How to Make a Spending Plan: Step 4, How Much Do You Spend?1
Use 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:
child care
rent or mortgage
household bills (water, electricity, telephone, fuel)
installment payments (car, loans)
insurance premiums
savings deposits
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.
Flexible expenses are those which do not occur in a set amount on a regular basis. Here are some common flexible expenses:
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)
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.
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
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
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.edu
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.
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