Making A Spending Plan

When you’re ready to use the information you’ve collected to make a spending plan or budget, subtract your expenses from your income.

You can use the Monthly Budget Worksheet Download Monthly Budget Worksheet to see where you stand.

Or, have the Budget Wizard Links to an external site. do it for you.

If your answer is positive—that is, your income is higher than your expenses—you’re on the right track. You may want to increase the amount you’re saving for the future. Other than that, keep up the good work!

If your answer is negative, and your expenses are higher than your income, you have work to do. It helps to know that expenses can be broken down into two categories:

• Fixed expenses are amounts that you have to pay every month, no matter what. Rent, insurance, loan payments, and phone bills are usually fixed expenses. They won’t change unless you move or modify your plan.
• Flexible expenses cover other necessities such as food and transportation, but also things that are fun.  How you handle flexible expenses will make or break your budget.    

 

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