Fail to Plan or Plan to Spend?

At the end of each month, many Americans ask the following question: What happened to the money that I was going to save?& One of the best ways to gain control of your money is by developing a written spending plan.

A spending plan can help you to:

• See where your money goes.
• Reduce unnecessary expenses.
• Evaluate needs and wants.
• Locate money in your budget for large expenses, emergencies and long-term goals.

Here’s how to begin building your financial framework:

• Discover where your money goes.& For one month make notes of all expenditures.& Get out last year’s checkbook register to determine what you paid for those items that are not predictable on a monthly basis (entertainment, hobbies, travel, etc.)
• Categorize your expenses by areas (i.e. food, clothing, childcare, utilities, and transportation).& Write down everything, even the popcorn you had at the movies.& You’ll be surprised where those hard-earned dollars go.
• Prioritize your financial goals and determine how much you’ll need to save each month.& Think long-term and short-term goals.
• Bring your goals in line with your income (i.e. new car, less expensive car, wait another year for a car).& Putting off a purchase is called “delayed gratification.”
• Make the written plan realistic.& Over a few months time you can get your spending on track and make progress toward your specific financial goals.

By W. Barton Close CFP^®

CFP®  |  Certified Financial Planner™  |  
Certified Financial Planner Board of Standards, Inc.,
owns the certification marks above, which it awards
to individuals who successfully complete initial and
ongoing certification requierments.