How to Create a Spending Plan

When a developing a spending plan, allow yourself leeway. Better to plan on spending more than to come up short at the end of the month.

• Identify all income, net pay and otherwise.
• Identify all expenses, from mortgages to dry cleaning. Keep a log and update as needed.
• Subtract expenses from income.
• Set aside some money monthly to cover bills due quarterly, semi-annually or yearly (insurance premiums, taxes, etc.). Consider a separate checking or savings account for these expenses.

Decide what you want your money to do. How much savings do you need? Is there something you want to buy? Make a plan and stick to it.

In the service? You could get burned if you lump in military housing and/or food allowances with the “income” part of your spending plan. Both resources can disappear when you are deployed.