A Spending Plan Manages Your Money
Spending money is so easy to do. In fact it is so easy that you wonder sometimes where it all goes. Have you ever felt as if you cannot afford to save money for a new house, new car or retirement because after paying for your current living expenses you have no money leftover? You are not alone; many people manage their finances the same way. If you are tired of living from pay-check to pay-check try tracking your money with a spending plan.
The Value Of A Spending Plan
Working from a spending plan will help you know where you are spending your money. When you are creating your spending plan do not make it complicated. Keep it simple by breaking down your spending categories.
Unless you are in a commission paying job, your regular paycheck is probably fixed.
This includes your raises, bonuses, part-time work.
Your Fixed Expenses
These are the expenses that do not vary each month. Examples include your rent or mortgage payment, your car payment.
Your Variable Expenses
These expenses usually change. Examples include utilities, transportation costs such as public transportation or gasoline, entertainment, groceries. These expenses are usually easier to cut than your fixed expenses.
You cannot correct an oversight unless you know that it exists. You cannot stop spending if you do not know where your money is going in the first place. So if you follow a spending plan that you created based on your personal income and expenses you will have an easier time of changing your spending habits.
Everything we do in live is a result of a habit we formed. The way you drive, sleep, and even spend are the direct result of your habits. With the proper tools and focus, bad habits can be changed. If you are serious about kicking the habit of living from pay-check to pay-check then use a spending plan to change your spending habits.