Making a Plan
How to make a plan
There are three steps to making a savings and spending plan:
- Figure out your monthly income
- Figure out your monthly expenses
- Subtract your income from your expenses. See how much you can save each month – or how much you need to cut back
To set up a saving and spending plan you need to know what you make each month. Use the after-tax “take-home” amount of your paycheck. If you do not have a regular paycheck, estimate what you make for the whole year and divide that by 12. Be sure to include income like alimony or child support payments, social security or pension checks you receive.
Do you know where your money goes? Some people know to the penny. For others, it is a mystery. You can become a money detective. The best clues are your receipts. Take an envelope and put every receipt you get in it. Also put in a copy of each of the bills you pay. At the end of the month, add up all of your receipts and bills to see what your monthly expenses are.
Now subtract your expenses from your income. This is the amount you can save each month for your goals. If it is not enough, you can look for ways to spend less. You can also think about your wants versus needs.
Click here to print out the Save More Now workbook that can help you start a savings and spending plan.
Click here to build a budget on the internet (at another website). They will do the math for you.
Back to Saving Money