Meeting your needs is at the core of most successful spending plans or budgets because it ensures your healthy relationship with money.
Here’s How To Create A Spending Plan
Step 1: Gather What You Need
Step 2: Create your Income and Spending Categories
- Add up the amounts in each expense category.
- Add up the totals for all the expense categories.
- Total the amount in your income category.
- Subtract the total expense from the total income.
So, does your spending plan work? Is it balanced?
When you have more expenses than you do income, there are two questions you must ask:
- Can I bring in more income, and
Can I reduce my expenses?
Go back to your categories and subcategories and find places you can reduce your budget.
As you work your spending plan, certain emotions may surface for you. Maybe you’re angry at your circumstances? Or possibly you don’t like the idea of having to delay gratification because you can’t afford it? This is all a normal part of the process we all go through. Realize you won’t be here forever and that sooner rather than later, you’ll have more disposable income available because your debt will be paid off and you’ll be using other techniques to fill your needs instead of shopping.
- You’re not sure how much to allow. This is more than likely due to a lack of tracking your expenses long enough to have a full picture of how much you spend in a particular category. Over time you’ll get better at this.
- Something happened that you did not anticipate. Maybe someone passed away, and you needed to send flowers. Or a family member was ill, and you needed to take time away from your job to care for them.
- You spent impulsively and veered away from your plan. It’s important to use the resources I’ve supplied for you here in this challenge to prevent impulse spending and to find healthier ways to fill your needs that don’t require you to spend money.
That’s it. That’s the steps you need to take to develop your monthly spending plan and stay connected to it!