbers consistently in some kind of format so you are not overwhelmed when working with your spending plan.

4. The numbers of what you have really been spending will be what you entered into each column. When you total up all the numbers of every row, you will get a total. Subtract that total from your salary after taxes. If you have some money left over great, if not you will need to look at where you can trim.

For some people, they may be spending in one area too much, such as food out or too many coffees. Sometimes even in personal care. One might be obsessed with buying hair products. Where ever there seems to be some over spending look into that area to make sure it is not escapism. If it is it may be a great idea to stop buying so many hair products and put that into vacation.

Tips & Warnings
•If you would like to know the average amount you spend either by category or on a monthly basis you divide all your totals by the number 3. For the average monthly expenses it would go like this: Jan - $1,313 Feb - $1,207 March - $1,345 Total all 3 months = $3,865 Divide $3865 / 3 = $1,288 $1,288 would be your average monthly expenses If you would like to break it down by category it would go as follows Personal Care Jan - $3.45 Feb - $43 March - $35 Total up all three months for the category of Personal Care Your total would be $81.45 Divide $81.45 / 3 = $27.15 $27.15 is the average amount you spend on personal care. What do you do with that information? You take $27 as the amount you will spend monthly on personal care. It is best to use $27 and not pinch, not deprive yourself. That is the average of what you spend so don't try to do less and to live within your means try not to go above. Yes you could pinch and do without, yet it is best to take care of yourself and not deprive yourself, and it has been my experience if you want spend more than you have to earn more. There is no real way of getting around it.