Welcome to 31 Days to Organize Your Finances. By the end of the month, my goal is to help you have a detailed financial plan for your family. We’ll talk about cash flow, budgets, debts, and all of the nitty gritty of our finances that might not be fun to talk about, but are so important to discuss. Please refer back to the original post for a complete list of daily assignments.
If you have been following along with the 31 Days to Organize Your Finances series then you have been building the components leading up to this moment. Today we are going to put the past assignments to work and create a monthly spending plan for next month.
We’re going to use the zero based budget as a guide for our monthly spending plan. This is where you assign every dollar of your monthly income to a category, so therefore, your income minus your spending will equal zero.
Starting today and every month going forward, you (and your spouse, if married) need to sit down to discuss and work on the next month’s spending plan.
At this time, I do not have an excel spreadsheet for you to download, but I found an easy pdf for you to use–make a budget worksheet, or create your own excel budget, or just use paper, pencil, and calculator at this time. If you use this pdf, white out any categories that you don’t need to add your own.
At the top of the page, you want to list and total all of your projected income for the month.
Under your income, list all of your spending categories and the amount you plan to spend during the month. It’s a good idea to refer to your family calendar to remind you of any events, holidays, or activities where you’ll need money. You must project your monthly spending and you don’t want to miss anything.
Categories could include, but are not limited to:
- rent/mortgage
- groceries
- dining out – Try to separate your groceries from your dining out
- utilities – gas/electric, water, sewer, internet, phone, cable
- clothing
- entertainment
- car loans
- car service
- fuel
- insurance
- household maintenance
- gym membership
- daycare
- charity/tithe
- haircuts/personal hygiene
- travel expenses, such as parking, tolls, etc
- medical
- Personal Escrow Fund
- Gift Giving Fund
- building your Emergency Fund
- and any single little thing that you need to spend money on.
When you total your spending categories, the amount needs to be equal to your income to create a zero based budget. If the spending amount is higher than your income, then you need to adjust and reduce your spending. If the spending amount is lower than your income, (good for you), but you also need to adjust your spending categories. The goal is INCOME – SPENDING = ZERO.
What do you do when your spending is more than your income? Only you can determine what is a priority and what is a luxury in your life and when you have more spending than money, than you need to cut out some luxuries to insure your priorities are covered. Read the 5 Easiest Categories to Reduce for some ideas on how to lower some of your spending.
This assignment will take some time especially if you’ve never done a spending plan before, so take your time. If you have any questions while completing your spending plan, please leave them in the comments. I am here to help.
Do you and your spouse do a spending plan (or budget) every month? Let us know in the comments.
Please note, I AM NOT A FINANCIAL PLANNER. This series was written based on my family’s experiences. If you feel you need additional advice, please consult a certified professional.
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