Why I Needed To Create A Spending Plan
Now that you have created your budget, it is time to create a spending plan. If you haven’t read my last two blogs on creating budgets called Budget: Love and Selflessness and Setting up a Budget for Beginners take a few moments to catch up. You will need a budget to create the spending plan.
My spending plan came out of my frustration with working with apps and programs that created stagnant monthly budgets that could not be manipulated to track bills that were not paid monthly. They could not appropriate for surplus or negative balances. These programs started each month anew with no way to balance forward extra cash. They wanted to treat each month as its own budget. A spending plan is way more than a budget because it tracks cash flow.
My spending plan came out of my frustration with working with apps and programs that created stagnant monthly budgets that could not be manipulated to track bills that were not paid monthly.
Track Cash Flow With Your Spending Plan
I needed to track cash flow, with our very tight budget. We had to know where every penny went. I wanted to see if we would be able to pay all our bills today, next week or 6 months down the line. I needed a program that could anticipate shortfalls allowing us time to prepare for them in the best way possible. Either by cutting back on other expenses or pulling from savings or delay paying a bill until next pay period.
Create The Spending Plan
Therefore, I created my spending plan in Excel. It took me a while to create it the first time. After that it was a quick copy and paste with a find and replace command to update all the dates.
Using our income pay periods and bill dates for each bill, I mapped out how the bills will be paid. Since my spouse and I are paid either bi-weekly or the 15th and the 30th, I scheduled our bills within these payroll cycles. If you are paid weekly, you have the option to pay your bills weekly or combine your weekly income into bi-weekly or bi-monthly periods. It is solely up to you.
Adjusting The Due Dates
If you find that one pay period may be a little overloaded and the 2nd a little light with bills. I suggest you contact your creditors to see if you can adjust your due dates. This will enable you to best manage your cash flow much better.
Budgeting Non-Monthly Bills
As I shared from my blog “How to Create a Budget for Beginners”, I discussed bills that were not monthly. I now want to discuss bills that are variable, based on usage. I average these bills for the year by adding them up and dividing by 12. You will also have an opportunity to save with these bills as they are mainly utilities. So, turn those lights out, take shorter showers, and turn down the thermostat. This is a great way to manage your budget because you can control these expenses by simply making minor adjustments.
You Are Done!
Once you create your first month, copy and paste to complete the year, then add in those pesky non-monthly bills. You are done. Congratulations!
Let’s budget, spend and live!