How to create a simple spending plan

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If there is one thing I could change while I was growing up, it would be learning about how to manage money and how to create a simple spending plan earlier in my life.

The skills of money management and budgeting weren’t taught to me by my parents or by the school. So I was left figuring it out as I went along in life.

As I spoke with my grandparents before they passed, they told me about budgeting. However, they never taught me HOW to budget.

They told me I needed a budget so I knew how much money I had to spend but they didn’t tell me why.

Today I am I going to tell you HOW and WHY to budget.

Sometimes you have to figure out why you need to budget and how to create a budget. This tutorial teaches you how and why to create a monthly spending plan and has a free printable!

Why Budget

By having a budget, you are able to see exactly where all your hard earned money goes. Some financial teachers like to say this is when you tell your money where to go.

When you don’t create a simple spending plan, this is when one would start to use credit cards. The whole point of a budget is to get you to stop using credit.

Having a budget allows you to forecast where you can be in a month, a year and in 5 years.

Sticking to a budget is a ton of work and self-discipline. But the relief of money anxiety outweighs the work.

How to budget

Now that you know why you have a budget, you need to know how to budget.

There are several ways to do your budget. The way I am about to teach you is what I learned 15 years ago at a church financial group. This was before Dave Ramsey got huge!

You start with your income. I have always started with my NET Income. That is the amount that gets deposited in my account every pay period. Grab a notebook so you can write this down!

Or print off the free printable I created for you! You can download it by clicking here. You will need to sign up for the newsletter since it is sent to you digitally.


I’m hoping that you already have money going into your 401k at work, if you don’t, then you need to save some money in a retirement fund for your future.

There are loads of benefits for this that I’m not going to get into right now.

What I will say is that you get tax savings so please look into how much to save in your 401k.

If you aren’t saving in your 401k and your company matches, you are leaving money on the table.

You need to at least save the amount that your company matches. So if that’s 6% company match, then you need to save 6%.

I will be referring to my printable going forward. If you didn’t get it, I highly recommend it.


At the top of your page start with your income. If you have a significant other who is part of your household then put down their income in line 2.

Create a Simple Spending Plan

Now put in all the numbers you spend each month. Those with percentages are percentages that the government recommends you spend each month on a certain category.

The government created those percentages to help the banks and mortgage companies when they started giving loans to buy a home.

The Government decided that the average family shouldn’t spend more than 28% of their income on a home.

The 28% is calculated off your GROSS income. So do not calculate that from your net income!

If you are spending more than 28% on your home, then you may want to consider moving or refinancing.

If you are renting and your rent is more than that amount, you may need to think about moving to something that is a little more affordable.

I know it’s hard to believe those numbers. It was really hard for us too. Especially when my husband lost his job. But those numbers help you stay out of debt.

Okay, now you have all your numbers subtract them all from your monthly income. That’s how much you have left over. Hopefully, you do have a number left over!


Related: This is what happened when my husband lost his job
Related: How to make budgeting easy with multiple accounts


Credit cards and debt other than cars or a house is considered unsecured debt. The goal is to pay them off as quickly as possible.

I created a debt tracker page that you can download with the spending plan I made. Just sign up for the mailing list and you will be able to download it.

If you have debt, the goal is to get out of debt.

Let’s say you have 2 credit cards and a school loan. I have always felt it is best to pay off the one with the least amount of debt first, then you pay the next one down.

So it goes like this. Credit card 1, has a $55 monthly payment, credit card 2 has $75 and school loan has $195.

If you have 400 left over after you pay all your bills, then you pay credit card 2 and the school loan the monthly payment, but credit card 1 you will add the extra $75 to the payment.

You will continue to pay the extra until credit card 1 is paid off. Then you add the monthly payment from credit card 1 and the extra left over to pay down credit card 2.

Once card 2 is paid off, then you apply everything to the monthly payment of the student loan and you pay that off.

So you would be paying to the student loan, the $55+$75+75 plus the monthly payment.

This is called a debt snowball. Be sure to download the spending plan and debt tracker for your convenience.

Related: How to keep meal planning simple and save more money

What if you don’t have money left over?

So you don’t have money left over at the end of the month? Trust me, I have been in those shoes and it is scary.

I remember wondering how we were going to make it through the month and I cried all the time worrying over it.

I recommend you read this post about when my husband lost his job. It was very humbling.

There are several ways you can get through this.

The first thing you need to do is figure out if you can cut some expenses.

Sometimes we can find money by calling companies or changing companies. Especially with insurance.

We were able to save $100/month when we called about our car insurance.

Hopefully, you can cut your cable bill and insurance bill down.

Now that you have called the companies, let’s talk about groceries and dining out.

Groceries is the number 1 place where I can cut money. How do I do that? I stop buying the stuff we don’t really need and just buy exactly what we do need.

Dining out and entertainment is the other place we cut back on when we are cutting expenses.

When my husband was unemployed we started entertaining in our home.

It was cozy and so much more fun and relaxing than dining out. We would invite people over and it would be so much fun.

If you find you are in a situation where the money doesn’t make it to the end of the month, you may need to find a side hustle to add a little extra income.

When we didn’t have enough I would sell our stuff on garage sale sites. It was easy to do and it often brought in $25-$50 a week and sometimes more!

What if I have money left over?

Congratulations! You are spending less than you are earning!

This is the goal everyone wants to achieve. If you have money left over, you should be putting that in savings or somewhere.

You may want to look into talk to a financial advisor about it.

If you have money left over but you still have debts, then you should be putting that toward your debts.

What helps keep us on a budget?

This is my secret sauce. We pray every month about our budget. By praying, we ask God for wisdom and guidance on what to do.

There are still have months where there is more month than money. And we still cut our groceries and entertainment bills first. But we couldn’t do this budget thing without God.


My other trick is I always have 1 day a week where I don’t spend any money. It’s usually a Tuesday or Wednesday.

Why do I do this? I figure that if I can go 1 day without spending money, then I could go more.


If you are just starting to budget, I want to encourage you to keep with it. It isn’t easy and it certainly doesn’t come naturally. Just keep going and doing it every month.

Within a few months, you will be able to say that you can now stick to a budget and you are in control of where your money is going.

Scrolling through? Be sure and download the monthly spending plan and debt tracker I made for you. You can get them by signing up for the mailing list below.

Creating a monthly spending plan and taking control of your money is the first step. Create a budget to help you manage your finances with a free printable.

Get your free printable monthly spending plan. Learn how and why you need to create a budget for your money.


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