How to Use a Spending Plan: Part 3


We just returned from a week-long vacation visiting family, so it’s been a while since I posted for this series. Let’s review what we’ve covered so far:

  • In Part One, we listed our monthly expenses and income.
  • In Part Two, we determined which of our expenses could be paid with cash, and assigned a payment method to each remaining expense.

Before we go any further, I must ask the question: when you listed your income and expenses, how did the numbers measure up? Are you spending every dollar that comes in? Are you putting a percentage of your income into savings? Are your expenses exceeding your income? If you are exceeding your income each month, something needs to change immediately. Check out my 30 Ways to Cut the Cost of Living series and make the hard choices to cut back. You’ll reap the rewards in short order!

In order to succeed with this spending plan, every dollar of your paycheck needs to have a designation. If your monthly expenses are less than your income, make sure that the extra money is going toward debt or into savings. Dollars that aren’t designated will inevitably be spent.

So, now that every dollar of your income has a designation on your spending plan, let’s talk about which paychecks will cover each monthly expense.

My husband is paid twice a month, so in addition to indicating a method of payment for each category, I also indicate which paycheck will cover each of the expenses. For example, the credit card is paid by the paycheck that comes on the 15th, the mortgage is paid by the paycheck that comes on the 30th, etc.

If you are a two-income family, you may have a plan similar to this one:

  • Husband’s paycheck: mortgage and monthly bills.
  • Wife’s paycheck: school/ childcare/ college savings/ family vacations, etc.

Your situation may be unique, so determine what will work for your family.

Here’s an assignment to help with this step:


Look at your list of monthly expenses, write bill due dates where necessary, and then determine which paychecks will cover each expense.


This small step is leading up to the final post of this series, in which we will discuss the all-important issue of the payday plan!

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