More For Your Money - University of Illinois Extension

http://MoreForYourMoney.extension.uiuc.edu

Creating a Spending Plan

Once you know your income and expenses, you’re ready to set up a spending plan.  But, before you can do that you’ll need to take a look at your figures and think about your spending.  To manage your money wisely, you need to balance your expenses to your income. That means you do not have more expenses than income.

So, to make a spending plan, you will need to:

  • Add up all your expenses, both fixed and flexible.
  • Next, add up all your income.  Use the net amount – the amount after taxes and other expenses have been deducted. 
  • Then, subtract your expenses from your income. 

This will help you to see if you have enough money to meet your expenses or if you overspent.

If you have more expenses than income, you will need to:

  • Cut back on expenses.
    • look at flexible expenses first
    • check fixed expenses next
  • Explore getting more income.
  • Use savings.