To create a successful Spending Plan, do the following:
- Identify all your regular expenses, both discretionary and non-discretionary Essential Expenses - their amounts, frequency and due dates. ...
- Identify all your Income. If you have a fluctuating income, identify the lowest income you are likely to receive and also identify an average for further consideration in your Plan. ...
- Determine how much your Essential Expenses total (do not include your discretionary spending at this stage). Essential Expenses are all expenses that you MUST pay – ie insurances, telephone, rent, vehicle registration, etc. ...
- Determine how much surplus Income is remaining after you have deducted your Essential Expenses….
- This surplus income is the amount you have available for –
- all your non-discretionary expenses
- building up your Rainy Day unexpected expenses account
- paying off arrears, loans and credit card debt faster
- saving for your goals.
Now, this is where the significant differences between a Spending Plan and a Budget come into play.
With a Budget, you will subtract all discretionary and non-discretionary Expenses from your Income, and try to save the difference.
However, this isn’t as simple to put into action as it sounds. Most people get to the next payday, only to find there is little (if any) left of that difference, and they have no idea where all that extra money disappeared to.
For many people, their expenses exceed their income, and this creates a snowball effect of escalating debt. They simply don’t know what to do to trim their expenses, or don’t have the willpower to do so on their own.
A Spending Plan, on the other hand, utilises future forecasting software, which identifies every single day when you won’t have enough income to pay all your bills on time.
By trimming every possible expense and then integrating the 3rd factor – Timing of when your bills are paid – into your Spending Plan software, all the periods where you were going to fall short disappear.
Suddenly you have enough money in the bank to be able to pay ALL your bills on time. You will be able to have future unexpected expenses covered, catch up on your arrears, and before you know it, you will have your debts paid off and saving rapidly for your goals.
Achieving these results will occur considerably faster by engaging the services of a Spending Planner, who will walk beside you to support you and keep you accountable to the goals YOU have set for yourself.
They will pick you up if you fall off the wagon and “splurge spend” on unneeded purchases that you will regret a week after you spend that money. They will show you how to navigate safely around all unpredictable, unexpected expenses, show you how to quickly get back on track, and make the whole savings journey as simple and fun as possible.