Spending plan

I love personal finance. I get a thrill from writing down expenses vs. income and making it all work. I write it all out every few months.

I hate budgeting. Do you hate budgeting? A budget is a limit on your spending. There is nothing worse than being told you can’t have something, right? Give up, blow your money on knick knacks at Ikea and fast food weekends because you forgot to think ahead.

Yeah, this was so me for years and years. I would write up a budget, my food budget was $100 a week. I would go the store and buy $120 worth of groceries. I couldn’t put something back, I needed all those items. I’d give up because my food budget was blown, my husband spent $30 on movies and the whole thing was a wash.

Except we weren’t getting ahead. We were not getting further in debt, but we weren’t saving a whole lot either.

There is a middle ground, where you can control yourself, but still feel like you get to spend (almost) whatever you want.

Enter the spending plan.  Take your income and subtract your fixed expenses: housing, vehicles, insurance. All that boring stuff that makes your world go around. We can’t do much about those.

Then you have your variables, the things you can control. You can spend $100 on data a month or you can get a barebones phone and have 50 minutes and 50 text messages a month. (We have the latter, but that’s me if your priority is internet anywhere, get the coolest phone on the planet and the highest plan available and go for it. Just realize the trade off is, you will have to cut back else where. Oh …).  You can also choose to eat out five times a week, or you can meal plan for the next 30 days and keep to a strict schedule. Again, it’s up to you.

If you are visual person, it might be more interesting for you to get some play money and a big sheet of paper (or you can use some masking tape to divide up your table). Divide the paper into all the categories you need. Food, gasoline for your vehicles, phone and internet, satellite TV, energy for your housing. Whatever it is you pay monthly.

If you are like me, you’ll have your categories in a spreadsheet or on paper and plug the numbers in and see what you can come up with. You will have your priorities. Maybe you like to spend on your children and you’ll throw a bit of extra money that category. Don’t forget a free spend allowance for everyone ADULTS included.

Once you’ve decided what exciting things you’ll spend your money on, write up a good copy. I suggest a weekly or every 2 weeks budget. I keep mine inside  a cabinet in a sheet protector taped to the inside.

here’s ours for a week:

Food $150

gas $50

My allowance $40

Husband’s allowance $20 (he has a fixed budget for cigarettes which is 5 times my allowance. Told him he needs to quit!!)

Clothing $20

Entertainment $20 (this is mostly for eating out)

and so on. I do mine in increments of $20 because I get my cash from the ATM.

Then you have an envelope for each category. Or you can have a jar. And you divide up the money, put it in a spot where no one will steal it out from you. And when an expense comes up, you have the cash. Right now, I am saving up for a vase for a spot in my kitchen that is empty. Since my house budget is only $20 a week, I have to save up a couple of weeks worth of money before I can buy one. That is totally fine, because I haven’t found one that screams at me yet.

This exercise is especially good if you have some extra money coming in. Decide before it gets into your sizzlin’ bank account what  you will do with the money. It’s like expecting a gift, because you know what it’s going to do for you already.

Have you avoided a budget because it’s limiting? Or have you gotten a strict budget set up that you follow to the penny?

How do you implement it?

decide what you are going to spend your money on, including what you are saving money for. and then spend it!


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2 thoughts on “Spending plan

  1. Very smart! If more people would go through an exercise like this, we wouldn’t have the credit card debt that plagues our society! I’ve done this sort of thing before, but it’s a bit looser now. No CC debt here. And yes, smokes add up to some serious $$! My husband quit a few months ago – if he can, anyone can! Good luck with yours!

  2. i lover playing with personal finances and excel. oh yeah — it’s fun. i’m working diligently to pay off my house. i have al ong way to go but you can find me the day before payday madly calculating how much i have to pt in to get it paid off by….too funny.

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