Post on 04-Jan-2016
SPENDING PLAN
Spending Plan
A spending plan is a financial statement you can use to assist in money management
also known as a budget
Set Financial Goals
Set financial goals. A financial goal should include the following elements- SMART
Specific Measurable Attainable Realistic Time bound
Cash Flow
A measure of the money you receive and the money you spend.
Why is a Spending Plan important? Giving a person an understanding of
where their money is going Tracking income and expenses Help meet financial goals Help people live within their income and
make ends meet Reduce the need for using credit
Sources of Income
Wages or Salaries Tips Withdrawal from savings Interest earned on savings accounts Scholarships Monetary gifts
2 Main Components
Income: money earned Expense: money spent 2 types of Expenses Fixed- have to be paid by specific date
(Food, housing, electricity) Flexible- have to be paid off but often
not by certain date (Food, goals, etc.)
Rent
Fixed Expense
Rent
Wages
Income
Wages
Groceries
Flexible Expense
Groceries
Internet Bill
Fixed Expense
Internet Bill
Tips
Income
Tips
Utilities
Fixed Expense
Utilities
Gifts from Family
Income
Gifts from Family
Savings
Fixed Expense
Savings
Car Registration
Fixed Expense
Car Registration
Eating Out
Flexible Expense
Eating Out
Scholarships
Income
Scholarships
Hobbies
Flexible Expense
Hobbies
Net Loss and Net Gain
Net Loss- have more expenses than income during that period on spending plan
Net Gain- more income than expenses