Spending Plan

Spending Plan

One simple change to the wording of a budget helped my wife and I come together.  Thanks to Dave Ramsey’s simple suggestion I started calling the budget a spending plan.

Purpose – You want to spend every dollar before you ever see it, each dollar has a purpose prior to anything being spent.  I estimate what my income and expenses will be for the month by breaking them down into bi-monthly sections.  Some people do weekly or an entire month, you’ll have to decide what works best for you.

Plan – You don’t want to plan for the perfect month but instead try the best you can to plan for what is coming up.  The first month we started this there wasn’t enough money in our school fund for supplies, we knew it was coming but were way short of what it needed to be so we had to pull from another category to cover it.  An example of something to plan for in the future is christmas or property taxes.  If possible put a little bit aside for things coming up in the future so it doesn’t hit you all at once.  Doing this will be trial and error, some months you’ll be perfect and other months you will be short but the point is that doing some sort of plan is better than nothing at all.

Result – After the month is over take a look back to see what you did well and what you could do better with.  Don’t expect perfection.  Some people will take all money that wasn’t spent and put it on existing debt, while we do something a bit different.  We keep money that didn’t get spent in their respective category to give us security in the future, an example is we’re trying to build up a doctor copay and prescription balance so that when we get sick a few times in a month it won’t hit us all at once.  We could use that shortage each month on our debt but we’re trying to have a longer term plan with some expenses, vehicle maintenance is another category we’re trying to build a positive amount for.

The spreadsheet I use was modified from one I found on the web and another was from someone I know that I modified as well.  Here is mine and another one.  They are each a little bit different on the monthly tabs but have a lot of the same functionality.  The names will auto fill from the first tab to each month while the numbers will fill to the first tab from the months.  Google is great for sharing documents but I just haven’t felt comfortable enough on these spending plans to do them within google docs, unsure if it can handle everything I want it to do.  If you would like the spreadsheets just send me a comment or email.

Edited to add – I’ll be more than happy to modify or customize what I can to help out.

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