Developing your monthly spending plan is a good money habit because it gives you a crystal clear picture of how much money you’ll spend each month but keeps it flexible enough to allow for changes to circumstances.
With a spending plan, you’re accounting for expenses and items you wish to buy and to ensure you will have the funds available BEFORE you make the purchase or pay a bill.
You’ll need to develop your spending and income categories and subcategories, evaluate if it will work, carry out the necessary adjustments, and review and tweak it throughout the month. At the end of the month, you’ll do a month-end review.
At some point, you’ll even be ready to develop an annual spending plan!
Creating a monthly and yearly spending plan will take some time, particularly in the beginning. Once you’ve gotten the hang of it, your spending plan will take care of you and guide you and keep you on the course you’ve established for yourself, ensuring your financial stability.