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Spending Plans

Learn advanced money management techniques and create a personalized spending plan to secure your financial future. Understand the importance of financial planning and make strategic adjustments to maximize your net worth and achieve your goals effectively.

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Spending Plans

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  1. Spending Plans “Take Charge of Your Finances” Advanced Level

  2. What is a Spending Plan? Document used to record both planned and actual income and expenses over a period of time A budget

  3. Money Management Tools Statement of Financial Position Income & Expense Statement Spending Plan What is my future money management plan? What is my financial position today? How have I managed my money in the past? Determine what changes to make Make changes

  4. A forward-looking Income and Expense Statement May use the same template for both the Income and Expense Statement and the Spending Plan 

  5. Why is a Spending Plan an important part of financial planning? Help manage your money in a positive manner Analyze the opportunity costs of your trade-offs to maximize financial well-being Increase net worth Helps set and reach goals

  6. Spending Plan Development Process Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments Develop the spending plan Maintain the spending plan Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Step 3 - Allocate Money to Each Category

  7. Track Current Income and Expenses Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Ensures spending plan is realistic Step 3 - Allocate Money to Each Category

  8. Personalize Your Spending Plan Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments How will you develop a spending plan? What is the intended time period for your spending plan? Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Step 3 - Allocate Money to Each Category What categories will your spending plan include?

  9. How will you develop a spending plan? Paper and pencil Spreadsheet How would you develop a spending plan? Money management computer software Applications

  10. What is the intended time period for your spending plan? What categories will your spending plan include? • Usually concurrent with pay period • Reference tracking from the Income and Expense Statement • Do any categories need added, changed, or removed? What time period would you choose for your spending plan?

  11. Allocate Money to Each Category Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments Reference tracking from Step One Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Determine what changes to make Step 3 - Allocate Money to Each Category

  12. When allocating money consider: Trade-offs and opportunity costs Contractual expenses Goals Required to pay expense for a specific amount of time - not easy to reduce or eliminate Easy to reduce or eliminate Rent, Internet, Cell phone Food, entertainment

  13. Adult Spending Plan Guide

  14. Teenage Spending Plan Guide

  15. Net Gain or Net Loss? • Add more money to savings or another expense • Increase income • Decrease expenses • Both

  16. Implement and Control Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Use a control system to stay on track Step 3 - Allocate Money to Each Category

  17. Control Systems Which control system would help you stick to your spending plan? Internet-based spending plan program Depository institution programs Check register system Envelope system

  18. Evaluate and Make Adjustments Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments Is your spending plan helping you reach goals? Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Step 3 - Allocate Money to Each Category Do you need to make any adjustments?

  19. Summary Step 1 - Track Current Income and Expense Step 5 - Evaluate and Make Adjustments • A spending plan is an important financial planning tool • Helps achieve goals • Make your spending plan work for you • Make sure to control, evaluate, and adjust your spending plan Step 4 - Implement and Control Step 2 - Personalize Your Spending Plan Step 3 - Allocate Money to Each Category

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