|  |
How to Make a Spending Plan: Step 4, How Much Do You Spend?1
Josephine Turner and Nayda I. Torres2Use your records to figure out how much money you spend every month. There are two major types of expenses you need to control.
Fixed Expenses are those you usually pay on a regular basis. Here are some common fixed expenses:
Many fixed expenses are paid every month, but others have to be paid every three or six months or every year. You can usually plan ahead and save a portion of the total to pay for the expenses when the bill is due.
- child care
- rent or mortgage
- household bills (water, electricity, telephone, fuel)
- installment payments (car, loans)
- insurance premiums
- savings deposits
Flexible expenses are those which do not occur in a set amount on a regular basis. Here are some common flexible expenses:
The list of flexible expenses may vary from month to month. People who keep spending records for the first time are often surprised by how much they spend on things they don't really need or want. If you gain better control over your flexible expenses, you will have an easier time covering your fixed expenses, avoiding late penalties, and achieving your goals.
- food, cleaning, and paper products
- clothing and personal items (laundering, hair cuts, accessories)
- transportation (gasoline, car repair, public transportation)
- medical care (doctor bills, medicine)
- education and recreation (books, magazines, movies, entertainment, vacations)
- gifts and donations (birthdays, holidays, charity)
Use Tables 1 and 2 to calculate your fixed and flexible expenses. Some people say that it's best to figure out how much they spend every month. Others calculate their expenses for each week. Since some expenses are usually made on a weekly or monthly basis, it may be useful to calculate your expenses both ways. That will help you see more clearly how you spend money.
Fixed Expenses
Expenses $ per week $ per month Expenses $ per week $ per month Housing
Insurance
Rent/Mortgage
Health Cable TV Life Water Automobile Electricity Home Fuel Other Phone Subtotal $ $ Other Subtotal $ $ Savings
Payroll Deduction Installment Debts
Christmas Club Furniture/Appliances Set Asides Car Other Loans Subtotal $ $ Other Subtotal $ $ Other Tithes Child Care
Pager Babysitter Other Nursery/Day Care Subtotal $ $ Other Subtotal $ $ TOTAL $ $
Flexible Expenses
Expenses $ per week $ per month Expenses $ per week $ per month Food and Other Items
Medical Care
Groceries Doctor's Bills Restaurants Prescriptions Cigarettes Therapy Pet Food Other Cleaning/Other Supplies Subtotal $ $ Other Subtotal $ $ Education/Recreation
Books/Magazines Clothing/Personal Care
Movies/Records Purchases School Supplies Repairs/Alterations Vacations Dry Cleaning Other Accessories Subtotal $ $ Hairdresser/Barber Other Gifts and Donations
Subtotal $ $ Birthdays Holidays Transportation
Charities Public Transportation Other Maintenance (Tune-ups) Subtotal $ $ Operation (Gas, Oil) Other (Tags) Subtotal $ $ TOTAL $ $
In Table 3, add the fixed and flexible expenses to calculate how much you spend each month.
Expenses
$ Per Month
Fixed Expenses
Housing
Installment Debts
Child Care
Insurance
Savings
Other
Total
$
Flexible Expenses
Food and Related Items
Clothing and Personal Care
Transportation
Medical Care
Education/Recreation
Gifts and Donations
Other
Total
$
Grand Total
$
Tables
Table 4.
Remember, these tables are only meant to help you make your first spending plan. You have to experiment to find the easiest way to manage your money.
Footnotes
1. This document is FCS 7170, one of a series of the Department of Family, Youth and Community Sciences, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida. First published: February 1997. Revised: August 2005. Please visit the EDIS Web site at http://edis.ifas.ufl.edu2. Written by Nayda I. Torres, Professor, Family and Consumer Economics and revised by Josephine Turner, CFP, Professor, Family and Consumer Economics, Department of Family, Youth and Community Sciences, Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville FL 32611.
The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.
U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Larry Arrington, Dean.
Copyright Information
This document is copyrighted by the University of Florida, Institute of Food and Agricultural Sciences (UF/IFAS) for the people of the State of Florida. UF/IFAS retains all rights under all conventions, but permits free reproduction by all agents and offices of the Cooperative Extension Service and the people of the State of Florida. Permission is granted to others to use these materials in part or in full for educational purposes, provided that full credit is given to the UF/IFAS, citing the publication, its source, and date of publication.