Spending plan

Spending plan
See also
Investment planning Capital campaign Planning negotiations Cash Budget Success criteria examples Policy statement Business plan Accounting process Financial planning

Spending plan is a plan focused on somebody's financial goals. This special document is designed to help understand current spending habits . It gives money a specific plan of action to follow, which includes plan to have a successful financial future .

According to Bridgforth G. a spending plan is not to limit spending but to identify what we need for a quality of life that has a sense of balance and well-being. It is a blueprint to help keep our financial house in order. Instead of tightening up and restricting ourselves, we approach this plan of estimated expenses and income with a sense of openness .

In the view of Bucci S. a spending plan puts you in control of your finances, allowing you to decide how much money to spend on stuff you want. A spending plan tells you just how much available cash you have to meet your obligations and allows you to set some aside to have fun, too .

Plan not a budget

As stated in The Guru Guide to Money Management we should try to avoid using the word "budget" and use "spending plan" instead.

Here is why:

• spending plan = a plan
• spending plan = something you create
• spending plan = something you can control
• spending plan = something flexible

A spending plan does not dictate how much you should spend or what you should spend money on. A spending plan puts you in control of your finances. It is not about deprivation; it is about making choices .

Sections

There are five sections of a spending plan:

1. Income
2. Taxes
3. Debts
4. Lifestyle
5. Savings

Constructing a spending plan

As stated in The Guru Guide to Money Management there are few steps to construct a spending plan :

1. Determine your average monthly income
2. Make a list of your expenses categories
3. Draft your monthly spending plan
4. Activate your monthly spending plan
5. Count and record
6. Rethink optionals
7. Prepare next month's spending plan.

References

• Bernard A. (2011)., The Puzzle: Putting Together the Pieces Toward a Successful Financial Future: Putting Together the Pieces Toward a Successful Financial Future Xlibris Corporation
• Boyett J., Boyett J. (2003)., The Guru Guide to Money Management: The Best Advice from Top Financial Thinkers on Managing Your Money John Wiley & Sons, Inc
• Bridgforth G. (2002)., Girl, Get Your Money Straight: A Sister's Guide to Healing Your Bank Account and Funding Your Dreams in 7 Simple Steps Crown Publishing
• Bucci S. (2014)., Credit Repair Kit For Dummies John Wiley & Sons, Inc
• Mercer Advisors Inc. (2019)., Special Raport: My Spending Plan The Science of Economic Freedom
• Towner D., Tofilon J. (2002)., Good Sense Budget Course: Biblical Financial Principles for Transforming Your Finances and Life Willow Creek Community Church

Footnotes

Author: Paulina Wolnik