Forget The Budget - Create A Spending Plan

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Does the idea of making a budget make you cringe? Instead, try developing a spending plan for money management.

What is a spending plan and how do you go about making one? Well I am sure you have heard of the word budget, but how many times have you considered making one only to feel turned off by the idea? What if I told you the secret of a budget is to turn it into a spending plan which reflects your circumstances and needs and is tailored to your specific financial situation. Taking control of your finances is a very empowering task and does not need to be complicated or overwhelming.

The first step in creating a spending plan is to document all your current spending. This can very simply be created by keeping all your receipts and putting them in an envelope or folder. Total up expenses by category and create a written summary of your expenses. By analyzing where your money is currently going, you can develop a road map for future spending choices. Your spending plan can be written in a notebook or may be developed using financial software. The essential elements of a spending plan include a specific item with a specific amount. A spending plan can be created for any time period, event, or topic. For example, you may wish to create a spending plan for your wedding, the money of February, or your child’s birthday party. A great spending plan offers flexibility and is not rigid, but maintains overall financial balance.

A well developed spending plan is the foundation of balanced money management. Once you have designed your spending plan, putting it into practice can help you reduce and eventually eliminate your debt by paying off your credit cards and student loans, save money for emergencies, and provide for future retirement needs. If you are living on a fixed income, a spending plan will ensure you use your resources wisely. If you are not made of money (and who is) careful attention to the details of your finances can maximize the money you do have and give you peace of mind. A first step in money management is the creation of a spending plan you can live with.         

Visit for ideas on money management including budgeting, insurance, investing, debt consolidation, and retirement planning.


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D. Tuetken

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