Creating a Spend Plan

Have you ever been at the end of the month and wonder where all of your money went? You start with the same amount each month, but by the end, poof. It's all gone and you are stuck scrounging for quarters to pay the pizza delivery guy.  One way to determine where your money goes and to have more control over where your money is spent, is to have a spend plan. It's easy to do! 

What is a Spend Plan?

What is a Spend Plan?

Spend Plan, Spending Tool or Budget

No matter what you call it, the spending plan is way for you to track your incoming and outgoing expenses. Every plan includes a few basics: income, expenses, debt, savings and assets. 

To begin let's cover the do's and don'ts of a spend plan.

Download a Spend Plan

Below is an example of a simple spend plan which is referenced during this course. It is recommended you  download and save it to your device. During this course, you will be provided information on each tab in the spend plan and are encouraged to complete each tab when instructed. At the end you will have created a basic spend plan of your own.

Spend Plan WKBK

Do's and Don'ts of a Spending Plan


  • Use a format you are comfortable with
  • Base on current income, savings, expenses, and debt
  • Include not only your needs but your wants
  • Should be practical and flexible
  • Use financial goals to keep you on track


  • Make it your master 
  • Use false numbers 
  • Forget to include ALL expenses

What is a do and a don't in a spend plan?

 base a spend plan on the income you wish you had

 make it easy to understand

 let it determine where every dollar spent

 include a plan for savings

 require the spend plan be followed to the penny

 include your needs and wants

 have a plan that is practical and flexible

 include financial goals



What is Income?


Click to learn the basics of income.

Gross vs Net Income

Gross income is the amount BEFORE any taxes or automatic allotments are taken out of your paycheck. This amount is greater than what you actually live on.

Net is the amount on which you live. This is the paycheck after all taxes and automatic allotments are taken out, the amount which is put in your bank account.

Net vs Gross Income

 income is your total household pay and allowances, basically everything you have earned.

 income is your total income minus taxes and any other deductions or automatic payments.

The amount deposited into your bank account on pay day is your  income.

Add income to your spend plan

Spend Plan: Income

Return to the spend plan you downloaded and begin creating your spend plan.

Start by adding your income to the Income tab. Use the amount which goes into your bank account every month. 

Be sure to add all sources of income (i.e. tips, child support, student loans, investments, income from a second job or a spouse).


What is an expense?


There are generally two types of expenses, expenses you know, those which are expected every month and those of which we may not have considered, but for which you pay. Watch the video to learn more about these two different types of expenses.

What are your expenses?

The fixed expenses are expenses which are paid monthly and easy to figure. This would be rent, utilities, insurance. The unaccounted for expenses or variable expenses are those on which you spend the rest of your income. These can be much harder to put in the spend plan. 

Take a minute to think about what you spend money on daily and try to determine a monthly amount for these expenditures. 

If this is difficult, think about tracking your spending.

Track your Expenses

Why should you track your expenses?

It's the end of the month and you have no money, you've used the spend plan but still can't determine where the money is going.  Now it is time to track your expenses.

If you track your expenses for 2-4 weeks, you will quickly understand where all the extra funds are going.

How do you track you expenses?

It's easy!  Depending on how you want to do this, you can use something as simple as a piece of paper or spreadsheet. Like the one shown here.

Expense Tracking Apps

Or use one of the many apps that are available to track your expenses, many of which are free.

Bank statement, credit card statements and bank websites

You can track on a monthly basis by using your bank statement, credit card statement or you bank account website. All will have a listing of your transactions. Banks are now offering assistance in tracking using charts.

Add Expenses to your spend plan

Spend Plan: Expenses

Return to the spend plan. Go to the Expenses tab and add all of your fixed expenses. Try to estimate your variable expenses the best that you can. After tracking your expenses for a month, you can update the variable expenses to produce a more realistic spend plan.

Expense: True or False

  • Expense is defined as a cost or a charge.
  • Expenses cannot be determined.
  • Tracking expenses is a way to refine your spend plan
  • Rent is not considered an expense
  • Fixed expense is an expense which is generally the same from month to month.


What is a Debt?


Is defined as money that you borrow and have to repay.  Watch the video to learn more.

Good Debt vs Bad Debt?

This is a question with which those in the financial world may disagree. Is there such a thing as good debt? Many will argue that no debt is good debt. But if you want to buy a house or possibly get an education, debt may be unavoidable. 

In reality, whether debt is good or bad is up to you. It is based on how you personally view debt. 

Questions about Debt

  • Most everyone will have debts (loan) at some point in their life.
  • When a debt/loan is repaid, you only pay the amount of the loan and no more.
  • You can only be in debt to a bank or someone who lends you credit.
  • A debt is considered good when the loan is used for something that will gain in value.

Add Debt to your Spend Plan

Spend Plan: Debt

Return to your spend plan and input your debt. Be sure to include all loans and debt, to include credit card, loans, family members, etc. Include as much information as you can about the debt.

Savings and Assets

Why should I save?

Types of Savings

There are all types of savings, but for this course we will concentrate on three. Savings accounts, retirement and emergency funds.  

Savings Accounts

This refers to the typical savings account with which most are familiar.  This can be used to save for something specific such as a new car, vacation, home. 

Retirement Accounts

Funds in a retirement account are intended to provide an income when an individual is not longer working. This would be the 401(k), mutual funds, pension plans, social savings accounts, etc. These types of accounts are generally not accessible, (without penalty) until reaching a required age. 

