Spending Plan
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     Most people spend 40+ hours a week working on their jobs.  The amount of household indebtedness they carrry is suffocating them.  Yet they continue hoping that one day they will be able to retire and enjoy the rest of their lives.  They spend downtime thinking about the places they want to go and the things they won’t to purchase with no real plan on how to get there.    The money that you are paid on your job is the same money that can make all of your dreams and goals come true, but you must tell your monies that.  If you are not in control of your finances then unfortunately your finances are in control of you.

      To begin taking control of your finances; develop a spending plan.  This must begin with an accurate account of your household indebtedness.  Most people are accustomed to calling a spending plan a budget, but I have found over the years that people identify a budget with something negative.  A budget is looked at as a tool to take something away from our lives.  A spending plan is a map of how you are going to spend your money, reach your financial goals and become a debt free you.

     The steps that you need to take to develop a spending plan are very simple and easy to manage.  Although it does require some work, the end result will change the way your money takes care of you from now on.

1.       Track your spending.   Before putting your spending plan together you have to know where and how you are spending your money.  This will be accomplished by tracking your spending.  Purchase a small pocket sized notebook that you can carry with you at all time and write down everything you spend money on.  This would include ATM receipts, gum, tips, etc.  Another method is to keep copies of all of your receipts and write them down at the end of the day.  You need to track your spending for at least a month and at the end of the month review your tracked spending.  If you are married both of you should track your spending and at the end of the month exchange books and discuss where and how money is spent and what steps you can take to cut expenses.
2.      Prepare spending plan based on tracked spending.  There are numerous financial software packages out there to assist you in this endeavor or you can simply go online and find a spending plan template.  In this plan you should list all expenditures fixed and variable throughout the month.  An example of what should be included is listed below:




Eating Out


Cell Phone/Home Phone



Car Insurance

Life Insurance


Vehicle Expenses (Gas/Maintenance)

Haircuts/Beauty Shop


Child Support


Misc(Gifts, Stamps, etc.)


Church Tithes

Vehicle Payments

Credit Card Debts


Student Loans


      Remember, this is just an example of a spending plan.  Yours can be formulated in whatever order you would like.  Just make sure you cover all of your expenses.  Once you have listed all of your expenses add them up.  This will give you your Monthly Living Expense

  1.  Make spending cuts.  Once you have put your plan on paper or on your computer look at all the expenditures and based on your goals, look at areas where you can cut back.  The two areas that are often found to have overspending are eating out and entertainment.
  2. Review plan monthly.  Your spending plan is a living document.  It will change as your income changes or as debts are paid off.  If you are married sit down together and discuss the plan and make sure that it fits both of your needs.
  3. Start Emergency Fund.  Experts say that families now need 6 to 9 months of monthly living expenses in a savings account for emergencies. This is because it is now taking 6 to 9 months for people to find a job once they are unemployed.   You will know how much your monthly living expenses after completing your spending plan.  This should be one your first goals after putting your plan together.

     By following these steps you will be on your way to developing a great spending plan and making all of your financial goals come true. Remember the goal of becoming a debt free you begins and ends with a plan.  A little time invested today is a surefire way for you and your family to be provided with all the necessary tools for financial success.  By dissolving your household indebtedness and making spending cuts you will not only reach your retirement goals, but you will also have learned valuable life lessons that can be passed on for generations to come.