3. Spending Plan
A spending plan is a good tool to make sure that you’re financially on track. To many people, spending plan is really another word for budget – in this course we’ll focus on the spending portion of the budget.
When you create a spending plan, you’re looking at how you use money right now and how you plan to spend money in the future. This is an important part of managing your money.
The reason a spending plan (or budget) is so important is that it requires planning. Instead of going shopping as soon as you get your paycheck and maybe not having enough to make ends meet before you get your next paycheck, you already have a plan for how you’ll spend the money. When you create a plan you can make sure that it supports your financial goals, such as getting out of debt or building an emergency fund or buying a car or a house. If you create and follow a spending plan you can make sure that you have enough money for necessary expenses. If you plan appropriately, you’ll also have enough money for savings and your wants.