Create a Simple Spending Plan

When you are simplifying your life, you will want to take control of your finances. Otherwise you end up overworking to pay for stuff you have little time or energy to use.

In the past I have always kept a close eye on spending, but sometime last year as business grew I thought I didn’t have enough time to keep track and use a spending plan. I was relying on automatic downloads from the bank site, which is not current if I have written checks and didn’t have precise categories. At the end of the year, I had more debt than I wanted and we had a couple overdrafts because I wasn’t keeping track. I hadn’t balanced my checkbook in 3 months. Yikes! This year, I decided to go back to tracking and keeping to a plan, since it has worked so well in the past. A couple weeks ago I created my spending plan for the year. It didn’t take more than 30 minutes. And you can even break this down to do a little today, a little tomorrow, etc.

1. 1. First list your expenses that don’t change like mortgage, insurance, etc.
2. Then enter your information into this spending plan calculator: http://www.crown.org/Tools/budgetguide.asp?aid=
3. Out comes a spending plan. Then you just need to personalize it a bit for you.
4. If you already know how much you usually spend in certain categories, see where you can cut back. Looking at last year I noticed we ate out more than usual and we can cut back on this.
5. Keep track of your income and expenses, either by using a program like Quicken or some other method. If you don’t have something like Quicken and don’t like paper and pen, there is an online tracking system called: Wesabe. and it’s free, so no excuses! I use Quicken, which lets me know if I go over budget on something, so I can cut back in a different area. Every morning, I enter my receipts and check my bank online for any automatic payments to enter. It takes about 5 minutes a day and I always know where I am in my spending plan and how much we have in the bank. (So much for me thinking I didn’t have enough time to do it.)
6. I already have an automatic savings plan, but if you don’t have one now is the time to set it up. Every two weeks, when my husband is paid, money is automatically transfered from the checking to the savings account. We never see it, so the money isn’t missed. I was able to set up a recurring automatic transfer in about 5 minutes through my bank’s online banking. Check to see if your bank does that.
7. Put in your calendar an appointment to balance your checkbook every month.

Let this be the year you really take control of your finances. Creating and using your spending plan will help you make conscious choices about how you spend your money.