How to Use a Spending Plan: Part 4

Let’s talk about a plan of attack for pay day.

This final step is simple but incredibly important for the success of your spending plan. I’ll give a pay day scenario for those with and without direct deposit.

We don’t currently have the option of direct deposit, so when the first check of the month arrives; I sit down with a deposit slip and my spending plan and divide the entire amount of the check on paper as follows:

  • The amount of cash I need to withhold.

To determine this amount, I scan my expense categories and add up the total amount of cash I need for the first two weeks of the month. For example, if I have budgeted $200 in cash for groceries for the month, I withhold $100 from the first paycheck for this category. I don’t like to carry too much cash on me at any given time.

  • The amount going into savings.

Hopefully you are able to put something in savings each month. We have an automatic transfer to savings, which I highly encourage as it “forces” you to set aside at least a small amount each month.

  • The amount going into checking.

This amount covers the checks I write each month, our credit card bill, automatic bill payments, etc.

Once every dollar has a destination, I then fill out my deposit slip and update my spending plan (see below). I’m an old fashioned pen and paper kind of gal, but you can use an EXCEL spreadsheet or whatever works for you. My ledger looks something like this:


June 2011



6/15/11 $___________________


6/30/11 $___________________




$____ (amount budgeted) tithe $____ (amount given: these numbers should match!)

$____ (amount budgeted) mortgage $____ (amount paid)

$____ (amount budgeted) electric bill $____ (amount paid)

$____ (amount budgeted) groceries $100 ____ (amount spent)



When I fill out my deposit slip, I update my spending plan accordingly. If I have withheld $100 in cash for groceries, I indicate that $100 has been “spent” on my spending plan, leaving room to record when the second $100 is spent. Similarly, when I write checks or when automatic payments are deducted from our checking account, I update our spending plan. The cash updates happen only twice a month with the deposit of my husband’s paychecks, but I find it necessary to update the spending plan with more frequency due to automatic bill payments, checks written, etc.

When we had direct deposit, this system worked very similarly in that I still had to make a trip to the bank to withdraw the cash I needed from that paycheck. I utilized online banking to easily transfer funds to our savings accounts.

Just a quick note about cash: If you do choose to use cash for most of your spending categories, I encourage you to use some type of envelope system. You don’t have to spend money on a system: you can just label a few small envelopes and stick them in your wallet. If you want something a bit fancier, you could check out the wallet I use.

As I mentioned at the beginning of this series, you must tell your money where to go, or it will decide for you! Keeping tabs on your spending plan and sticking to your cash envelopes is the most effective way I know to stay in control and ensure that you spend your money the way you intend to.

Sticking to a budget or spending plan may not sound very exciting, but, if you’ve never given it a try, there’s no time like the present, and I can assure you that you will not regret it!  The plan I have outlined works for me, but you can tweak it, design your own, or try something entirely different. The idea is the same: have a plan, and stick to it!

Do you have a plan in place for June? There’s no reason to let another month go by in which your spending is out of control. Make a spending plan today!


Your turn! Do you use a budget? I’d love to hear your success stories or tips in the comments section!


  1. Karen Smith says:

    Where can I find your spending plan series, Parts 1 – 3. I only see part 4 on your website.


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