In a relationship...money matters, so there are some very important steps to making sure you have a spending plan that is appropriate for you.
Whether you are in college, just joining the work force or you have been working for the past 15 years, you must have a plan starting today.
•A spending plan is a way to become clear about your spending, money coming in, money going out, and having what is important to you. A spending plan not a budget or a means for sacrifice, scimping, or depriving yourself.
•Very simply, on a piece of paper put a line down the middle center. On the left side list all of your monthly income, money in, and amounts (from working, child support, gifts from parents etc).
•On the right side of the sheet of paper list all of your monthly expenses, money out, and amounts (rent/mortgage, food, eating out, entertainment, phone, child care, clothes, doctor bills, investments, retirement payments, savings for vacation/home/car, slush money, rainy day fund)
•By laying this out on paper and in front of your eyes to see, you create clarity with your money. You can see where your money is going and make adjustments and changes according to where you would like to spend money on what is important to you. For example, if you look and see that you seem to be spending quite a lot on eating out and that’s really not important to you but it is happening; while saving for a vacation is really important, you might want to slowly adjust this and maybe allocate $100 more or so a month to saving for a vacation and less to eating out.
•Having clarity about where your money is coming and going is the first step to changing spending patters.
•Spend less than you earn. This is the way you create wealth.
•Be careful you are not putting to many strict goals on yourself. Changes come slowly. You must feel good about the changes you are making and know that you are making them so that you can have the things that are important to you.
•If you get a bonus or windfall of money, put away some of it for a rainy day (I call it a rainy day fund or an emergency fund which should be enough money for you to live comfortably for 6 – 8 months without working), pay off some of your credit card debt with a part of the bonus, student loans, put a portion into investments and a portion towards “treating yourself” to something you have been wanting like a new dress, shoes etc. I believe treating yourself is as important as saving for retirement and paying your bills.
