How to Easily Create a Spending Plan

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Did you know that money is a leading cause of stress in Americans 1? Even if you didn’t, I’ll bet you aren’t too surprised. One of the basic building blocks to success with money is knowing what we spend. The word budget tends to invoke some negative thoughts in people, such as, a fear of failure. As in, I don’t want to create a budget because I don’t want to “fail” by accidentally spending too much.

That’s why I like the term “spending plan.” A plan is flexible. A plan can be customized and changed on the go if necessary. Having a plan is powerful.

Want to create a spending plan but just don’t know how to get started? I have compiled a couple of links to free budget templates and created a quick outline of how to fill one out so it’s accurate. Most people need to create an outline of what they are spending now and then a spending plan that shows how they want to spend money in the future.

Step 1: Get organized

Gather all of your bills, checking and savings account statements, and credit card statements from the last month or two.

Step 2: Select a budget template

You can find free templates on the web, create your own if you know how to use Excel, or ask your financial planner for one. Here are a couple you could try:


Google Docs spreadsheet “Monthly Budget”



** I do not have any affiliation with any of these service providers nor do I receive compensation (monetary or otherwise) for my suggestions regarding budget templates.

Step 3: Get started

Fill out the budget using the actual numbers from your statements and bills. Be sure to include a line item for savings. If you don’t already have an emergency fund, you will want to include a separate line item for emergency savings and a line item for long term savings.

(Helpful Hint: I suggest you save a copy of your current spending for a reference as you move forward with your changes. This is easy to do, if you are using Excel simply click on the tab at the bottom of the worksheet and select “move or copy.” A small text box will come up; highlight the name of the tab you want to copy and then check the box next to “create copy” and “OK.”)

Step 4: Review your spending

Figure out where you need to move money around. For example, are you spending a lot of money dining out but also carry credit card debt? Take some money out of the dining out section and add it to your debt repayment line item. You get to prioritize what is most important to you. If you love dining out, then look to make changes elsewhere. This spending plan absolutely has to be something that reflects what you enjoy and value.

Step 5: Plan to save

If you have allocated some of your income to savings (which most of you will) then figure out a way to automate it. Sign up for your 401k at work, set up an automatic transfer from your checking account to your savings account and/or IRA once a month, etc.

Step 6: Don’t be too hard on yourself

Recognize that you may have to change your spending habits and that will take time. Changing our habits is not as easy as changing our mind so set yourself up for success. Some people are successful using envelopes to hold cash for spending on items that tend to trip them up. If you have a weakness for new clothes or dining out put the cash you budgeted for that item in an envelope for the month. The good thing about using cash is that when it's gone, it’s gone. You can also check out my 8 Tips to Stay on Budget.

You have the power to change your spending patterns. It will take time and discipline. You might even (fake gasp of horror) mess up a few/many times. That’s OK. It’s not about perfection; it’s about direction. When you are ready to change your spending, you will.

1 http://www.cnbc.com/2015/08/03/most-americans-rich-or-not-stressed-about-money-surveys.html

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