What is your money plan? (2024)

What is your money plan? (1)

I lost a battle with a clickbait-y headline last week.

Really, I never stood a chance. It sucked me in the second I saw it.

I don’t track my spending and I’m not sorry,” the headline screamed.

I couldn’t help but to click the link. What can I say? I was curious. At least that’s the easy explanation.

Deep down, I could relate.

See Also
50 30 20

I still don’t truly track my spending. I might look for patterns and tally what I paid. I certainly compare and contrast from month to month and year over year. But all that shows is what I did long after I’ve done it. Any leaks in my spending won’t be spotted until the end of the month, meaning I’m not enjoying one of the major benefits of tracking.

So don’t bet on me bragging about it in headlines here. I’m not proud of it. But my method works for me, although I could be more diligent.

Two things have allowed me to get away with not consistently tracking my spending. I’m not a big or frivolous spender. Major purchases were never my thing, and I’ve eliminated most spontaneous spending. The other thing is I’ve also organized my finances to where I’m funneling most of my money to planned places.

But I don’t have a system.

If you asked me for a percentage breakdown of how I disperse my after-tax income, I’d shoot you a blank stare. I’m still developing that level of detail.

But in the same week that a wealth-building workshop introduced me to one method, the author of the article with the attention-grabbing headline offered another spending plan.

Here’s how it works: Every month I budget a certain amount for various categories like gas, groceries, pets and personal spending. On payday, I automatically transfer amounts into those funds and update the totals in a budgeting spreadsheet. As long as money is available in those funds, I know what I can spend and what I can’t.

If I don’t spend the allotted amount in a month, it rolls over to the next month.This still allows you to make savings goals as well. All you have to do is make that one of the places you automatically transfer money to during the month.

Last year, Ro$$ Mac made me aware of the 50-30-20 rule. That calls for you to direct 50% of after-tax income to necessities, 30% to wants and 20% to savings and debt.

In his free webinar last week, Market Briefs CEO Jaspreet Singh alerted me to a variation: the popular 75-15-10 rule. Singh called it leading your money. This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.

Do you have a plan for your money? If not, do you need one?

I’m still adhering to a few fundamental money principles as my guides. I’m living below my means, carrying low debt and investing every penny I can.

Someday I’ll carve out time to calculate my percentages.

Thank you for reading Money Talks. If you enjoyed this column and feel it can add value to someone, please like, subscribe and share it.

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What is your money plan? (2024)

FAQs

What is your money plan? ›

A money plan has three simple segments: Track your expenses. Save for priorities. Repay debt.

What is meant by money plan? ›

A financial plan is a document that details a person's current financial circ*mstances and their short- and long-term monetary goals. It includes strategies to achieve those goals.

What is a plan for using your money? ›

A good way to take control of your spending is to set the maximum amounts you plan to spend each week or each month. Once you've set the maximum, stick with your plan. It's helpful to track your spending over a few weeks or months to get a handle on how you are using your dollars and cents.

What is the 50 20 30 rule? ›

One of the most common types of percentage-based budgets is the 50/30/20 rule. The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings.

How do you write a money plan? ›

How to write a financial plan
  1. Set financial goals. ...
  2. Assess your balance sheet. ...
  3. Understand your break-even point. ...
  4. Create a sales forecast. ...
  5. Forecast expenses and personnel costs. ...
  6. Create cash flow projections. ...
  7. Budget and plan for emergencies. ...
  8. Implement your financial plan.
Apr 16, 2024

What is a plan for your money? ›

A financial plan is a comprehensive picture of your current finances, your financial goals and any strategies you've set to achieve those goals. Good financial planning should include details about your cash flow, savings, debt, investments, insurance and any other elements of your financial life.

What is your spending plan? ›

A spending plan is a method for distributing your income among the mix of things you want and need. Creating a spending plan ahead of time will allow you to effectively manage your finances and determine where to best spend your money.

How do I plan myself financially? ›

Personalized financial planning explained step-by-step
  1. When it comes to life's biggest moments, you probably had a plan. ...
  2. Set financial goals. ...
  3. Follow a budget. ...
  4. Build an emergency fund. ...
  5. Manage debt. ...
  6. Protect with insurance. ...
  7. Plan for taxes. ...
  8. Plan for retirement.
May 10, 2024

At what age should you first start financial planning? ›

The first time you should start financial planning is once you start earning, regardless of age or income.

How do you take care of a money plan? ›

7 Money Management Tips to Improve Your Finances
  1. Track your spending to improve your finances. ...
  2. Create a realistic monthly budget. ...
  3. Build up your savings—even if it takes time. ...
  4. Pay your bills on time every month. ...
  5. Cut back on recurring charges. ...
  6. Save up cash to afford big purchases. ...
  7. Start an investment strategy.
Jun 27, 2023

How much should a 30 year old have saved? ›

If you're 30 and wondering how much you should have saved, experts say this is the age where you should have the equivalent of one year's worth of your salary in the bank. So if you're making $50,000, that's the amount of money you should have saved by 30.

How to budget $5000 a month? ›

Consider an individual who takes home $5,000 a month. Applying the 50/30/20 rule would give them a monthly budget of: 50% for mandatory expenses = $2,500. 20% to savings and debt repayment = $1,000.

How to budget $4000 a month? ›

making $4,000 a month using the 75 10 15 method. 75% goes towards your needs, so use $3,000 towards housing bills, transport, and groceries. 10% goes towards want. So $400 to spend on dining out, entertainment, and hobbies.

What is a money plan called? ›

Budget. A plan that outlines what money you expect to earn or receive (your income) and how you will save it or spend it (your expenses) for a given period of time; also called a spending plan.

How do I create a wealth plan? ›

Here's a look at some steps that you might take as part of a wealth-building strategy.
  1. Understand net worth. ...
  2. Set financial goals. ...
  3. Earn income. ...
  4. Save money automatically. ...
  5. Spend money consciously. ...
  6. Pay off high-interest debt. ...
  7. Build an emergency fund. ...
  8. Invest your savings.

How to budget for beginners? ›

Follow the steps below as you set up your own, personalized budget:
  1. Make a list of your values. Write down what matters to you and then put your values in order.
  2. Set your goals.
  3. Determine your income. ...
  4. Determine your expenses. ...
  5. Create your budget. ...
  6. Pay yourself first! ...
  7. Be careful with credit cards. ...
  8. Check back periodically.

What is the difference between a budget and a money plan? ›

short-term: With a financial plan, you typically track your progress on a quarterly or semi-annual basis. With a budget, you record your income and expenses on a weekly or monthly basis.

What is a plan for spending money called? ›

A budget is a plan you write down to decide how you will spend your money each month. A budget helps you make sure you will have enough money every month. Without a budget, you might run out of money before your next paycheck.

What is the best money budget plan? ›

In the 50/20/30 budget, 50% of your net income should go to your needs, 20% should go to savings, and 30% should go to your wants. If you've read the Essentials of Budgeting, you're already familiar with the idea of wants and needs.

What is a money market plan? ›

The money market involves the purchase and sale of large volumes of very short-term debt products, such as overnight reserves or commercial paper. An individual may invest in the money market by purchasing a money market mutual fund, buying a Treasury bill, or opening a money market account at a bank.

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