What does a Spending Plan most resemble? Yes, a Budget. We know all about those and hate them. They seem so useful, so virtuous, but they are hell on wheels to keep up. Any plan which restricts us indefinitely will bring out the rebellion in us. It’s human nature.
Doing without is not a virtue. Maybe you think it is. Getting by on so little just means you are depriving yourself of the bounty in the world. What are you, a trappist monk? No one lives a pleasant life restricting themselves from joy. What is good for us is not self sacrifice, but self discipline. And this is accomplished in our money by deciding, in advance, how much to spend in the various areas of our lives. We have needs and wants, and both should be funded.
Part of any Spending Plan is Food, Housing, Personal Care, Self Care, Transportation, Spiritual, Vacation, Dependent Care, Education (if applicable), Personal Business, Gifts, Investments, Taxes, Debt Repayment. See Vacation in there? Vacations are the fruits of your employment. You deserve a vacation. You also deserve a debt-free life, a sound investment portfolio, the joy of giving gifts at appropriate times, and good quality shampoo.
It isn’t that you can have it all right this moment, but you can have it in the near future; you deserve a comfortable financial life which will fund your dreams and your pleasures, as well as your responsibilities.
Maybe you’ve lost your hope in that ever happening for you. Well, a Spending Plan will renew your vision.
Go back to your Spending Record,that piece of paper where you have written down everything you’ve spent in the last month. If you haven’t done this, start now. It’s one of the keys to financial prosperity. Looking at the categories you already spend in, take an average of how much you spend over a month. This is about what you’ll spend in the future, too. Now, add more categories, the ones I’ve listed if you don’t have them already. Dreams are a part of several of those new categories. Guesstimate how much you will be able to save for each.
Add all the categories together, and see how close the total is to your income. If you are under your income, add a few bucks to the new categories. If you’re over your income, shave a few bucks off a few categories. Massage to make it fit.
Get a little spiral-bound notebook, small enough to carry with you. Put the categories in alphabetical order. Copy the name of each category onto one page of the book, leaving a blank page between them. Put the amount you will pay into each category each pay near the title, eg. Clothes, $25 a pay. Subtract each item you buy from the appropriate category page, like in a checking account, and record the balance left in each category.
You now have a Spending Plan. You have just given birth to the single most beautiful and powerful tool you will ever cuddle on the road to a sane and pleasant financial life. Are we having fun yet?
STOP DEBTING 