If you were able to see my previous post about budgets then you would have seen this second step of setting up a budget or as I like calling it by the true name “Spending Plan”. I wanted to go into this step a little bit deeper so hope you enjoy. 
Step 2:
What is your current spending like? From this point forward, start keeping a “Money Journal”. For a 30 day period right down EVERYTHING you spend and what it is spent on and money you receive. After 30 days, review this and trust me……you will see some patterns.
This a wonderful tool for truely knowing what you are spending your money on. A lot of people either don’t want to do this and think they already know where their money is going. They might have an idea but just don’t realize how much is truely spent. Others might not have any clue or just scared because of what they will find and not want to change. If you are very serious about wanting to change your financial future and learn TRUE financial freedom, then once you are done with step 1 of setting your goals……..now you are ready for step 2!
Many ways of setting up a spending plan, but need to find the way that fits your life style. Step number 3 will talk more about how to set up a spending plan but lets get you thinking about it first. Are you a paper person? Are you an electronic person? Are you a mixture of both? If you are in need of a general paper format of a spending plan then just contact me and I will send you one. For some online ones CLICK HERE. Good rule of thumb for putting down INCOME and EXPENSES.
Income:
1. Set up spending plan on a monthly basis.
2. Put down the income you truly get….bring home.
3. Anything you get that is not cash. (e.g. grocery money, paid travel)
4. Tax refund or anything else you receive regularly
Expenses:
1. Set up your spending plan on a monthly basis.
2. From your money journal find out spending habits and what they equal per month. (e.g. coffee for $2, 3 times a week would be $24 a month)
3. Don’t forget about gifts, wedding, birthday, Christmas, other Holidays. (these are called spending plan busters because they are often forgotten)
4. Car and home maintenance. (you don’t get bills from these but always a cost that comes up)
I could spend a long time on the expense column and different people will have different things on this end, because this is the reason it is called a spending plan. Just remember, for this step you want to do the money journal for 30 days straight. Make sure to write down every single thing that happens money wise during those 30 days. After your 30 days you should be able to go back through your journal, put items into categories and try to stay away from putting too many things in miscellaneous.
Look for the next post in this series for different spending plans. Hope this helps
