Spend with Intention – Creating a Spending Plan That Works

There seems to be two types of people …Those who love budgets (Like me; I see it like a game to see how far under budget I can get so I can spend that money somewhere else…usually eating out.)  Then there are people like my husband that consider the “B” word an awful thing you do not say in his house.  It makes him feel restricted like his money is telling him what he can or cannot do.  

That’s why I’ve scrapped budgets.  Instead, I have become more intentional about my spending any savings.  

The way I see it, it’s like taking my four year old to the county fair.  I have to tell her that she needs to stay with me and let her know what the expectations are when we get there.  Otherwise, she will run off to the first shiny thing she sees and get lost.

How many times have you gotten a tax refund, or a bonus and it ran off to something shiny or you have no idea where it went?

This is where a spending plan will help you use your money in a way that is important to you. 

Step 1: Pay it Forward and Pay Yourself First

Money is an energy and energy MUST flow.  It’s like the blood pumping through your body, when it is flowing your blood is able to take the oxygen and nutrients throughout your body.  However, if you have a blood clot that disrupts that flow, it could be fatal.  

There is some universal law that you “reap what you sow” and you “get what you give”. 10% is a great target.  However,  I’ve been in the position where I’ve only had $10 for a week’s worth of food for me and my two kids so I understand what it means to feel tight.   But you have something to give even if it’s three dollars to buy a few cans of dog food for your local shelter or your time volunteering.  Soon you will find that good things come to you in return.

You also must make it a priority to pay yourself which goes towards funding your future stability.  If you do not have a fully funded emergency savings, put that there first. We will talk more about how to build your emergency savings next week so make sure you subscribe so you don’t miss it. 

After your emergency fund goal is accomplished, you can reach out HERE to be connected with a licensed financial professional for personalized advice on where to put that money you are paying yourself. 

Step 2: Assess Your Current Financial Situation

Before you start creating the rest of your spending plan, you need to have a clear understanding of your current financial situation.  Click HERE to download your free spending plan worksheets. Gather your statements, pay stubs, bills, and any other relevant information. Calculate your total monthly income and your “stone” and “gravel” expenses such as rent or mortgage, utilities, insurance, and loan payments. Subtract your fixed expenses from your income to determine your discretionary income.  This is what you can put towards your “sand” and “water” spending.

If you run out of money before you run out of spending, start looking at the “water” and “sand” items to see what you can cut out or reduce.

Step 3: Set Financial Goals

What are your short-term and long-term financial goals? Whether it’s paying off debt, saving for a down payment on a house, or planning for the day you no longer have to have a job, your goals will shape your spending plan. Having a clear purpose for your money will make it easier to make informed decisions about where to allocate your funds.

Step 4: Track Your Spending

Creating a spending plan is just the beginning. To ensure its effectiveness, you need to track your spending regularly. Use tools like budgeting apps or spreadsheets to record your expenses. (Personally, I like the Mint app because it’s free, you can set up alerts, and it connects with your bank account and learns to categorize your spending making it easy.) This will help you stay accountable and make adjustments if necessary. The act of tracking alone can also make you more mindful of your spending habits.

Step 5: Review, Notice, and Adjust

Life is dynamic, and your spending plan should be adaptable to changes. Regularly review your spending plan (I recommend a quick review weekly) to see how well you’re sticking to it and if any adjustments are needed. Notice your reactions and emotions to your spending.  If you find that you consistently overspend in a particular category, or feel regret or resentment, consider revising that number or finding ways to cut back.

Step 6: Celebrate Milestones

As you make progress towards your financial goals, celebrate your achievements along the way. Whether it’s paying off a credit card or reaching a specific savings target, acknowledging your successes will keep you motivated and reinforce positive financial habits. You got this!

Remember, a spending plan isn’t about depriving yourself of things you enjoy. It’s about making intentional choices that align with your values and aspirations. By taking control of your finances through a well-structured spending plan, you’re setting yourself up for a more secure and fulfilling financial future.

Whew! That was a lot of information and now it’s time to take your first step by downloading an app to track your spending or click HERE to download your free spending plan worksheets.

If you want to know more about spending plans when your income varies, subscribe below to be notified of the next post addressing this topic!

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