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B The Spending Plan Worksheet Made Easy
To learn how to build and use your Spending Plan Worksheet, follow one family’s successful example. Dave and Marie are an average couple. They have three children and like everyone, they’ve got responsibilities, goals, and needs. However, their personal finances were somewhat out of control. They had not come up with a system that consistently worked. Fortunately, everything changed when they chose the road to financial freedom. After they developed a healthy financial philosophy—put a Spending Plan Worksheet and Spending Register to work—they turned their whole lives around.
Be Accurate
Just like your house plan, it’s critical you use accurate information. Estimates aren’t good enough in construction, and they won’t be in financial planning. In reviewing
your financial records, you may find a few gaps in your information about how much you’ve been spending and where you’ve spent it. This isn’t unusual. Do the best you can with your prior month’s information, but from now on be as precise as possible in your records so you won’t get off track.
Summary of Worksheet Steps... Your Spending Plan Work Sheet has 10 steps to follow. Do them in order since each step builds on previous steps. First, you’ll need to gather information about your prior month’s income and expenses. The following steps organize your information and each one has a corresponding number on your Spending Plan Worksheet. The steps are:
1. Identify all your sources of Income and review the Expense categories.
2. Record your actual monthly Income and Expenses from the prior month.
3. Calculate and record the Difference between your Income and Expenses.
4. Decide the Type of Expense: Fixed, Variable, or Discretionary. Then record the expense in the appropriate column and Total each column at the bottom.
5. Make needed Adjustments to Discretionary and Variable expenses to balance your Total Expenses with your Total Income.
6. Determine your Final Expenses by subtracting or adding the Adjustments and entering the new amount into the Final Expenses column.
7. Assign the responsibility of Who Pays Expense for each Final Expense between “Husband” and “Wife” and total columns. (Skip Step 7 if you’re single.)
8. Record the portion of Total Gross Income you receive by Pay Period.
9. Decide which expenses to pay with each Pay Period.
10. Once you’ve begun to live your Plan, at the end of each month record your actual Income and Expenses in the Monthly Plan Summary for the next three months.
The Spending Plan Worksheet Made Easy
“Choice not chance determines destiny.”
~ Unknown
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