# How to Use a Spending Plan, Part 1

Have you ever been told, “You’re not my boss!” As the oldest of 8 children, I know I have!

Do you ever feel like you can hear your money saying this to you? I have felt that way, m-a-n-y  t-i-m-es. It seems that, regardless of our best intentions, our money has a mind of its own and simply goes where it wills!

Is this a truth statement? Notice I said, “it seems that…” In reality, our money goes exactly where we tell it to go. The problem isn’t the money, it is us!

I’m not denying the fact that unexpected expenses arise. It’s a fact of life. But even “unexpected” expenses can become “expected” when you are operating on a spending plan.

If you’re like most folks, the idea of a “budget” or, as I prefer to call it, a “spending plan” seems overwhelming, constricting, and generally unachievable. In my experience, the truth is quite the opposite! Here’s the key: for the most part, every dollar my husband or I earn is already assigned to an expense before it even hits our checking account.

Ready to jump in? Let’s make a sample spending plan for the month of June, 2011 in two simple steps.

Step One: List Income

When I sit down to write my spending plan for the month, I always start by listing our income. Since my husband is the only one “bringing home the bacon” at the moment, this step is rather short! When we were going through grad school, though, we had multiple income sources, so I had to list each one. We have always been paid twice a month, so I list the income we expect to receive on the 15th and the 30th of each month in separate columns. The top of my spending plan looks something like this:

June 2011

Income:

15th: \$__________         30th: \$

Other: \$                                 Other: \$

My husband is a church organist, so we occasionally have other income in a month through weddings and funerals, hence the “other” category. Adapt this idea to fit your situation.

Step Two: List Expenses

Next, print my Monthly Expense List, grab your checkbook register, credit card statement, last month’s bills, and list all of your projected expenses for the month of June. (If you already completed this step during the 30 Ways to Cut the Cost of Living series, you are ahead of the game!)

Don’t forget to include expenses like income tax preparation, (e.g. Turbo Tax Online), babysitting, clothing, giving, eating out, and oil changes. Be as thorough and realistic as possible.

Take a moment to complete these two steps, and then stay tuned for part two!

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