Emergency Funds

This is a fund for those unexpected hiccups in life. An emergency fund will provide the means to pay for these unexpected expenses without having to use a credit card. For more information on emergency funds, watch the video.

Retirement, Savings and Emergency Fund

With all the options available, saving has become easier.  One example would be the ability to transfer funds directly into a savings when you are paid, effectively paying yourself first.  

For retirement, many employers offers a retirement plan, some with matching investments made by the company. If this is a possiblity, it is recommended you take advantage of the plan to grow your retirement account even faster. 

No matter which way you save, the important thing is to build savings and an emergency fund and to save for retirement. Start now, even if it is only a small amount. A small amount will quickly build over time. Be prepared, life is full of unexpected hiccups!

What is an asset?

What is an asset?

Most don't realize that an asset is any resource with economic value that an individual owns and expects that the current value will increase. It is a common misconception that an asset must be a high value item, but in reality it is any account or item which has value.

Why is this part of the spend plan?

One function of a spend plan is to provide a summary of your entire financial situation. One aspect of this is to determine your net worth. 

This is done by adding up all your assets (savings and items of value) and subtracting your liabilities (debts).

But what constitutes an asset?

It is anything that has or may increase in value:

  • Savings accounts
  • House
  • Vehicle
  • Artwork
  • Collections - such as baseball card or coin
  • Jewelery - watches, rings, earrings
  • 401K and retirement accounts

Valuing your Asset

Easiest way to determine the value of an asset is to do some online research. Use websites like and to determine the value of your home; Kelly Blue Book can provide an estimate of your car. If you have items when have been appraised for insurance purposes, the amount provided can be used.  

A common mistake made when determining the value of assets is to overvalue.  Be aware of this possibility and try to find realistic value for your assets.

Add Saving and Assets to your Spend Plan

Spend Plan: Savings and Assets

Return to your spend plan and add your savings amounts to your spend plan. Take a few minutes to determine your assets and their value. Add the value of your assets to the spend plan.

What is the recommended amount for an emergency fund

  • 3-6 months worth of living expenses
  • 1-2 months of paychecks
  • There is no need for an emergency savings
  • 6-9 months of living expenses

How much of your paycheck should be going into an emergency fund?

  • 5%
  • 10%
  • 1%
  • 2%

Which types of accounts should an emergency fund be in?

  • Savings Account
  • Money Market Account
  • Retirement Account
  • CD

How can you determine the value of assets? (select all that apply)

  • Online resources such as Zillow or Kelly Blue Book
  • Insurance documents
  • Asking my neighbor what they would pay
  • Guessing

Action Plan

What do to next?

Now that your budget is done, the final step is to determine your financial goals and create an action plan. Let's begin with creating SMART financial goals.

SMART Financial Goals

Financial Goals

These are goals that you want to achieve in your financial life. This can be as simple as paying off credit cards, saving for a vacation or creating the emergency fund. 

Financial goals should be SMART and have a time frame for completion. 

SMART Financial Goals

* Save $2,400 in 12 months by creating an allotment of $200 per month from my paycheck into savings.

* Decrease credit card debt by increasing amount paid to highest interest card by $100 every month until paid off in full.

Goals to Spending Plan

Determine 3 financial goals and add these goals to your spending plan. 

Having a goal to reach will encourage you to adhere to your spending plan; especially when those goals are achieved.

Action Plan

Action Plan

The action plan is 4 steps you can take to ensure you achieve your financial goals.  You should have already completed the first step.

1. Analyze current financial situation

During this course, you should have been completing your spend plan. Take a few minutes to look over the summary in the spend plan and determine if you feel your financial situation could be improved or if you are comfortable in your current situation.

2. Examine your financial goals

When you wrote you goals, it may have been with the goal in mind and not your current financial situation. Take a minute to read your goals and determine if they are still relevant or if they should be rewritten. 

For example, you may want to save for a new car, but it would be better to pay down credit card debt before applying for a car loan.

3. Determine ways to work toward your goals

Regardless of what you goals are, there are three main ways to acheive them more quickly:

- Increase income

- Decrease expenses

- Decrease debt

Having extra funds allows you to pay off the debt, increase your spending or add to your retirement. Use the next section to determine ways you can find or create extra funds.

Increase Income

  • Seek additional employment
  • Review tax filing status
  • Sell items no longer in use

Decrease Expenses

  • Down grade/eliminate cable
  • Eliminate subscriptions or services no longer used
  • Meal plan/eat at home/pack lunches
  • Review current cell phone plan
  • Shop for better insurance plan price
  • Use coupons/Groupon
  • Shop at thrift/consignment stores
  • Swap services with friends

Decrease Debt

  • Stop using credit cards
  • Pay down debt using a power pay plan
  • Pay more than the minimum
  • Additional funds used to pay debt
  • Negotiate with credit card companies for lower rate
  • Consider debt consolidation loan

4. Create your Action Plan

Open your spend plan and determine which of the options above will benefit and fit your situation. Write these options in your Action Plan.

Well Done!

Now you have:

  • Created a spend plan, which includes: income, debt, expenses, savings and assets
  • Determined your financial goals in relation to your financial situation 
  • Prepared an action plan to succeed in achieving your financial goals.

You are well prepared to ensure personal financial success! Congratulations!