A Monthly Spending Plan Can Help You Build Big Savings
SMART SPENDING & SAVING ARE EASIER WITH A GOOD PLAN
How often do you find yourself saying, “I just don’t know where the money goes!” With a monthly spending plan, you’ll know.
A spending plan puts you in control of your finances, giving you a clear view of how much you’re spending and exactly what you’re spending it on. Once you have that information, you’ll be able to see where you can spend a little less and save a little more.
Monthly spending plan fast facts and benefits:
- Create a budget so you can see clearly how much money is coming in and going out
- Cut back or eliminate unnecessary expenses so you can save more money
- Identify major financial goals to work toward, and put extra income into your savings account
Money in vs. money out
First, add up all sources of household income. Next, add up all your monthly expenses. This should include all your monthly bills like rent, utilities, car payments, cash purchases and investments. Check out our guide on how to make a budget.
If your total income is greater than your expenses, you have a balanced budget, and you can put the extra income into a savings account. If you’ve got more money going out than you do coming in, you have a negative cash flow, and it’s time to make some adjustments so you can get ahead.
Separate the essentials from the extras
Some spending is non-negotiable, like rent and utilities. Other things can be scaled back or even eliminated. You can skip the recreational shopping at the mall, eat in restaurants less often and find better deals on household staples. Get our 12 common sense tips for saving money. You’ll be amazed to discover how even small savings here and there can really add up!
Make a list of your priorities
There’s no one cookie-cutter formula that works for everyone. Only you can determine what you really want or need to spend money on and what you can live without. Whether your priority is paying off debt, saving up for a home or retirement or planning a splurge like upgrading your major kitchen appliances, a monthly spending plan can help you reach your goal faster.